China’s Biotech rise is changing where New Medicines come from

China’s growing role in pharmaceutical innovation is reshaping the global research landscape, with implications for businesses deciding where to find expertise, develop products and build international relationships.
For the cannabis industry, the shift raises a question: how should an emerging sector position itself within a changing life sciences economy?

An FT Live report, China’s biotech boom: New dynamics in global drug development, describes a country moving beyond its established role in generic medicines and manufacturing to become an increasingly significant source of original drug development.

A changing research map

According to McKinsey figures cited in the report, China’s share of innovative drug candidates in clinical trials rose from 8 per cent in 2018 to 30 per cent in 2025. Over the same period, the US share declined from 47 per cent to 36 per cent.

That brings China much closer to the US in its share of the research pipeline. However, a falling percentage does not necessarily mean fewer American candidates in absolute terms: shares can change as the overall pipeline expands.

These figures also measure medicines under investigation, rather than approved treatments. A larger pipeline does not guarantee successful products, but it indicates where scientific activity and potential future therapies are increasingly concentrated.

The commercial connection is strengthening too. The report states that China’s share of out-licensing agreements to the US and Europe increased from 2 per cent in 2018 to 20 per cent in 2025. Overseas companies are increasingly securing rights to develop and commercialise Chinese research.

Scientific capability has been built over time

FT Live attributes this development to sustained state backing, scientific education, regulatory changes and investment in specialist infrastructure. It describes an expanding workforce spanning research, equipment and manufacturing, supported by businesses that undertake development and production for other companies.

The significance lies in how these capabilities reinforce one another. Research needs suitable facilities, experienced staff and reliable technical services. Building those resources together can help companies turn promising discoveries into programmes that attract international attention.

McKinsey’s April 2026 analysis supports this broader picture, identifying Greater China as the dominant contributor to Asia’s pharmaceutical innovation pipeline. It also highlights the region’s growing contribution to advanced treatment technologies. (mckinsey.com⁠)

Innovation and commercial reach remain different strengths

The report does not suggest that Chinese biotechnology companies have already displaced established pharmaceutical groups across every stage of development. It identifies continuing western advantages in capital markets, later-stage trials, regulatory expertise and commercialisation.

Taking a medicine from discovery to international use requires considerably more than a promising laboratory result. Companies must finance development, demonstrate quality and clinical performance, navigate different markets and establish dependable supply.

This helps explain why international partnerships remain important. Scientific innovation and the resources needed to bring it to patients may sit in different organisations.

Where cannabis businesses fit

The report does not assess China’s position in cannabinoid medicines. Its relevance to the cannabis industry concerns the wider environment in which medicinal research and commercial partnerships develop.

For businesses pursuing cannabinoid medicine development, it provides a reason to assess potential partners through their scientific competence, documentation, technical capabilities and suitability for the intended market.

It also invites a closer examination of what cannabis businesses contribute. Cultivation is one capability; reproducible formulations, analytical methods, delivery technologies and credible research programmes are others.

For CTA members, understanding this changing research map can support better-informed international relationships. As pharmaceutical innovation becomes more geographically diverse, businesses that can demonstrate a clear, evidence-supported contribution will be better placed to explain their value to prospective partners.