Big Pharma is Making Chinese Biotechs Prosper

Big pharmaceutical companies are collaborating with Chinese biotechnology firms despite Washington's efforts to restrict such practices. In the first five months of this year, there were $43 billion in licensing agreements between U.S. companies and Chinese biotech firms. By June, Chinese biotechs had signed 81 out-licensing deals worth $110 billion, which accounted for about 80% of all deals made last year.

Major pharma companies like AbbVie, AstraZeneca, and Pfizer have struck significant partnerships with Chinese biotechs, with deals totaling $53 billion. The structures of these deals are evolving, with companies licensing entire drug-discovery platforms rather than individual molecules, resulting in larger deals that are three times bigger than typical single-asset licenses.

Upfront payments to Chinese partners have more than tripled, increasing from about $52 million in 2022 to $172 million in early 2026. This shift in dealmaking is attributed to the economics of pharmaceutical trials, as trials in China are significantly cheaper and faster compared to those in the U.S. Despite political pressure from bipartisan lawmakers and the Trump administration, who label China as a biotech rival and subject biotech firms to a national-security screening regime, dealmakers are continuing to make deals.

Both sides recognize the risks, but Congress may not be able to pass the COINS Act expansion in time to slow down the momentum.