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China on the Move: New Level of Opening up in Health Care Sector
Wednesday, November 13, 2024

China’s innovative drug market is projected to grow from RMB 709.7 (USD 99) billion in 2023 to RMB 753.4 (USD 105) billion in 2024, drawing mixed reactions from international pharmaceutical companies. On one hand, a number of multinational companies exercised lingering caution over additional investments in China. For example, in August, UCB divested part of its mature neurology and allergy products as well as a manufacturing site to private equity, CBC and Mubadala. Kyowa Kirin sold its China business to Hong Kong’s WinHealth Pharma Group Co. Limited. On the other hand, Bayer and Eli Lilly both made similar moves to put new money in startups through Bayer Co. Lab, and early drug research in Beijing and manufacturing in Suzhou, respectively.

Chinese policymakers are keen to attract foreign investment by easing regulations to foster innovation, marking a shift from previous regulatory restrictions on cross-border research and development. This year, “innovative drugs” were highlighted in the government’s work report for the first time. In 2023, over 220 innovative drug licensing and partnership deals were made, totaling RMB 266 (USD 37) billion.

Recently, the Chinese government has taken steps to boost the health care sector and encourage international cooperation. These measures are reshaping the industry and creating new opportunities for market players. Key regulatory developments include:

  • Removing barriers for foreign investment in cell and gene therapy (CGT) and medical institutions in select areas.
     
  • Releasing its first draft of the Medical Device Administration Law, aiming to encourage innovation in the medical industry.
     
  • Developing a negative list for data export, further relaxing the requirements for cross-border data transfer in the pharmaceutical industry.
     
  • Releasing draft guidelines to prevent commercial bribery in the pharmaceutical industry.
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