In 2025, Chinese innovative drug out-licensing deals delivered a striking set of numbers.

 

In terms of transaction value, upfront payments for out-licensing reached US7 billion; including milestone payments, the total exceeded US7billion;includingmilestonepayments,thetotalexceededUS135.6 billion – a simple average of over US$300 million per day flowing into Chinese innovative drugs from international sources. In terms of deal volume, 157 transactions also set a new record.

 

This trend shows no sign of slowing. Entering 2026, the total value of out-licensing deals in the first quarter alone approached US$60 billion, nearing the full-year level of 2024.

 

But alongside the excitement, the industry must acknowledge another reality: the vast majority of these hundred-billion-dollar deals purchased overseas R&D rights to drug candidates, not finished drug products already approved and marketed in China. Diverging from the sought-after clinical potential of innovative molecules, the NMPA drug registration certificate itself has yet to establish its own system of authority overseas.

 

This gap has far-reaching implications.

 

A domestically developed innovative drug approved by the NMPA after rigorous review, seeking to enter Hong Kong, has historically needed to rely on reference country approvals from Europe or the US. To enter European or American markets, a dedicated international multi-regional Phase III trial is typically required, with budgets ranging from US200 million to US200milliontoUS500 million – enough to exhaust the cash-strapped resources of most biotechs.

 

Novel drug pipeline assets command sky-high prices for out-licensing, yet the registration certificates themselves face barriers abroad. This structural disconnect forms the core tension in the current internationalization of Chinese innovative drugs.

 

TONACEA 01: Data and Registration Certificates

 

To understand this tension, it is necessary to clarify a distinction often conflated in industry discussions: data mutual recognition is not the same as registration certificate mutual recognition.

 

In 2015, China initiated reforms to its drug review and approval system. Two years later, in 2017, China's drug regulatory authority officially joined the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), and in 2018 was elected to the ICH Management Committee. China's drug registration management system accelerated its alignment with international standards.

 

To date, China has fully implemented 71 ICH guidelines, and the applicability of ICH guidelines in China's drug review process has reached a high level.

 

The core of the ICH framework is the mutual recognition of technical data. Zhang Dan, Co-Chairman and Co-founder of Puxin Bio and Co-founder of QuaLiMed, noted in an interview with TONACEA that after China joined the ICH, other member country drug regulatory agencies within the framework would recognize data generated in China.

 

"However, they don't automatically recognize it," he further explained. "If you claim compliance with ICH requirements, and other national drug regulatory agencies inspect your work and find that you meet the standards, then they cannot refuse recognition."

 

The benefits of this mutual recognition mechanism are clear. Animal toxicology, clinical trial, and manufacturing data generated by pharmaceutical companies to ICH standards gain credibility, eliminating the need for redundant full-scale studies and supporting collaborations with overseas companies.

 

Zhang believes the recent wave of Chinese innovative drug globalization is closely linked to China's ICH membership. "Without this mutual recognition, Chinese innovative drug products could not be transferred out." However, he emphasized that data mutual recognition is distinct from whether that data is sufficient to support a marketing application overseas. The FDA may recognize Chinese data but can still request additional data it deems necessary.

 

He Ruyi, whose experience spans regulation, investment, and industry, and who has worked at regulatory agencies in both China and the US, has expressed a similar view.

 

"The international community recognizes China's innovative drug R&D capabilities but does not fully trust China's clinical trial data." He observed that at this stage, many successful out-licensing deals involve early-stage assets, from preclinical to Phase I.

 

In other words, international buyers remain cautious about large-scale Phase III clinical data from China. For them, a mature product approved in China represents greater regulatory responsibility and market risk. After licensing-in assets, MNCs prefer to leverage their own experience in multi-regional clinical trials and regulatory interactions for subsequent registrations, rather than directly using NMPA approval documentation.

 

Notably, in regions like Southeast Asia, the credibility of the NMPA still needs strengthening.

 

Professor Zhu Xun, Founding Chairman of the TONACEA New Drug Talents Club, told TONACEA that through field research, he found that even though China's model of supplying high-quality drugs at extremely low costs clearly benefits these countries, promoting the NMPA registration certificate still faces institutional resistance.

 

For example, Zhu proposed to the Malaysian drug regulatory authority selecting a group of biologics already marketed in China for over three years. With substantial population exposure data, he suggested that only a few bridging trials could allow rapid approval for the Malaysian market, with drug prices potentially 1/10 to 1/30 of those in the US. Even so, the Malaysian authority insisted on prior US approval.

 

This is less about technical quality than about regulatory path dependency – most countries' drug regulatory systems have long used the FDA and EMA as benchmarks and remain highly cautious about any new player.

 

Many ASEAN countries have established a "white list" of Reference Regulatory Agencies, primarily including ICH founding/standing members and internationally recognized stringent regulatory authorities, typically those of the US, EU, UK, Switzerland, Canada, Australia, Japan, etc.

 

Zhang Dan noted that differing orientations in drug approval are perfectly normal. For example, GSK's bivalent HPV vaccine Cervarix was first approved in the EU in 2007, received FDA approval in 2009, and then took another eight years – until 2017 – to enter China. The Chinese population had access to the HPV vaccine a full ten years later than Europe!

 

The gap between "converging technical standards" and "mutual trust in regulatory sovereignty" is an objective fact and challenge, and the international recognition of China's drug registration certificates is no exception.

 

TONACEA 02: Lessons from Others

 

Initiatives to promote mutual recognition of drug approvals and market access overseas do exist as models to learn from.

 

The most frequently cited is the US-led Project Orbis. In 2019, the FDA Oncology Center of Excellence launched this initiative in collaboration with Health Canada and the Australian Therapeutic Goods Administration (TGA), aiming to shorten the time to market for cancer drugs across multiple countries.

 

Project Orbis now includes an "eight-country alliance" – the US, Canada, Australia, Singapore, Switzerland, Brazil, the UK, and Israel – with approval scope covering advanced therapies like CAR-T.

 

Internally, Project Orbis's success relies on comparable regulatory capabilities among participating countries, closely aligned review standards, and long-established institutional trust.

 

"The US launched this alliance partly to allow oncology innovative companies to quickly recoup their investments. With simultaneous approvals across multiple countries, they can rapidly enter multiple markets," Zhang explained. The process does not involve other countries simply waiting for US approval; rather, they share review data, form a consensus, and move together.

 

For companies, this adds a layer of difficulty to the approval process. A product that could have been approved in a single market with lower regulatory requirements could be rejected due to higher standards when applying jointly across multiple countries.

 

From a regulatory perspective, not every authority can achieve such integration. China, the EU, and Japan, for example, have not joined Project Orbis.

 

As early as 2020, consulting firm Citeline identified confidentiality agreements as a major barrier to China's participation. Project Orbis requires real-time, highly transparent sharing of company trade secrets, raw data, and review comments among participating agencies before decisions are announced.

 

Former FDA Oncology Center of Excellence Director Richard Pazdur has also repeatedly noted that for oncology clinical trials conducted solely in China, the FDA lacks a long-term inspection history and regulatory experience with the trial sites, making it difficult to rely solely on such data for systemic approval. The FDA prefers to build long-term confidence in Chinese clinical sites and data through global multi-regional clinical trials (MRCTs).

 

In contrast to Project Orbis, ASEAN has attempted a different approach. The ASEAN Joint Assessment allows a drug company to submit a product for joint assessment by at least three member state regulatory agencies, resulting in a joint assessment report.

 

However, a critical design gap remains: ASEAN has yet to establish a mutual recognition mechanism for approvals among member states. Companies must still submit essentially full registration dossiers to each country individually.

 

Thus, the so-called "joint assessment" is more about collaboration at the document review stage, not a "one certificate, multiple countries" arrangement. Each member state's authority must still sign off according to its own laws and regulations, leading to potential differences in certificate timing, site inspection (GMP) requirements, etc.

 

Rxilient, founded in 2021, is already on the path to Southeast Asia. In 2023, Rxilient and Junshi Biosciences signed a joint venture agreement in Singapore to promote the registration and commercialization of the PD-1 antibody Toripalimab in Southeast Asian countries including Thailand, Malaysia, the Philippines, and Vietnam.

 

In the eyes of Rxilient CEO Yan Lian, internationalization requires understanding the language and logic of each market and then entering it on local terms.

 

"We divide Southeast Asia into three categories: Singapore is a mature market with high GDP and strong payment ability, with high demand for innovative drugs; Thailand and Malaysia are fast-growing countries with developing but not yet mature reimbursement systems; the Philippines, Vietnam, and Indonesia have lower payment ability but large populations and rapid growth – they are the most attractive potential markets of the future." Yan Lian made this comparison.

 

Wang Jing, Chief Commercial Officer of CanSino Biologics, similarly emphasizes empathy.

 

She offered the example of CanSino's flagship product, the quadrivalent meningococcal conjugate vaccine Menhycia. To enter Indonesia, the company conducted extensive field research, helping to build local system capacity from disease discovery onward, finally succeeding in opening the market.

 

"In these countries, when we communicate with experts from hospitals and health systems, we realize that most experts and doctors were trained in Europe or the US and read literature and books from those regions. In this context, how can Chinese companies establish influence?" Wang Jing reminded not to impose. Pharma companies must think from the customer's perspective and then look at what products and values they have that can match – this is the basic mindset.

 

TONACEA 03: The Authority of the NMPA

 

How can the standing of the NMPA registration certificate be enhanced? Industry perspectives vary.

 

Professor Zhu Xun offers the most systematic and "top-down" approach. He consistently argues for using national-level diplomatic platforms to promote multilateral mutual recognition.

 

His specific vision involves convening a health sub-forum during the Belt and Road Forum for International Cooperation, inviting drug regulatory agency heads and health ministers from participating countries to visit China's drug review agencies and manufacturing facilities to build understanding and trust. In his view, relying solely on company-level BD deals cannot solve the structural barrier to mutual recognition of registration certificates. "Without government involvement, this won't happen."

 

"Once you have that first top-level government interaction, it creates a guiding effect, and things will flow more smoothly afterward." Zhu has previously submitted a systematic proposal to the State Council through the Nanjing municipal government of Jiangsu Province, hoping to realize this vision.

Zhang Dan, however, analyzes that establishing regional alliances involves complex practical interests, making it very difficult.

 

"Japan has also tried to do this without success. Can China succeed?" he asked. "Why should others recognize China's registration certificate? What benefit do they get? You need to articulate that clearly, commit to delivering, and through negotiation, maximize the benefits for all parties."

 

Distinct from this top-down approach, Zhang focuses more on company-level practical actions. The underlying logic is that the value of the NMPA registration certificate ultimately comes down to whether a local innovative drug can successfully apply for marketing overseas. This process is less about mutual recognition mechanisms among regulatory agencies and more about how a company deals with specific regulators.

 

This is precisely where Chinese pharma companies show a dimension ripe for change: the internationalization of executive teams.

 

BeiGene serves as a benchmark. CEO John V. Oyler is a native American who had multiple prior successes in the industry before founding BeiGene, greatly benefiting the company's global regulatory interactions, especially in the US.

 

"Many pharma companies fail in going global because their management teams lack sufficient representation from local Europeans and Americans," Zhang stated candidly. He advises that companies should have a broad vision and not insist on independent, full-service globalization. "When you cannot quickly establish a sales system on your own, consider collaborating with local companies that already have mature sales systems, whether through forming a joint venture or transferring IP, enabling a learning process when entering that country's market for the first time."

 

Zhu Xun suggests that local pharma companies should next attempt some in-licensing or acquisitions. This is fundamentally different from the Greater China rights in-licensing deals popular in previous years.

 

China's international standing in the pharmaceutical industry is reflected to some extent in its representative companies. Zhu hopes to see several domestic benchmark companies leading the way. An important dimension of that standing is having a presence overseas. Therefore, acquiring overseas assets – whether new drugs or companies – as a way to integrate into local systems will become a rapid path to globalization.

 

In April, the largest overseas acquisition in the history of the Indian pharmaceutical industry was finalized. Sun Pharmaceutical Industries acquired US-based Organon for US$11.75 billion in an all-cash transaction. Zhu suggests this transaction is a transformational example worthy of attention from domestic pharma companies.

 

TONACEA 04: The Battle Over Standards

 

An industry consensus is that many countries and regions, such as Southeast Asia, do not yet recognize China's Certificate of Pharmaceutical Product (CPP), presenting a major barrier for Chinese pharma companies going global.

 

This situation is fundamentally about where standards are set.

 

Rxilient's CEO Yan Lian has publicly emphasized, "Rxilient focuses on high-quality products from both East and West, not using the FDA/EMA 'pass' as the sole criterion." The internationalization strategy of its parent company, CMS, is to provide a trustworthy one-stop landing mechanism for global partners to improve local access to high-quality medicines.

 

Zhu Xun believes that Chinese drug regulatory authorities need not always follow the FDA's lead but should establish their own standards, similar to China's position in electric vehicles, photovoltaics, and other fields.

 

"For traditional small molecules and large molecules, we don't have much wiggle room," he further analyzed. "But in some emerging areas, such as cell therapy, China's innovation capabilities are fully comparable to the US. This is our opportunity."

 

Zhu identifies several such breakthrough areas: First, radiopharmaceuticals. Although there are blockbuster products from Novartis in the US, the FDA's standards are not yet overwhelmingly dominant. Second, live biotherapeutic products (LBPs). The FDA has issued guidelines, but development still faces challenges. In comparison, China has approved more LBPs, with new products from companies like Osaid Pharma currently filing for approval. Third, biosimilars.

 

"The world currently follows FDA standards, calling them 'biosimilars.' Chinese biosimilars are mostly filed for approval as Class I biologics. I have been advocating for over a decade that China could propose the concept of 'biogenerics,'" Zhu added.

 

The biosimilar framework focuses on similarity and rarely mentions the concept of an active pharmaceutical ingredient (API) or bulk drug substance. However, if regulated under a "biogeneric" pathway, the core would be the bulk drug substance itself – making it extremely standardized, like a small molecule API, ready for direct fill-and-finish. This is precisely China's strength.

 

If such a standard system could be established and exported, China could gain a dominant position in the global biologics market – in Zhu's words, off-patent generic drugs for European and American markets could be manufactured in China and then sold globally.

 

The challenge is that such standard-setting must be government-led and requires collective industry advocacy – an outcome Zhu hopes for from the inaugural China Pharmaceutical Innovation Conference hosted by TONACEA in July.

 

More national-level efforts are also gradually materializing, such as attempts to join the Pharmaceutical Inspection Co-operation Scheme (PIC/S).

 

Founded in 1995, PIC/S is the most important international organization in the field of global GMP inspection. As of January 2026, PIC/S had 57 participating regulatory authorities, covering major global pharmaceutical markets. PIC/S's core goal is to promote global harmonization of GMP inspection standards and quality systems.

 

The NMPA made its first bilateral contact with PIC/S in 2019. In November 2025, at a PIC/S committee meeting in Hong Kong, a landmark discussion occurred, reaching agreement on a concrete roadmap for NMPA accession to PIC/S. Optimistic estimates suggest NMPA could formally join PIC/S in 2027-2028.

 

Similarly, in the vaccine field, in November 2025, NMPA officials met with representatives of the WHO's Regulation and Prequalification department to discuss WHO Listed Authority (WLA) assessment and subsequent collaborations. Reports indicate the NMPA is actively studying vaccine WLA assessment.

In conclusion, enhancing the international standing of China's drug registration certificate is not a purely technical issue, nor a political issue that can be resolved overnight. It involves complex interactions of regulatory sovereignty, institutional trust, industrial capacity, and geopolitics, requiring long-term exploration.

 

The road is long, but with persistence, the destination will be reached.