Key Points:
Big Chinese pharma players are shelving plans or rethinking amid rising U.S.-China trade tensions.
Uncertainty around supply chains, tariff risks, and pressures of localization are derailing medicine development and increasing cost of doing business.
Key Background :
Escalating trade tensions between America and China are unprecedentedly upending China's pharma and biotech industries. Top players such as WuXi Biologics, and Innovent Biologics now feel forced to re-think their R&D game. They are re-designing programs, piling up crucial materials, and using domestic alternatives for raw materials and clinical trials—desperate to stay ahead of the impact of mercurial American trade policies.
Chinese pharma firms have previously depended on US imports like reagents, cell culture media, and research and development-critical laboratory samples. China imported over $1.5 billion of the latter from the US alone in 2024. Recently imposed or threatened tariffs—some rising as high as 125% prior to recent revisions—have made such imports prohibitively costly and dangerous, however. Therefore, several drug development programs, including hepatitis B, are delayed or abandoned since companies are finding it difficult to find alternatives found in the nation.
This shift is spurring a wave of interest in domestically sourced research materials. At least 17 companies have purchased heavy stocks of Chinese-made cell culture media to prevent foreign reliance on the supplies. Industry officials across the sector warn that foreign input dependence in such a charged environment threatens to destroy life-saving therapies as well as emerging innovations, as logistics challenges and price volatilities kindle a precarious platform for international supply chains.
Operational impacts are already being realized. Chinese businesses are postponing project start-ups, and others are rejecting new orders due to delayed deliveries, with imported inputs taking two to four months to reach their destination. WuXi Biologics ordered historic-sized volumes from their existing vendors, and Innovent and BeOne Medicines are already beginning to prepare for clinical trials in the United States in a bid to prevent future trade interruptions—but this would greatly drive up the cost of projects.
While recent negotiations have loosened up some policies, such as the lifting of restrictions on exporting rare earths and tentative ceasefires in trade, the future is uncertain. In the near lack of clear long-term policy guidelines, pharmaceutical firms are operating in a volatile and unstable setting, balancing geopolitics and the imperative for innovation.