China Pharma & Biotech: Policy headwinds and implications for valuation

Research evidence excerpt

China Pharma & Biotech: Policy headwinds and implications for valuation

18 June 2026

China Pharma and Biotech

China Pharma & Biotech: Policy headwinds and implications for

valuation

We review recent US and China policies - a trigger of the recent healthcare sell-off - and Rebecca Liang, Ph.D.

+852 2123 2656 estimate the potential impact on innovative drugmakers in this note.

rebecca.liang@bernsteinsg.com

US policies and legislative efforts (Biosecure Act, COINS/BINSA) increasingly target the

Ellie Li full stack: capital flows, data access, licensing, and supply chains. While implementation

+852 2123 2621 remains staged, the direction is unambiguous and calls for reduced US capital ellie.li@bernsteinsg.com

participation, tighter scrutiny on cross-border deals, and rising friction in

collaboration. This shift matters because the US still anchors global pharma economics,

representing ~50–60% of commercial value, and therefore sets the ceiling for any globally

oriented asset. Meanwhile, China’s domestic policies remain supportive on innovative

drugs, aside from potential scrutiny on IP outflows. Investors may be concerned about

incremental friction on out-licensing, companies generally indicate continued flexibility in

transferring product-level IP (as opposed to core platform technologies).

Recently, a simplified narrative of China’s rapid rise in biopharma is becoming increasing

common. We see a more nuanced picture: the innovation engine continues to scale rapidly,

but remains structurally front-loaded. China now accounts for a meaningful share of global

early-stage activity (~30–40% of preclinical, ~50% of early clinical pipelines, and ~55% of

first clinical trial registrations in 2026 YTD), reflecting genuine improvements in research

capability and development speed.