The National Medical Products Administration (NMPA) has announced further optimizations to the review and approval process for clinically urgent drugs already marketed overseas, aiming to accelerate their availability in China and meet patients' urgent clinical needs. The NMPA stated it will adhere to a clinical-value-oriented approach, encouraging applicants to conduct global synchronous development and synchronized market application submissions in China. It also encourages the submission of applications in China for clinically urgent, overseas-marketed originator drugs and their generic versions, with eligible products potentially included in the priority review and approval channel. The announcement indicates that the NMPA will optimize its review mechanisms to speed up the approval process, while also refining the inspection system to reflect the characteristics of individual drug varieties. In 2025, China approved a record high of 76 innovative drugs for market launch, significantly surpassing the 48 approvals recorded for the full year of 2024. Furthermore, the total transaction value of China's innovative drug out-licensing deals exceeded $130 billion in 2025, with the number of licensing deals surpassing 150, also setting a new historical record. Among the 76 innovative drugs approved by the NMPA in 2025, 47 were chemical drugs, 23 were biological products, and 6 were traditional Chinese medicines. Of the 47 chemical drugs, 38 were domestically developed innovative drugs and 9 were imported innovative drugs, meaning domestic innovative drugs accounted for 80.85%. Among the 23 biological products, 21 were domestically developed innovative drugs and 2 were imported, resulting in a 91.30% share for domestic innovative drugs. Several key industry policy breakthroughs have been achieved, including the official release of the first edition of the "Commercial Health Insurance Innovative Drug Directory" in December 2025. This directory establishes a multi-level payment system described as "basic medical insurance covering basics, commercial insurance covering innovation," creating a new market pathway for high-value innovative drugs. Looking ahead to 2026, industry insiders are broadly optimistic. Supported by industrial policies favoring genuine and high-level innovation, a significant number of innovative drug business development (BD) deals are expected to be finalized intensively. Driven by the dual engines of commercial health insurance implementation and optimized centralized procurement, the high-growth momentum in the innovative drug industry chain is anticipated to continue, with high-value innovative drugs potentially entering a second growth curve. Hong Kong-listed innovative drug companies include: Hengrui Pharmaceuticals (01276), Kelun-BTB Biotechnology-B (06990), HUTCHMED (00013), AKESO (09926), Innovent Biologics (01801), CSPC Pharmaceutical Group (01093), RemeGen (09995), 3SBio (01530), Jacobio Pharmaceuticals-B (01167), Laekna Therapeutics-B (02105), and Hansoh Pharmaceutical (03692), among others. Leading companies in the related CXO sector include: Asymchem Laboratories (06821), Pharmaron (03759), Joinn Laboratories (06127), WuXi Biologics (02269), and WuXi AppTec (02359).
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