(SINGAPORE 20266.16) Amid intensifying global competition in drug innovation and growing uncertainty in US pharmaceutical policy, major global drugmakers—including Japan’s Astellas Pharma ( 安斯泰来制药) and Daiichi Sankyo (第一三共) —are accelerating their expansion into China.
The world’s second-largest pharmaceutical market has become important not only as a commercial base but also as a hub for drug R&D and manufacturing. However, companies establishing deeper presence in China to tap its growing strengths must weigh growth opportunities against geopolitical and regulatory risks, according to Japan’s Nikkei Chinese (日经中文网）.
A key development in recent years is that Chinese pharmaceutical firms are no longer confined to manufacturing or domestic sales. They are now becoming competitive in drug discovery—particularly in oncology—where China now leads globally in the number of cancer drug clinical trials, reported US data company IQVIA. This signals a transition from China as a downstream market to an upstream co-developer of global medicines.
As Chinese biopharma capabilities advance, they attract growing interest from major pharmaceutical companies in Japan, Europe, and the US seeking promising “drug candidates”—molecules that have passed preclinical research but have not yet entered human trials. IQVIA data highlights China’s rising role in this early-stage innovation ecosystem.
The attraction is verified by concrete corporate moves. Astellas Pharma is preparing to establish its first-ever R&D base in China as early as the second half of this year at Beijing’s International Medical Innovation Park ( 国际医药创新公园) . The facility will focus on identifying and discovering new drug candidates and is expected to deepen collaboration with local scientists and biotech firms.
Astellas already runs clinical trial operations in Beijing and Shanghai and has manufacturing capacity in Shenyang, but this new site marks a move upstream into early-stage discovery of drugs.
At the same time, Daiichi Sankyo is expanding its manufacturing footprint, planning to invest around 1.1 billion yuan (about S$210 million) to build a production facility in Shanghai by 2030. The plant will produce its antibody-drug conjugate (ADC) cancer therapies, including “Enhertu” (优赫得) and “Datroway” (德达博妥单抗), both of which are already approved in China for certain cancers.
ADCs are targeted cancer therapies that link an antibody to a cytotoxic drug via a chemical linker, enabling more precise delivery to cancer cells.
China will become the fourth country—after Japan, the US, and Germany—to host Daiichi Sankyo’s ADC production facilities, underscoring the country’s growing importance in global biopharmaceutical supply chains.
Taken together, these moves add up to a broader strategic shift: leading Japanese pharmaceutical companies are no longer entering China solely to sell drugs, but to develop them, run clinical trials, and manufacture at scale. China is increasingly embedded in the core of global pharmaceutical R&D and production networks.
This momentum is reinforced by China’s policy support. The Chinese government has prioritized innovative drug development as a strategic sector, providing funding, infrastructure, and talent support. In oncology in particular, China’s global influence has surged: IQVIA reports it ranked first worldwide in cancer drug clinical trial volume for the second consecutive year in 2024.
Other Japanese firms, including Takeda Pharmaceutical Company ( 武田药品工业) and Eisai ( 卫材), are also partnering with Chinese biotech companies to access promising pipelines more quickly, fuelling the industry shift toward China-linked innovation.
China’s large and expanding domestic market further strengthens its appeal. IQVIA data shows it surpassed Japan in 2013 to become the world’s second-largest pharmaceutical market after the US. In 2024, total retail pharmaceutical spending in China reached about US$166 billion (S$212 billion), or about 10% of the global total. Demand continues to rise, driven by population ageing and a growing prevalence of lifestyle-related diseases linked to dietary and social changes.
Industry executives note that conditions in China now resemble those of developed markets. Takeda CEO Christophe Weber said China is both a massive market and one whose innovation capabilities are rapidly converging with those of the US, while also offering strengths in clinical trial speed and cost efficiency.
Eisai is one early mover. It has secured a licensing partnership to launch a gout treatment in 2025 alongside Fujirebio (富士药品). With an estimated 23 million gout patients in China—and numbers expected to rise—the market potential is substantial.
Meanwhile, developments in the US are indirectly encouraging diversification toward China. US policy initiatives such as a “Most Favored Nation” (MFN) drug pricing framework—which would tie US drug prices to the lowest levels among comparable developed countries—along with proposed tariffs on imported pharmaceuticals of up to 100%, have heightened uncertainty for global drugmakers in the US market.
For example, the US might cap the price of a cancer drug at around US$4,500, aligning it with the lowest price among comparable countries.
Because high US drug prices have historically helped fund pharma companies’ R&D and clinical development, pricing constraints could compress margins and force them to become more selective in pipeline development and launch strategies.
These pressures are not limited to Japanese firms. UK’s AstraZeneca (阿斯利康) has announced plans to invest up to US$15 billion in China by 2030, while US’ Pfizer (辉瑞）has also expanded partnerships with Chinese biotech companies, particularly in oncology.
Together, all these diversifications from US point toward a more multipolar pharmaceutical landscape, where R&D, clinical trials, and manufacturing are distributed across multiple global hubs rather than concentrated in the US alone.
However, risks remain material. Political tensions between Japan and China continue to weigh on sentiment, including past cases such as the detention and conviction of an Astellas employee on espionage-related charges, Nikkei pointed out.
Broader concerns about China’s biotechnology applications in military sector also add to the regulatory and security complexity facing multinational firms.
Even so, China’s ageing population, rising healthcare demand, and expanding innovation capacity continue to make it structurally indispensable to the global pharmaceutical industry. The central challenge for drugmakers is no longer whether to engage with China, but how to balance its significant growth and innovation opportunities against rising geopolitical and policy risks.
