China Is No Longer a Biotech Imitator; New Report Finds It Is Rapidly Catching the West in Innovation

WASHINGTON—China’s biotech industry is quickly transitioning from imitating leading firms in the West to becoming an innovator in its own right by producing more highly cited biotech research than any other country and conducting increasing numbers of clinical trials in a wide range of therapeutic areas and drug modalities, according to a new report from the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy. Meanwhile, China’s share of value added in pharmaceuticals more than quadrupled in just two decades to nearly one-quarter of global output in 2019.

“The Chinese government’s strategic focus on biotech is reshaping the global innovation ecosystem,” said Sandra Barbosu, a senior policy manager at ITIF. “China doubled its clinical trials in just four years—and its firms are now securing new drug approvals not just from Chinese regulators but also from the U.S. FDA. China still lags behind the West in its ability to commercialize research, but several indicators suggest that it is successfully narrowing the innovation gap in biotech.”

China largely mimicked Western biotech advances until 2011. Then, its 12th Five-Year Plan pivoted to a national strategy focused on innovation, spurring new technologies, biotech parks, and stronger industrialization. Government support paved the way, building on the country’s strong manufacturing base by providing subsidies, financial incentives, and research grants. For example, the National High-Tech R&D Program and National Key R&D Program allocated funds for breakthrough projects, giving Chinese biotech firms an edge in long-term ventures.

Among the notable results of China national strategy for the biotech sector:

• Clinical trial activity more than doubled from 2,979 trials in 2017 to 6,497 trials in 2021.
• Oncology trials surged by 146 percent, from 1,040 in 2017 to 2,564 in 2021, the most in the world.
• Value-added pharmaceuticals output increased from 5.6 percent of global production in 2002 to 24.2 percent in 2019.
• The U.S. FDA approved three new Chinese drugs in 2023.

The number of Chinese publications ranking in the top 10 percent of the world’s most highly cited research increased 382 percent, from 139 in 2012 to 671 in 2022.

While China has worked to become innovative, ITIF’s report finds that the United States has remained the global leader in biotech innovation, leveraging its sophisticated ecosystem of national funding sources, VC start-up funding, pharma R&D investment, robust IP, and strong commercialization ability.

“The U.S. biotech ecosystem—from government and private support for new research to robust commercialization abilities—has long been unmatched,” said Barbosu. “To maintain its edge, the United States will need to continue increasing R&D funding through NIH and ARPA-H, avoid government price setting, improve IP protections to incentivize long-term research, and support data-driven drug development with privacy-enhancing technologies. If U.S. policymakers neglect the factors that have made America the global leader in biotech innovation, then that leadership and competitiveness will quickly fade.”

Contact: Austin Slater, [email protected]