Letter from Dr Goh Lim Thye, senior lecturer, Department of Economics, Faculty of Business and Economics, Universiti Malaya
posted mixed earnings in China last year, with some firms warning that 2026 will be another tough year as Beijing pushes for affordable healthcare through price bargains. Multinational corporations with innovative drug pipelines and the ability to quickly address unmet medical needs were expected to outperform rivals relying on mature and off-patent products this year, according to Bruce Liu, senior partner at global consulting firm Simon-Kucher.
His comments come as Beijing sharpens its focus on biotech. At last month’s annual legislative meetings, the government named biomedicine as a new engine of economic growth, along with – the state insurance scheme that swaps deep discounts for big volume – was “typically positive for innovative therapies”, said Liu. While companies had to accept significant price reductions, the expanded market volume “unlocked by listing more than makes up for the cut”, he added. for mature off-patent products, under which the government buys drugs in bulk for public hospitals, had put MNCs under intense price and competitive pressure, according to Liu. “The companies lose their pricing premium when bidding,” he said, adding that MNCs with older portfolios now had to explore market segments beyond VoBP, which was “not easy but still possible”. AstraZeneca, for example, saw its China business grow 4 per cent year on year to about US$6.4 billion in 2025, accounting for 11 per cent of its global sales, according to its annual report published in February. The growth was led by cancer medicines, offsetting discounts for the diabetes drug Farxiga under VoBP. The British-Swedish MNC also faces investigations in China over alleged illegal drug imports and evasion of import taxes linked to some of its cancer drugs, as well as possible breaches of patient data rules. The average price cuts in the latest round of VoBP exceeded 70 per cent for 55 drugs, while 68 products were excluded, according to Simon-Kucher. Sanofi reported a 2 per cent year-on-year increase in revenue to €2.6 billion in China in 2025. The French company’s total sales reached €43.6 billion last year. Eli Lilly booked full-year revenue of US$1.9 billion from China, an 18 per cent year-on-year increase, out of total global sales of US$65.1 billion. The US company warned that entering the NRDL for its blockbuster diabetes drug Mounjaro would be one of several factors dragging down its global pricing into the “low to mid-teens” in 2026. Roche’s pharmaceutical sales in China grew 10 per cent in 2025, outpacing its 7 per cent global sales increase, driven by its breast-cancer injection Phesgo, which was included in the country’s reimbursement list. The Swiss firm’s overall sales in 2025 stood at 61.52 billion Swiss francs . “Given that we anticipate diminished but continuing headwinds in China in 2026, we would set our ambition for 2026 at mid-single digits” for Roche’s global diagnostics division, CEO Matt Sause told analysts on the company’s earnings call in October. Meanwhile, Merck’s sales of its HPV vaccine Gardasil in China tumbled to US$200 million in 2025 from about US$3.5 billion in 2024, amid escalating competition from local suppliers. Excluding the slump in Gardasil, the German company’s worldwide revenue would have grown 7 per cent instead of 1 per cent. The blockbuster cancer drug Keytruda continues to be its growth engine.US President Donald Trump on Thursday imposed a 100 per cent tariff on patented pharmaceutical products and ingredients under the national security provisions of the Trade Expansion Act, with the levies taking effect within 120 to 180 days. Companies that agree to manufacture in the US and accept most favoured nation pricing deals with Washington can reduce the tariff to zero. -- SOUTH CHINA MORNING POST China authorities probe ‘national-level bullying’ of diving icon Quan Hongchan amid toxic fan culture 'I will get better' - Cambodia's 72-year-old king says he has prostate cancer and is getting treatment in ChinaAsian C'ships setback raises concerns over Malaysia’s readiness for Thomas CupBrunei population reaches 458,600 in 2025, at a growth rate of 0.7 per centPakistan PM meets US VP Vance as peace talks 'commence' between Iran and US
Global Pharmaceutical Companies Innovative Drug Pipelines Beijing Affordable Healthcare National Reimbursement Drug List Volume-Based Procurement Scheme Astrazeneca China Sales Cancer Medicines Growth Eli Lilly Revenue Increase Roche Pharmaceutical Sales Merck HPV Vaccine Competition
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