Chinese Pharmaceutical Industry: Innovation Breakthroughs, Policy Tailwinds, and Long-Term Investment Logic

1. Industry Transition: From Generics to High-Value Innovation

Chinese pharma is shifting from low-end generics to innovative drugs, driven by policy, capital, and talent [6]. Key players have made significant breakthroughs:

• Hengrui Pharma: HER2 ADC SHR-A1811 approved in May 2025, with 9 breakthrough therapy indications and 10+ ADC molecules in clinical development [1,3]. Q1 2025 revenue grew 20.14% YoY to 7.21B yuan, net profit up 36.90% [3].
• BeiGene: Zanidatamab (bispecific antibody) received FDA accelerated approval for HER2+ biliary tract cancer in May 2025 [2]. It has 4 ADC candidates in clinical stages and tislelizumab (PD-1) achieved 4.47B yuan global sales in 2024.

2. Policy Tailwinds Supporting Innovation

The 2024 State Council full-chain innovation policy and 2025 commercial health insurance catalog for innovative drugs create a favorable environment [5].集采 impact is easing, with 2026 consumables rebound expected [6]. The 2025 national医保目录 added 91 drugs (avg 63% price cut), reducing patient burden by over 50B yuan [4].

##3. Global Expansion & Market Dynamics
Chinese innovative drugs are accelerating出海: H1 2025 License-out transactions reached $61.8B, up77% YoY. However, R&D risks remain (double ten rule:10 years, $1B,10% success rate).

##4. Investment Logic
Long-term investment bets on China’s innovation rise and life health needs. Despite R&D barriers, the social and economic value of innovative drugs is significant.