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The effort by China’s leading pharmaceutical companies to accelerate research and development is starting to pay off, as their latest half-year financial reports reveal that income from innovative medicines now surpasses that from generic drugs.
Hengrui Pharmaceuticals reported that revenue from new drug sales and licensing reached CNY9.6 billion (approximately USD1.3 billion) in the first six months, making up nearly 61% of the company’s total income. Nearly half of this revenue—CNY7.6 billion—came directly from innovative drug sales.
Similarly, Simcere Pharmaceutical Group experienced a 15% increase in revenue, totaling CNY3.6 billion. Its income from new medicines soared by 26%, reaching CNY2.8 billion, which now accounts for over 77% of its total revenue.
Traditionally, Chinese pharmaceutical manufacturers have relied heavily on producing generic medicines. However, increased competition from foreign firms and government initiatives to lower drug prices through bulk purchasing programs have pushed these companies to focus more on innovation to improve profitability.
Hengrui Pharma invested nearly CNY3.9 billion into research and development during the first half of the year, bringing its total R&D expenditure to CNY48 billion (about USD6.7 billion). The company currently has over 100 independently developed products in clinical trials and more than 400 ongoing clinical studies both domestically and internationally.
Hansoh Pharmaceutical Group’s recent financial disclosures show that revenue from innovative and licensed products was about CNY6.1 billion, a 22% increase from the previous year, representing 83% of its overall revenue. The company highlights these newer medicines as the main drivers of its ongoing growth.
Over the last decade, Simcere Pharma has allocated over CNY10 billion to research and development and has built a pipeline of more than 60 innovative projects, as detailed in their financial reports.
Most of these companies’ revenues from innovative treatments currently come from the domestic market. However, this may change soon, as many have obtained overseas licensing rights for their research-stage or clinical-stage drugs. Through licensing agreements, they are collaborating with international partners to expand their global reach and maximize the value of their novel medicines.
For instance, Hengrui Pharma has completed 15 licensing deals abroad. These collaborations are designed to help the company’s innovative drugs accelerate into international markets, engage with global drug research networks, and enhance product value.
Similarly, Simcere Pharma has licensed three of its internally developed drugs internationally, viewing this as a new, sustainable avenue for growth.
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