Multinational pharmaceutical companies are increasingly expanding their research and development operations into China, as illustrated by AstraZeneca’s recent commitment to invest $15 billion in the country. This move is part of a broader trend where global firms seek regions that offer more efficient clinical trial processes and faster drug development timelines.
According to a McKinsey report, China has accelerated the process from early discovery to investigational new drug application by 50 to 70%. This progress is attributed to parallelized workflows, a robust contract research organization (CRO) ecosystem, and what McKinsey describes as “a culture of executional intensity.” As a result, China captured 39% of global clinical research activity in 2023, surpassing both the United States and European Union in patient recruitment and speed of development.
Despite this growth, regulatory requirements still mandate that at least 20% of clinical testing for drugs seeking approval from the U.S. Food and Drug Administration (FDA) must occur within the United States. Companies such as Eli Lilly and Innovent have faced setbacks due to insufficient U.S.-based data for FDA submissions. Roche experienced similar issues with its lymphoma therapy Columvi.
The remaining 80% of clinical research can be conducted outside the U.S., creating opportunities for regions like China. Biopharmaceutical companies partnering with Chinese firms have noted operational efficiencies. Robert Plenge, chief research officer at Bristol Myers Squibb, said: “A really interesting aspect of China is we’ll be able to test more programs in early development, so get that clinical proof of concept more efficiently to see what’s working and what’s not.”
China’s biotech sector has evolved rapidly—from providing contract services to developing “me-too” drugs and now producing novel compounds that attract significant licensing deals. For example, Akeso’s PD-1/VEGF bispecific antibody ivonescimab was initially tested in China before being licensed for U.S. trials.
As international collaborations grow, biopharma companies are increasing R&D staffing in China. However, some remain cautious due to potential geopolitical risks related to legislation like the BIOSECURE Act, which seeks to limit reliance on Chinese contractors.
AstraZeneca continues its substantial investments in China across all stages of drug development, including cell therapy and radioligand work. Charles River Labs CEO James Foster commented on the appeal of low-cost Chinese CROs: “If you’re starved for cash and you’re in a rush to get to market and you think that the Chinese CROs can do the work okay, enough to get into the marketplace, I think you’ll do that,” he said. “I think most clients would prefer that the science is spectacular.”
Regulatory differences also influence where companies conduct trials. In China, investigator-initiated trials (IITs) do not require an investigational new drug application (IND), enabling quicker entry into human studies if funding is available. Australia offers similar advantages for Phase I studies—no IND requirement—and provides tax incentives estimated at 43 cents per R&D dollar spent there.
South Korea is advancing its capabilities in antibody-drug conjugates and cell therapies while strengthening its hospital-linked R&D centers and CRO support structures. India is also emerging as a potential future hub for biotech innovation; it already supplies active pharmaceutical ingredients globally and produces generics at scale. Multinational firms are considering expanding their operations there as government policy encourages clinical research growth.
CRISPR Therapeutics CEO Samarth Kulkarni noted ongoing gene editing trials in India aimed at providing affordable treatments: “the region needs more affordable options.” Monica Manotas, CEO of Swiss lab supplier Tecan Group, stated plans for targeted investment as India’s biopharma sector grows.
Singapore aims to serve as an Asian launch pad through efficient trial processes. Meanwhile, Europe seeks to regain ground lost over the past decade; its share of global clinical trials dropped from 22% in 2013 to 12% in 2023 due partly to regulatory complexity and limited access to capital. The European Commission's Biotech Act aims to streamline approvals by reducing authorization timeframes for multinational trials from up to 106 days down to as few as 47 days when no additional information is required.
Concerns persist about reproducibility standards across geographies but experts say rigorous controls can mitigate these issues regardless of location. Plenge commented: “If you have a really good data package from any of those geographies, you should be able to use that information to guide clinical design in other geographies.”
Nonetheless, U.S.-based patient data remains essential for FDA approval—a constraint echoed by John Wu from BCG: “There’s a limit to which you can conduct trials outside of the U.S.… You cannot just satisfy a trial requirement from the U.S., because that would be too expensive, too slow, too competitive.”
As competition intensifies among regions—including China—companies continue balancing efficiency gains abroad with regulatory demands at home.
