China’s biopharma sector is on track to become the world’s third-largest market for innovative drugs by 2028, according to McKinsey & Company’s upcoming Asia Biopharma Report. The projection highlights the country’s transition from being a generics-heavy pharmaceutical market to an emerging global powerhouse in drug innovation.
In 2023, China’s pharmaceutical market reached $125 billion, with the innovative drug segment expanding at an average annual growth rate of 16%. While multinational pharmaceutical companies controlled around 75% of the innovative drug market last year, McKinsey forecasts their share will fall to 60% by 2028 as domestic firms gain ground. This shift is set to propel China ahead of Germany, currently ranked third worldwide, in terms of innovative drug market size.
Driving Forces Behind Growth
China’s rise in drug innovation is supported by more than a dozen biopharma innovation hubs, significant government R&D backing, and streamlined regulatory reforms. In particular, faster timelines for getting new drugs onto insurance lists have accelerated patient access and expanded market opportunities.
Another key growth driver is China’s role in global technology exports for drug candidate substances. Exports grew from $10 billion in 2019 to $57.5 billion in 2024, with China’s global share expected to climb from just 4% in 2019–2020 to nearly 40% by 2025. The country has also become a critical player in contract manufacturing, with three of the world’s top 10 pharmaceutical companies outsourcing drug production to Chinese firms.
Breakthrough Drugs and Blockbuster Potential
So far, 15 innovative drugs from Chinese companies have surpassed $100 million in annual sales. Notably, BeiGene’s blood cancer treatment Brukinsa achieved $1.3 billion in global sales in 2023, reaching $2 billion in 2024. It became the first China-developed blockbuster drug, defined as generating over $1 billion annually, and the first Chinese anticancer drug to gain FDA approval.
Legend Biotech has also made international strides, recording nearly $1 billion in 2024 sales for its multiple myeloma therapy Carvykti, which was developed in collaboration with Janssen. These successes suggest that China is entering a new phase in which homegrown companies will increasingly deliver globally competitive blockbuster drugs.
Accelerating Innovation Cycles
One of China’s biggest advantages lies in its speed. The McKinsey report notes that Chinese biotech firms can advance from target discovery to preclinical candidate selection in 2–3 years, twice as fast as the global average of 4–6 years. This acceleration is powered by AI-driven drug discovery platforms, massive capital investment, and the mobilization of large R&D teams.
China’s vast population also plays a role, providing a broad clinical trial base that speeds up testing and approval processes. The country’s strong foundation in biomedical research further supports this momentum. An increasing number of Chinese-authored papers are being published in top journals such as Cell, Nature, and Science, signaling global recognition of China’s growing capabilities in pharmaceutical innovation.
Looking Ahead
With strong policy support, expanding R&D capabilities, and a rapidly growing portfolio of successful drugs, China is well-positioned to reshape the global pharmaceutical landscape. As it overtakes Germany by 2028, China will not only cement itself as a leading biopharma market but also as a central hub for breakthrough drug development.