On September 14, the launch ceremony of the 2026 “National Drug Safety Publicity Week” was held in Beijing. Huang Guo, Secretary of the Party Leadership Group and Director of the National Medical Products Administration, and Jin Wei, Member of the Beijing Municipal Party Committee and Vice Mayor, attended and delivered speeches.

At the launch ceremony, the National Medical Products Administration released data: since the beginning of this year, the total overseas licensing transaction volume of China’s innovative drugs has exceeded $120 billion, a year-on-year increase of 36%, with down payments exceeding $10 billion.

This figure sets a new historical record and marks a substantial shift in the position of Chinese innovative drugs in the global value chain.

1. From “selling seedlings” to becoming “global R&D partners”

In the past, Chinese pharmaceutical companies’ external licensing was often summarized as “selling seedlings”—licensing overseas rights at low prices in the early stages of R&D, gaining cash flow while giving up most of future profits.
But the deal structure for 2026 is changing this pattern:

in May this year, Innovent Biologics and Pfizer reached a $10.5 billion cooperation agreement covering 12 early-stage oncology projects, with an upfront payment of $650 million. Both parties divided the project into three categories:

• Four key projects are jointly developed globally and profits are shared, with Innovent retaining rights in Greater China;
• Four were granted exclusive licenses outside Greater China, with Pfizer bearing most of the development costs;
• Four were granted Pfizer exclusive global licenses, with Pfizer bearing the global development costs.

Innovent is responsible for advancing to Phase I clinical trials, with Pfizer leading subsequent development.
Almost simultaneously, Hengrui Medicine and Bristol Myers Squibb reached a larger deal—a potential total of about $15.2 billion, with an initial payment of $600 million, plus a $175 million annual payment for the first and a conditional $175 million annual payment for 2028. The agreement covers 13 early-stage projects, including 4 Hengrui oncology and hematology projects, 4 immunology projects at BMS, and 5 innovative projects jointly developed by both parties.
Hengrui retains the option to jointly develop specific projects and has the opportunity to participate in global commercialization. Hengrui Medicine has obtained exclusive rights to the above BMS original research projects in Mainland China, Hong Kong, and Macau Special Administrative Regions, while BMS reserves rights to other regions worldwide except those regions. Hengrui Medicine will be fully responsible for the early clinical development of the above projects and accelerate clinical proof-of-concept testing.
The common feature of these two deals is that Chinese pharmaceutical companies no longer sell overseas rights all at once, but instead retain channels for subsequent development and commercialization through layered design, shifting from passive “sellers” to proactive “global R&D partners.”

2. Frequent large-scale transactions, new

down payment records Along with changes in transaction structure, both the amount per transaction and the proportion of down payments are rising:

• At the end of August, Dizhe Pharma and AstraZeneca officially signed a global licensing agreement for Suvolitinib (Suvolitinib). Dizhe Pharma received a one-time upfront payment of $600 million, along with up to $400 million in clinical development milestones and up to $500 million in sales milestones, bringing the potential total deal amount to $1.5 billion, along with a tiered royalty fee ranging from the highest to the lowest double digits in global sales. This deal set a new industry record for the upfront payment for domestic small molecule targeted drugs for external authorization.
• Henlius has reached a framework agreement with global generic giant Sandoz, granting the latter exclusive rights to register and commercialize up to 10 biosimilars worldwide outside China, with upfront payments, milestone payments, and option fees totaling up to $322 million, and will pay 40% of the net sales or net profit in the cooperation region for the first batch of products. This “system-based going global” model marks the beginning of Chinese biosimilar companies participating in global division of labor in a systematic manner.

The new downfront payment record points to a judgment—the bargaining power of Chinese innovative drug assets in the global BD market is substantially improving, and leading pharmaceutical companies now have the leverage to negotiate equally with international giants.

3. China’s pipeline has become an important global
source of innovation. What supports the growth of data going overseas is a substantial improvement in China’s innovative drug R&D capabilities.
According to industry reports, the proportion of Chinese innovators in the global pipeline under development has jumped from 4% in 2014 to 33% by 2026, with Asia contributing 48% of the global innovation pipeline and 90% of the growth in innovators.
According to data from the National Medical Products Administration,

• By 2025, more than 2,900 new drug clinical trials will be registered nationwide, an 18% year-on-year increase;
• The number of clinical trials for cell and gene therapy drugs is growing by about 30% annually,
• In terms of clinical trial initiation, China accounted for only 2% of the global total in 2009 to a record high of 33% in 2023.

This year’s achievements are equally impressive:

• Fifty-nine innovative drugs and 51 innovative medical devices have been approved for market launch, among which 13 are first-in-class drugs with new mechanisms and new targets;
• Of the 38 new drugs approved for market launch in the first half of 2026, 11 are new targets and new mechanisms, all domestically produced, covering fields such as oncology, infections, endocrine, and hematological diseases.

These figures together demonstrate that the role of Chinese innovative drugs in the global R&D system has fundamentally changed: they are no longer just suppliers of pipelines, but producers of source innovation.

4. Policies continue to send positive signals

At the three stages of review and approval, medical insurance payment, and basic drug access, policies are responding and building a support system covering the entire chain of “R&D—approval—payment—admission.”
On the review and approval side, in July 2026, the National Medical Products Administration issued a document to include eligible cell and gene therapy drugs in the 30-day innovative drug clinical trial review and approval channel, implementing “early intervention, one enterprise-specific policy, full-process guidance, and coordinated research and approval” for drugs with new targets and mechanisms. During the 15th Five-Year Plan period, the system will also promote the implementation of drug trial data protection systems and establish a market exclusivity system for children’s drugs and rare disease medications.
On the medical insurance payment side, the 2026 catalog adjustment introduces a “pre-application” mechanism for the first time—drugs that have completed technical review but have not yet been approved can enter the medical insurance negotiation process earlier, significantly reducing the time gap between “approval, negotiations, and admission.” The plan also establishes an 8-year price protection period for innovative drugs: when exclusive drugs with an 8-year agreement expire and are transferred to the regular catalog, the payment standard is the higher of the two calculation methods, extending the cash flow curve over the innovative drug’s life cycle.
The essential drug list is followed up simultaneously. The new version of the catalog, released in July 2026, marks the first systematic adjustment in eight years, expanding the list of drugs from 685 to 794. For the first time, innovative drugs are included in batches, bringing the total to 16 innovative drugs, including 4 domestic Class I new drugs. Gong Xiangguang, Director of the Drug Administration Department of the National Health Commission, stated that this adjustment is intended to explore pathways for more innovative drugs to be included in the essential drug list in the future.

5. Challenges
Behind Going Global The rapid growth in authorized amounts and ongoing policy benefits do not mean the path to going global is completely unobstructed.

From the transaction structure perspective, although the upfront payment is considerable, most of the returns still depend on whether subsequent milestones can be realized. According to statistics from the US post-merger services firm SRS Acquiom, over 60% of BD deals in the biopharmaceutical sector over the past nine years failed to reach milestones, with the turnout rate decreasing as the stage progresses. Licensing income is a one-time, non-recurring income. After divesting large BD orders, some companies’ operating profits remain under pressure.
From the perspective of industrial capability, the shortcomings in basic research remain prominent. Chen Shaoxiong, Executive President of the Shanghai Biopharmaceutical Industry Association, pointed out that China’s innovative drugs going global face two major challenges: “limited source innovation through brand-new mechanisms, prominent shortcomings in basic research,” and “need to improve industry adaptability.” Fang Qun, Chief Scientist of Yisi Biotech, mentioned that the lack of talent in China who understands global clinical trial design will affect the degree of recognition of innovative drug approvals by overseas regulatory agencies.
From the transaction stage, China’s innovative drug assets are licensed to the early stages. Data from the first half of 2026 shows that early-stage assets (preclinical and clinical application) account for 49% of China’s BD transactions, while definite cash down payments account for only 6%, compared to 10% in the US during the same period. MNC recognizes the long-term commercialization potential of domestic pipelines but remains cautious about the clinical transformation capability, differentiated advantages, and global commercialization risks of early-stage assets.
From an external perspective, regulatory barriers and geopolitical factors are also increasing uncertainty about going global. The approval standards of the US FDA and European EMA are strict, and many countries are promoting localization policies for industrial security, requiring supply chain autonomy. Data compliance has become an external hurdle that must be overcome. When transaction structures upgrade from simple license-out to multi-billion-dollar co-development and commercialization models, the FDA and EMA’s requirements for data traceability are becoming increasingly stringent. Chinese pharmaceutical companies now face no longer just competition over targets and molecules, but also a battle over data sovereignty, compliance trust, and digital capabilities.

6. Conclusion
The $120 billion total of external licensing directly reflects the changing role of Chinese innovative drugs in the global BD market. The continuously refreshing transaction amounts and the steadily rising upfront payment scale not only directly demonstrate the global competitiveness of domestic pipelines but also mark that China’s biopharmaceutical industry has officially entered the core supply side of global drug innovation.

The core future competition will no longer be limited to pipeline licensing transactions alone, but will be a comprehensive contest of source innovation capabilities, global clinical development systems, cross-regional compliance capabilities, and commercial operational efficiency. For Chinese pharmaceutical companies, external licensing is only the starting point for value realization; the real test lies in whether they can complete the leap from “pipeline output” to “value co-creation.” We look forward to more domestic innovative assets, leveraging a more mature BD cooperation model, to continuously unleash China’s innovative power in the global biopharmaceutical value chain.

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