Global drug companies are licensing more new medicines from China

In short: Big pharmaceutical companies are increasingly looking to China for new drugs to license, as Chinese biotech firms produce more AI-assisted drug research and more deal flow.

What's going on

Global drug makers are aggressively pursuing drug discovery and licensing deals in China. Chinese biotech companies now make up about 70% of global patent filings tied to AI-driven drug discovery. They also represent about 32% of the global value of out-licensing deals, which is about four times higher than in 2021.

This is showing up in the deals themselves. About 40% of the drugs licensed in by pharmaceutical companies in 2025 were discovered in China. Chinese drug makers also signed a record $135.7 billion in out-licensing deals in 2025, up from $51.9 billion in 2024. At the J.P. Morgan Healthcare Conference in January 2026, Chinese biotech firms reportedly closed around $7.3 billion in deals during the conference week.

One reason is speed and scale in clinical trials, which are studies that test a medicine in people. China ran about 7,700 clinical trials in 2025, compared with roughly 6,200 in the US. This creates what some call “data gravity” (like having a bigger factory that produces more test results), which lets companies update their AI models more often as new results come in.

What to watch

China has also announced an “AI Plus” program to support biopharma, and it has large patient datasets that can help train AI systems. Analysts say China could approve one of the first fully AI-designed drugs in 2026. If that happens, it could increase pressure on global drug makers to do more partnerships in China instead of building all their AI drug research in-house.

Source: Financial Times