China Pharma & Biotech: 2Q/1H26 earnings preview - amid anti-corruption and VBP, innovative leaders separate from the pack

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China Pharma & Biotech: 2Q/1H26 earnings preview - amid anti-corruption and VBP, innovative leaders separate from the pack

14 July 2026

China Pharma and Biotech

China Pharma & Biotech: 2Q/1H26 earnings preview - amid anti-

corruption and VBP, innovative leaders separate from the pack

China's healthcare anti-corruption campaign intensified in 2Q26, but the impact has so Rebecca Liang, Ph.D.

+852 2123 2656 far been more targeted and compliance-focused than the broad freeze seen in 2023.

rebecca.liang@bernsteinsg.com Company feedback points to uneven effects across the sector: Hengrui highlighted

temporary disruptions to academic promotion and hospital formulary listing processes,

Ellie Li particularly in lower-tier cities, while Innovent indicated limited impact. We expect near-term

+852 2123 2621

ellie.li@bernsteinsg.com friction in physician engagement and promotional activities to modestly slow prescription

growth, particularly for crowded therapeutic categories and me-too products. However,

longer term, the campaign should favor companies with clinically differentiated

products as prescribing decisions become increasingly driven by efficacy, safety and real-

world outcomes rather than promotional intensity.

VBP Batch 12 was announced in late June covering 65 molecules across several large off-

patent therapeutic categories. Within our coverage, Hengrui and Hansoh are the most

exposed names, although the earnings implications appear manageable at the company

level. For Hengrui, Sevoflurane alone contributes c.7% of sales and could see cumulative

revenue erosion of CNY0.5–1.3 Bn over the next 2-3 years, while Hansoh has exposure

through two mature products. Nevertheless, both companies now derive the majority