Norwegian Biotech CEO Erik Wiklund has traveled to China 15 times over the past decade – increasing in recent years. As he contemplates where his company, Circio, might seek to move into the clinic with its circular RNA platform, he has his eyes set firmly on the country.

“For a company like us, our first-in-human study will probably be in China – not in Europe or the US,” he says. “It’s faster, cheaper, and easier.” 

A report by Information Technology and Innovation Foundation (ITIF) found that a phase 1 trial in China is on average 43 percent cheaper and 53 percent shorter in duration than in the US (1). And Wiklund estimates that he could generate clinical data for about one third of the costs – or about 15 percent once the costs of working with a Chinese partner are taken into consideration – compared to the US or Europe, and 18 months faster, cutting timelines in half. 

An increasingly popular model for Western biotech companies is to first generate clinical proof of concept in China to attract investors to front the significant capital required for later stage trials in the West. “You're then much more likely to succeed once you start that big GMP package in the West,” says Wiklund. 

Chinese companies too are accelerating development timelines and lowering costs. One study found that Chinese-origin early-stage drug development programs increased 641 percent from 829 in 2015 to 6,145 in 2024 (2). 

China’s ambitions, however, extend beyond offering a faster, cheaper route into clinical trials. The country’s new pharmaceutical and biopharmaceutical Five-Year Plan, released on September 18, 2026, sets a target for China to develop 25 percent of the world’s first-in-class drugs and for at least five Chinese medicines to achieve annual global sales exceeding $1 billion (3).

“It's essentially summarizing the one point,” says Ali Pashazadeh, Founder and CEO of Treehill Partners, “which is: we have a plan, we're now at the table, and this is what we're going to do.” 

No mere wishlist 

China’s five-year plans are a legacy of Soviet-style central planning, and, in the early post-revolution years, set numerical targets for the production of grain and other commodities. Today’s five-year plans instead set strategic direction and policy priorities for the country. But, according to Lance Han – who grew up in China and founded California-based biotech Cyagen Biosciences in 2006 – companies do pay attention. “If you don't go with a trend, you might miss out,” he says. 

Specifically, five-year plans can and do result in grant funding for companies. The national level five-year plan was passed by China’s legislative body, the People’s Congress, in March this year; those guidelines then filter down to the provincial and municipal levels. “Different provinces and cities have their own more detailed plans under the national guidelines,” says Han. These can include grants, which researchers can apply for. “In the past, we did rely on these sources of funding," he adds.  

Companies in China can also become certified as a high-tech company, which reduces the company’s corporate tax rate from 25 to 15 percent. “It’s a very strict process, but that's a huge deal here,” says Han.

Have China’s previous five-year plans come to fruition? Han argues that they have. “If you look back in history, every time we seem to accomplish the previous five-year plan quite nicely,” he explains. 

Han points to his own company’s experience evaluating and eventually purchasing Chinese-origin scientific instruments. While building an antibody screening platform, Cyagen compared sequencing instruments from Illumina, BGI, and GeneMind. According to Han, the GeneMind instrument delivered the best data quality in the company’s evaluation, prompting a purchase costing several million renminbi. Cyagen also purchased a microfluidic system from ThunderBio for screening individual B cells in antibody discovery. Han says the Chinese supplier’s system outperformed the established competitor’s instrument in the company’s evaluation – another purchase that challenged his assumption that sophisticated equipment would have to come from foreign suppliers.

“It surprised me,” admits Han, attributing that progress to sustained policy support in previous five-year plans. “They mention precision instruments in scientific labs," he says. "It’s the result of 10 or even 15 years of very consistent policy that support these kinds of Chinese companies.”

Economic research supports the link between planning priorities and practical support for innovation. A study analyzing 257 Chinese cities between 2004 and 2017 found that setting innovation targets in local five-year plans was associated with a 21 percent increase in invention patent applications. The researchers identified increased public spending on science and technology and government procurement of innovative products as the main mechanisms, and also found improvements in patent quality and research collaboration (4).

A tale of two empires 

The publication of China’s Five-Year Plan for the pharmaceutical and biopharmaceutical industry coincides with uncertainty for the US industry.

Democratic control of one or both chambers of Congress could obstruct President Trump’s legislative agenda and increase scrutiny of his administration’s health policies. It could also create an opportunity to push for increased National Institutes of Health (NIH) funding, although any increase would require agreement on spending legislation. Congress would have less direct influence over policies pursued through executive action, including the administration’s most-favored-nation drug-pricing initiative, and Robert Kennedy Jr’s leadership of the US Department of Health and Human Services. A change in congressional control would therefore offer no immediate resolution to concerns raised by industry leaders that have been building for the past two years about regulatory predictability and research funding. In fact, some industry leaders believe that the damage has already been done. 

Mike McGrath, CEO of Neuvivo, has spent more than 40 years in academic discovery, clinical drug development, and biotech entrepreneurship. Asked how the current disruption compares with previous periods in his career, he is unequivocal: “This is the most concerning time that’s ever happened.”

An October 2026 analysis by the Association of American Medical Colleges found that 5,776 NIH grants had been frozen or terminated since January 2025, including 1,175 that had not been restored. The agency awarded approximately 56,600 grants in fiscal year 2026, compared with 64,000 in 2024. Although NIH fully committed its extramural grant budget in both 2025 and 2026, unpredictable award patterns, grant disruptions, and changes to how multiyear projects were funded has complicated research and institutional planning, according to the report (5). 

“If an academic can’t afford to pay a graduate student or postdoc, where will those kids go? Not into science,” McGrath adds. “In one fell swoop the United States has thrown a wrench in its drug discovery engine.” 

McGrath points out that large universities in the US are feeders for companies looking for innovative approaches. Academic researchers have the ability to fail – several times over, in many cases – in a way that companies can’t. “That's been significantly dampened because of this administration’s grant scenario,” he says.  

Miguel Forte, CEO of Kiji Therapeutics, who served as president of the International Society for Cell & Gene Therapy from 2024 to 2026, also believes that this could have a significant – though delayed – impact.

“Innovation and early steps of translation are very dependent on public funding because the level of risk is very high and investors want a stronger conviction about an opportunity before they make the investment,” he says. “We're going to see a slow down; it might be a few years down the road, but we're going to see a significant diminishing output of innovation.”

Financial pressures could reinforce that trend. In an upcoming analysis for The Medicine Maker, Joe Renny, Head of Corporate Development, CatSci Group Holdings Limited, argues that higher real interest rates are particularly difficult for biotech companies whose potential revenues remain years away. “Higher real yields also push capital towards drugs that have already come through years of development risk, and China has spent a decade building a large stock of exactly those drugs,” he writes.

That makes China’s speed increasingly valuable, even as licensing its medicines becomes more expensive. “A drug with patient data today can be three or four years ahead of a Western drug starting development,” Renny writes. For investors and pharmaceutical buyers, that head start can justify paying more. “Higher rates strengthen China’s hand even as its prices rise.”

Pashazadeh expects the uncertainty surrounding the midterms to have consequences beyond the election itself, regardless of which party wins. “The US will be another couple of steps behind the Chinese by the time we’re through the midterms,” he says.

A significant source of strength for the US pharmaceutical industry has been confidence in the FDA and the predictability of its requirements. “You go there first, okay, it costs more, maybe it’s more complicated, but everyone else would follow,” says Wiklund.

Wiklund’s concern is that companies can no longer take that predictability for granted, particularly when investing in pivotal trials after discussions with the agency. “You invest into a pivotal trial, you think everything is fixed and agreed and you meet the endpoint as you should, then you’re good,” he says. But then he points to uniQure’s Huntington’s disease gene therapy AMT-130. According to the company, FDA discussions in late 2024 and early 2025 supported an accelerated-approval application based on its Phase 1/2 studies and an external control. By early 2026, however, the agency had deemed that evidence insufficient and recommended a sham-surgery-controlled trial. Further discussions in June reopened a potential path based on the existing data, and uniQure submitted its application in September 2026.

Replimune similarly accused the FDA of contradicting earlier feedback when it declined to approve melanoma treatment RP1 in April 2026. The Agency disputed that account, citing concerns about the trial’s design and interpretation. RP1 subsequently received accelerated approval in August 2026.

“So you have uncertainty plus you have higher costs,” says Wiklund. “Why do you pick the US?”

McGrath also worries about the potential loss of institutional knowledge. “If you make the people at the FDA feel concerned about their jobs, they might leave,” he says. “I want to make sure that people who are experienced in drug development are encouraged to stay and help.”

Others caution against interpreting those difficulties as evidence that the US has lost its appeal. David Mix, Program Manager at Act for Hope, an initiative bringing together cell and gene therapy stakeholders to improve collaboration and patient access, points to international companies establishing US manufacturing subsidiaries and gaining access to American capital. “There's so many ways that the market is functioning in a really healthy way, in spite of political uncertainty,” he says. Established pharmaceutical companies, clinical networks, and regulatory expertise continue to support development. “You're going to always have pockets of innovation, you're going to have pockets of manufacturing, you're going to have political uncertainty, but the innovators are always going to find a way to innovate.”

Stuart Lowe, Head of Advanced Therapies at TTP, where he leads a team that helps cell and gene therapy developers design manufacturing systems, points to the continuing demand from US-based pharmaceutical companies for new medicines to replenish their portfolios as existing products lose patent protection. Their appetite for acquisitions helps draw promising therapies into the US market. Investors, meanwhile, are pushing developers to address substantial unmet needs. “It's not good enough to have an incremental improvement on a CAR T,” he says. “You need to be a strong value proposition.”

For Wiklund, however, these difficulties create an opening for a Chinese industry. “They set this in motion 15 years ago. This is not just something that happened in reaction to the Trump administration two years ago,” he says. “They were in position to take advantage of it because they've done all this stuff for a decade beforehand.” With Western companies increasingly looking to China for early development, he believes the US risks surrendering some of its leadership in pharmaceutical innovation: “The center of gravity has always been the US for the most innovative early stage drugs. And it still is, but I think it's rapidly losing or giving away market share to China.”

Pashazadeh argues that China’s stated ambitions raise a question about the Western response. “The Chinese are now telling you clearly they’re going to become a global player. How are you going to make sure that you remain relevant at the table?” he asks. “I’m yet to hear a congruent answer.” Large pharmaceutical companies already have interests in China, and investors are following, he argues. But these individual decisions do not amount to a coordinated strategy. “Every vertical is optimizing for itself. There’s no collective.”

Part of the explanation, he believes, is that the commercial pressure is not yet strong enough. Among contract research organizations, he sees a division between China’s growing role in early development and the later-stage work that sustains large international providers. “The Chinese focus at the moment is Phase I, early Phase II. The US CRO focus is Phase II, Phase III. So you’re not yet eating each other’s lunch,” he says. However, if Chinese providers begin taking a significant share of later-stage trials, he expects a much stronger reaction. “The lack of reaction is because the pain point isn’t quite there yet.”

Renny identifies a reluctance to commit public funding as one obstacle. “Washington has no package of support for medicines comparable to China’s,” he writes. A science policy adviser he spoke to argued that America struggles to support products with long lead times, "whereas China’s five-year plans support infrastructure knowing the returns may take years to materialize."

“A genuine first” 

China’s latest plan sets ambitions that extend well beyond providing development services. Its target for Chinese-origin first-in-class drugs puts original innovation at the center of the strategy. And there are signs of that ambition taking shape in cell and gene therapy.

For example, in June 2026, China’s National Medical Products Administration approved CARsgen's satri-cel for Claudin18.2-positive gastric cancer, the world's first CAR T approved for a solid tumor. “It isn't approved anywhere else yet,” says BevMenner, CEO of Cell Therapies, a contract development and manufacturing organization based in Melbourne, Australia. “That is a genuine first, not a fast follow.”

Cell Therapies’ work with Chinese developers is, says Menner, relatively new, and growing quickly. “Developers increasingly come to us weighing a choice: run an investigator-initiated trial in China, or a phase 1 in Australia,” she says. Earlier this year, Menner and her Director of Commercial Business Development spent time in China to understand the ecosystem first-hand, meet developers, CDMOs, clinical sites and equipment manufacturers, and attend the China Cell & Gene Therapy Conference in Beijing in September.

“In vivo CAR-T is now seen as the next battlefield, with a diverse range of companies and technologies competing,” she says. “And the investment goes well beyond buildings and clean rooms: it's in people, innovation and the regulatory framework.” Commercial success remains uncertain, however. “If in vivo succeeds, and that is still a big if, I'd be surprised if some of the first commercial in vivo CAR T products don't come through China.”

For Drew Hope, Senior GMP Compliance Consultant and UK QP at eXmoor Pharma, this ambition is supported by a maturing scientific and manufacturing ecosystem, including stronger links between hospitals and industry and companies developing their own technology platforms. “The conversations have moved well beyond whether China can innovate in cell and gene therapies,” says Hope “We are now understanding how Chinese innovation, manufacturing capacity and clinical development capability will be integrated into global biopharma strategies.”

Pashazadeh argues that China is funding the entire development cycle – underwriting scientists and biotech companies to allow them to grow and be successful. “You need to fund each part of the cycle in order for you to be successful,” he says. “China has put that 360 in place.” 

That coordination is visible in the infrastructure being built around Chinese developers. Speaking to The Medicine Maker earlier this year, Daphne Smyth, who leads global regulatory affairs at Veristat, described visiting a hub near Shanghai that brought research, development, manufacturing, hospitals, and education together. “It’s [really] a science city,” she said. “Nearly 300 square kilometers of startups, manufacturing, hospitals, universities – all fully integrated and fully supported by the government.” What struck her was how those activities connected: “Companies can effectively move from early discovery to full-scale production within one integrated environment.”

“It’s difficult to internalize it until you’ve actually experienced it,” she added.

For Menner, an important test will be whether Chinese developers begin taking more of their medicines to global markets themselves. Licensing assets to multinational pharmaceutical companies has provided a route to international development, but retaining responsibility for commercialization would give Chinese companies a larger role in the industry. She identifies “Chinese developers taking assets to global markets themselves, rather than only through large pharma” as one of the changes to watch. “That would be a real shift in the industry,” she says.

Ambition meets reality 

There are, however, challenges that China must overcome before it can achieve the aims set out in the Five-Year Plan – particularly with regard to innovation. Lance Han points to an investment culture that has historically discouraged the risk-taking needed to develop first-in-class medicines. China has spent years building infrastructure, attracting experienced scientists from overseas, and expanding its technical capabilities, he argues, but investors have often favored approaches already validated elsewhere. “It's not like the Chinese don't like to innovate,” he says. “It's that the environment doesn't allow you to be too innovative.” For companies that fail, he adds, the consequences can be severe: “You'll be in deep, deep trouble.”

That caution also influences government-backed venture capital funds, through which provincial and city governments seek to attract private investment. The existence of those funds does not necessarily mean developers pursuing unproven ideas can secure backing. Han says investors have typically preferred drugs with an established precedent, including those intended to improve on an FDA-approved product. “If there's no precedent, nobody has succeeded before you, then they don't even invest in you.”

Han believes the latest Plan could help change those expectations by encouraging both innovation and greater tolerance of failure. He already sees Chinese clients pursuing novel approaches through his company's CRO services. “They are working on some of the new kinds of modalities that nobody else has tried before, not even the Western companies,” he says. “I think in the upcoming five years, we're going to see more first-in-class drugs.”

Funding innovation is only part of the challenge. Developers also need equipment that can take a therapy from early studies to commercial production. Lowe says the industry remains poorly served by scalable manufacturing technologies, with bottlenecks ranging from equipment footprint and facility requirements to the number of people needed to operate systems and transfer material between them. “The battle to be won is around scaling technologies,” he says. “Not just bioprocessing equipment that can get you to your first-in-human trial, but the bioprocessing equipment that can get you all the way through pivotal and into commercial.”

Lowe sees China beginning to address that gap. Chinese companies are approaching his team with requests for hardware innovation, including new ways to introduce genetic material into cells and process patient tissue. He argues that China’s coordinated approach can support the engineering needed alongside therapy development. Equipment developers are also looking beyond the domestic market – ambitions that could encourage investment in technologies capable of producing therapies at greater scale. “They are thinking big,” he says. “They have to have a very, very big target market in mind. It will drive the desire for scalable technologies for sure.”

Alexander Seyf, co-founder and CEO of Autolomous, sees another advantage in how readily Chinese companies adopt digital technologies. “If you don't have the information that you want to use the AI for in digital format, it's very difficult to do anything about it,” he says. In his experience, Chinese companies understand the importance of that digital foundation, making it easier to adopt new tools and improve processes. “Everything they do is digital because it gives more scalability, more control for good or bad, and it makes it more cost effective for change and progress.”

Another challenge, however, is ensuring that clinical data generated in China can support development elsewhere. Investigator-initiated trials (IITs) have offered developers a relatively fast, low-cost way to obtain early evidence in patients. But evidence that helps a company decide whether to advance a therapy may not satisfy overseas regulators. “The biggest barrier is data acceptance,” says Menner, “so developers end up repeating work elsewhere.”

China is strengthening oversight of hospital-based research, although that may come at a cost to speed. State Council Order No. 818, which took effect in May, establishes national requirements for research and clinical application involving new biomedical technologies, alongside the separate drug-development pathway. Han says tighter restrictions on IITs are already eroding some of their appeal: “Now the IIT is not as easy as before.” Hope likewise reports that greater scrutiny has slowed the process, while Menner sees an opportunity to improve confidence in the resulting evidence. “The more early Chinese data meets international standards, the less duplication there will be,” she says.

For developers, the implication is to plan for international requirements before beginning early studies. Quality varies between institutions, Menner cautions, and companies should ask whether a prospective partner’s data has supported submissions outside China. “The lesson is to judge the site in front of you, not the country.” Stronger domestic oversight may help, but developers still need to establish whether their studies and manufacturing processes will meet the expectations of regulators in their intended markets.

Finally, companies considering development partnerships in China need confidence that they can protect their intellectual property. For Wiklund, the concern is what would happen if a partner copied a therapy despite patents and contractual protections. “If that happened in the US, I would be pretty confident that we would win in a lawsuit,” he says. But he is less certain about securing the same outcome in China – an uncertainty that can weigh against the financial and practical advantages of working there. “That can be an argument for staying away.”

The risks are illustrated by the case of Taiwan-headquartered JHL Biotech. Its former CEO and COO pleaded guilty in 2021 to conspiracy to commit trade secret theft and wire fraud, and were sentenced in a US federal court the following year. According to their plea agreements, confidential Genentech information helped accelerate JHL’s biosimilar development and reduce costs. Genentech technology-transfer documents were also used to develop, construct, and operate JHL’s manufacturing facility in Wuhan. The case demonstrates the potential misuse of manufacturing know-how, although the US proceedings do not establish how Chinese courts would have handled the dispute (6).

Han takes a more reassuring view. “I don't think even in the Chinese court, if you are a Western company against a Chinese company, that the Chinese company is going to be favored,” he says. He recalls his own company facing a claim from a US firm over the use of its software – an experience that left him unconvinced that domestic companies receive preferential treatment. “They will examine the cases individually. I don't see any preferential treatment.”

China has also developed a specialist judiciary for intellectual property (IP) disputes, establishing dedicated courts in Beijing, Shanghai, and Guangzhou in 2014, followed by a national-level appeals mechanism within the Supreme People’s Court in 2019. And there are examples of foreign pharmaceutical companies securing IP protection in China. In 2013, Shanghai No. 1 Intermediate People’s Court granted Eli Lilly and its Chinese R&D subsidiary a preliminary injunction preventing a former researcher from disclosing or using 21 documents over which they claimed trade secret protection (7). More recently, a 2022 administrative decision by China’s National Intellectual Property Administration ordered HEC companies to stop infringing sales of linagliptin tablets following a complaint from Boehringer Ingelheim. An HEC company subsequently confirmed that affected products were removed or suspended from government purchasing platforms (8). 

For Hope, assessing IP protection is part of the work required before entering any partnership. “Partnerships need to be built on a clear understanding of technical maturity, governance, IP position, regulatory alignment and cultural expectations,” he says. That means examining IP ownership and freedom to operate alongside the practical terms of collaboration, including who controls materials, data, and decisions.

Wiklund’s enthusiasm for development in China comes with a similar qualification: Circio would not attempt to run a clinical study there independently. “There are a lot of unknowns in China,” he says. “So going that path requires doing it with a strong local partner.” He envisages an arrangement in which the Chinese partner manages development and retains rights in China, while Circio holds rights elsewhere.

Successful partnerships also depend on understanding differences in business culture. Neil Hunter, Director of Hunter PR, who has worked on communications around partnerships between Western and Chinese life science companies for 15–20 years, recalls seeing collaborations falter despite apparently sound technology and financial backing. “The technologies were great, everything was great, but people just didn't appreciate where the other was coming from,” he says.

Wiklund’s experience suggests that international experience among Chinese biotech leaders can help overcome those barriers. He finds the Chinese companies he works with comparatively easy to collaborate with, attributing this partly to the return of executives trained or employed overseas. “Most of the Chinese companies, at least the people that face a foreign company, are returnees from international jobs that speak excellent English, are used to dealing with the contracts and business the way we do, and that makes that experience very smooth,” he says.

Having also worked with companies in Japan and South Korea, Wiklund says he has sometimes encountered greater cultural and language barriers in those relationships. His Chinese counterparts, by contrast, are often “very westernized in many ways.” For him, their familiarity with international business practices makes collaboration easier.

Menner recommends seeking partners with experience of international collaboration and the regulatory and data requirements it entails. Her strongest advice is to visit. “Nothing replaces being in the room. Don't rely on video calls and email. Walk the facilities, meet the team, share a meal,” she says. “That matters in business anywhere, but in China I came away convinced it can make or break a partnership.”

What patients stand to gain  

China appears on course to rival the US as a major biopharmaceutical power. How quickly it can do so, and whether it can meet its ambitious five-year targets, remain open questions. The US, meanwhile, retains considerable scientific and commercial strengths despite its current political uncertainty. As Lowe puts it: “That doesn't mean that the US isn't a big player, just means there's two of them.”

For Pashazadeh, engaging with China must accompany a clearer strategy for sustaining development at home. “Hopefully what you'd expect is if there was going to be a reaction when China puts out a strategy, other countries can say, ‘Well, this is my strategy.’” He believes the window for responding is narrowing: “The time window to react to it in my mind is 12, 24 months. We don't have another 10 years to respond.”

For patients, the significance may lie less in which country leads than in whether competition produces more effective, affordable medicines. Pashazadeh expects it to increase the number of drugs developed and force Western companies to become more efficient. “I think the patients will benefit from it,” he says. 

For cell and gene therapies, affordability will be an important test. “The field has largely answered whether these therapies work. The next question is how to make them affordable and reach more patients,” says Menner. She expects China’s investment in manufacturing technology to contribute: “China is pushing hard on exactly that, and I'd expect it to lead in using automation and AI to bring the cost of goods down.”

“I would be terribly worried if what's happening in China would remain in China,” observes Forte, “because I'm seeing good work happening there and that could benefit patients everywhere.”

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