PUBLICATIONS & REPORTS

Contents Introduction

This report examines the factors driving drug innovation in the Chinese pharmaceutical industry by analyzing market trends, firm financial capacity, and the regulatory environment spanning from 1990–2022. The descriptive analysis reveals that drugs targeting noncommunicable diseases such as oncology, immunology, and endocrinology have seen a surge in drug development, and that R&D investment decisions of Chinese pharmaceutical companies are influenced more by asset accumulation than by debt and profit margins, in contrast to other contexts. The report also highlights the role of government regulations in incentivizing and shaping pharmaceutical R&D, with regulatory instruments encouraging the development of treatments for rare diseases. However, price pressures linked to government regulations raise concerns about their potential impact on innovation. The findings underscore the challenges in assessing the impact of government regulations on innovative activities and the need for comprehensive data integration across corporate and disease dimensions to better understand the drivers of drug innovation in China’s pharmaceutical industry.