Strategies for Success: How Chinese Pharma Companies Are Going Global
From overseas sales of active pharmaceutical ingredients (APIs) to the global expansion of generic drugs, and further to the globalization of innovative medicines, Chinese pharmaceutical companies are collectively exploring internationalization pathways, with faster overseas expansion, more innovative products, and broader market coverage.
However, it is not easy for domestic pharmaceutical companies to expand overseas. Cases such as Innovent Biologics, Hutchmed, and Vascure Pharmaceuticals indicate that the path to global expansion remains fraught with difficulties, and the journey toward internationalization is long and arduous.
What are the current pain points in the internationalization of China’s pharmaceutical industry? At what stage are innovative drugs and generic drugs in their global expansion? What successful overseas expansion models can serve as references?
On June 23, VBInsight, in partnership with BCG, invited BeiGene, Henlius, and CMS Biotech to host the first online panel of the “Data-Driven Global Expansion” series. Adopting a format that combined report presentations with frontline insights, the session aimed to provide data-backed guidance for global expansion, enabling companies to formulate more informed and strategic approaches.
First row (top), from left to right: Yaozhong Zhang, Assistant to the Global President & Executive Director of Business Operations at BeiGene; Chao Wu, General Manager of VCBeat New Medicine
Second row (bottom), from left to right: Yong Wang, VP of Business Development at CMS Biotech; Qicong Hu, Managing Director and Global Partner at BCG & Core Leader of BCG Healthcare Practice in China; Ping Cao, VP of Business Development at Henlius
"Going global has become a major trend, and the choice of direction is particularly crucial for pharmaceutical companies."
Chinese pharmaceutical companies’ international expansion remains primarily focused on the U.S. and European markets, while Asian markets such as Japan, South Korea, and Southeast Asia are gradually becoming the secondary targets for innovative and transforming pharmaceutical enterprises. Meanwhile, Southeast Asia, South America, and Africa have emerged as the secondary targets for traditional pharmaceutical manufacturers. Faced with a complex array of overseas market options, how should pharmaceutical companies make their strategic choices?
Zhang Yaozhong, Assistant to the Global President & Executive Director of Business Operations at BeiGeneA Comprehensive Analysis of the Global Pharmaceutical Market: “To achieve strength and scale, internationalization is an inevitable path. According to our analysis, the global pharmaceutical market can be broadly divided into six major regions: the United States, Europe, Japan, China, Asia-Pacific, and emerging markets. The U.S. market continues to account for approximately 60% of the global pharmaceutical market by value. This dominance is primarily driven by its robust foundational scientific research, a continuous stream of innovative biopharmaceutical discoveries, the FDA’s rapid review and approval processes along with its recognized fairness, the accessibility afforded by its unique commercial insurance system and Medicare/Medicaid coverage, and a drug pricing mechanism that remains higher than in other regions. Furthermore, marketing approvals granted by the U.S. FDA are widely recognized and serve as a reference basis for regulatory submissions in other countries. This explains why companies typically secure FDA approval first before pursuing marketing authorizations in other nations and launching subsequent global commercialization efforts. The European market accounts for approximately 20% of the global pharmaceutical industry. Its advantage lies in the fact that obtaining marketing authorization from the European Medicines Agency (EMA) enables rapid commercial launch in more than 20 countries, such as Germany, France, Spain, and Italy. However, thereafter, it is necessary to negotiate reimbursement and market access with each individual country to enhance sales volume and accessibility. For BeiGene, since zanubrutinib has already received marketing approvals in 50 countries worldwide, the company is vigorously advancing its commercialization through either self-established teams or distributor models, while continuously seeking an optimized business model.”
Wang Yong, VP of Business Development at CMS BiotechA detailed analysis was conducted on the favorable conditions for entering the Southeast Asian market. “Now is the optimal window for Chinese pharmaceutical companies to expand into Southeast Asia, benefiting from favorable timing, geographic advantages, and strong human connections. First, amid global instability, Southeast Asia is a region where China can exert considerable influence. Second, Southeast Asia and China share extremely close geographical, historical, and cultural ties, and the Chinese diaspora wields significant influence within the Southeast Asian economic sphere.”
Furthermore, Wang Yong analyzed several additional driving factors. In terms of demographics, disease spectrum, and demand, Southeast Asia has a population of approximately 660 million, nearly half that of China, with an aging rate of 6.7%, approaching the WHO’s 7% threshold. From a political and economic perspective, although Southeast Asia historically comprised 11 countries operating independently, regional economic cohesion has gradually strengthened with the development of ASEAN, promoting integrated regional economic growth. This trend indicates that the barrier to entering the Southeast Asian market is lowering. Additionally, as COVID-19 vaccines begin to be distributed across ASEAN countries, Innovent Biologics’ Byvasda®“Having obtained ASEAN certification indicates a shift in ASEAN’s stance toward Chinese pharmaceuticals. Amid these numerous favorable factors, ASEAN is likely to replicate the trajectory China experienced a decade ago, with its entire pharmaceutical market achieving rapid growth.”
Addressing the domestic situation, he added, “In the field of innovative drugs, there is an excessive number of R&D products targeting the same mechanism in China, leading to intense hypercompetition. Following the path of least resistance, entering ASEAN—a largely untapped market—represents a favorable timing. For pure generic drugs, companies that have won bids in China’s centralized procurement possess advantages in cost and scale. When such products are introduced to Southeast Asia, their quality or cost advantages can be clearly demonstrated compared with competitors like Dr. Reddy’s and other Indian pharmaceutical companies. Furthermore, China already has many 505(b)(2) generics approved and registered in Europe and the United States. Entering the Southeast Asian market would basically require no additional clinical trials, offering rapid market entry and cost advantages.”
Hu Qicong, Managing Director and Global Partner at BCG & Core Leader of BCG’s Healthcare Practice in ChinaShared strategies for selecting overseas markets. “The strategy for global expansion depends on two factors. Before going global, enterprises must first assess their financial strength and technological product capabilities. If they are strong, they can aim for the European and American markets; if their capabilities are insufficient, it may be better to settle for developing or less developed countries or regions. In addition, the issue of partners must be considered. If targeting the European and American markets, priority should be given to strong local multinational corporations. In developing countries, local commercial platforms can be chosen, but it is essential to select partners with good performance and reputation, preferably those well-known and thoroughly vetted through due diligence, because the cost of changing partners midway is too high and may lead to an order-of-magnitude decline in product value.”
China’s biopharmaceutical innovators primarily pursue three strategies for global expansion: an organic growth model involving the establishment of in-house overseas sales teams; a “borrowed ship” approach through partnerships with overseas distributors or foreign pharmaceutical companies; and an investment-driven expansion model that rapidly acquires overseas sales networks and teams via joint ventures, mergers, and acquisitions. Regardless of the chosen strategy, successful execution hinges on a reliable team, with the caliber of international talent being critical to the global success of pharmaceutical enterprises. How should Chinese pharmaceutical companies build their international teams?
Zhang YaozhongChallenges in Building Overseas Teams: “Building and managing international teams is a formidable task for emerging Chinese biopharmaceutical companies, presenting several key challenges. First, talent acquisition is difficult. When many biotech firms initially expand overseas to recruit teams, their low brand recognition—unlike century-old industry giants such as Pfizer, Johnson & Johnson, and Novartis—combined with the significant uncertainty surrounding startups’ futures, makes it highly challenging to attract high-quality talent from the outset. Second, governance is complex. Integrating individuals from diverse backgrounds into a cohesive team with shared vision and strong unity is extremely difficult; thus, cultural integration and development are inevitable steps in the internationalization journey of any startup. Third, management poses significant hurdles. Due to varying laws and regulations across different countries, as well as markedly different business practices, identifying a management model that is both locally adaptable and aligned with the company’s core strategic objectives remains a major challenge. Therefore, to successfully build an international team, companies must overcome these pain points by securing suitable top-tier talent, establishing clear governance mechanisms, and fostering strong alignment between leadership and staff, thereby effectively maximizing the benefits derived from their global teams.”
Cao Ping, Vice President of Business Development at HenliusShared his considerations regarding the BD team. “Recruiting BD professionals is indeed challenging, especially those with international capabilities. When I first joined Henlius, the company’s BD team was essentially built from scratch. I adopted an interim strategy by selecting and cultivating talent from various internal teams at Henlius, particularly high-performing members from the R&D and technical departments. The advantage of this approach is that team members already have a deep understanding of the company’s products and R&D strategies, and strongly align with the company’s vision and values. I believe a successful BD professional must be able to build trust; demonstrate diligence, resilience, and solution-oriented thinking; possess the ability to coordinate internally within the company and communicate effectively with external clients, mastering skills such as explanation and negotiation; and maintain strong learning agility to keep pace with the times and stay abreast of the latest industry trends.”
Wang Yong“We believe that achieving localization is essential for successful business operations in Southeast Asia; therefore, we hire local talent to handle local affairs. Our team primarily draws from two sources: one group comes from leading regional enterprises such as Unilab, bringing strong Southeast Asian expertise and deep market insight; the other group hails from multinational corporations operating in Southeast Asia, such as Novartis and Merck & Co., predominantly comprising expatriates from countries like Singapore, who possess advantages in cross-cultural communication. Furthermore, we integrate employees with diverse cultural backgrounds into our management team. This approach enables us to build a diversified team capable of gaining comprehensive local understanding.”
China’s biopharmaceutical industry is gradually entering a period of robust global expansion, yet this journey faces numerous challenges. An effective internationalization strategy is crucial for successful market entry. How should pharmaceutical companies formulate their global expansion strategies, and what factors need to be considered?
Zhang YaozhongTaking BeiGene as an example, references are provided from three aspects: R&D, commercialization, and supply chain. “BeiGene has three major characteristics: First, it is science-based. BeiGene currently has approximately 50 commercialized products and clinical-stage drug candidates, around 50 preclinical research projects, and is conducting over 100 clinical trials in approximately 45 countries worldwide, supported by a R&D and medical affairs team of about 3,200 people. Second, it employs a science-driven commercialization model. Its commercialization team consists of approximately 3,400 people. In addition to commercializing around 16 products in China, it is rapidly building specialized teams overseas to launch its self-developed drug, zanubrutinib. Third, it has a globalized, high-quality supply chain. BeiGene is continuously committed to building its own production capabilities, with large-molecule production in Guangzhou, small-molecule production in Suzhou, and recently launched overseas production bases and clinical R&D centers in New Jersey, USA, forming a global supply chain. Each new Chinese biopharmaceutical startup should tailor its own optimal strategy for global expansion based on its development status, cash position, and strategic planning.”
Cao PingShe shared a global strategy aligned with the company’s mission of “Affordable Innovation.” “To provide affordable innovative biologics to patients in need worldwide, Henlius has established an integrated biopharmaceutical platform encompassing R&D, manufacturing, and commercialization. We have set up global innovation R&D centers in Shanghai and California, USA, and built three production bases in Shanghai to meet global commercial supply demands. In terms of commercialization, we have established our own sales team in China to promote core products, while for overseas markets, we primarily leverage local partners to achieve market coverage. The global partners we select must first appreciate and align with Henlius’s philosophy; furthermore, they must have large-scale sales teams in regions with significant patient needs and a strong track record. For instance, we recently partnered with the multinational pharmaceutical company Organon, licensing out the overseas rights to two of our products.” She emphasized, “It is essential to seek like-minded partners who can offer complementary strengths—partners who not only understand you but also recognize and appreciate your advantages.”
Wang Yong“He stated, ‘Every enterprise expanding overseas must have a comprehensive strategy in place, clearly defining its objectives and estimating the timeline for achieving them, while maintaining patience. Some companies may become envious or impulsive when witnessing large-scale deals; however, not all products are suited for such transactions, nor are they all appropriate for markets in Europe, the United States, and Japan. Therefore, corporate management must thoroughly clarify their strategic direction and develop robust long-term plans.’”
Hu Qicong“He emphasized that before going global, companies must clearly define their overseas expansion strategies based on their actual circumstances. It is essential to remain committed to the strategy and not retreat at the first sign of difficulty. However, we also stress the importance of adjusting approaches through practice to achieve better implementation.”
It has become an inevitable trend for Chinese pharmaceutical companies to expand into overseas markets. Breaking down globalization barriers and enabling more pharmaceutical firms to successfully go global remains a long and arduous journey. Nevertheless, zanubrutinib and cilta-cel have received FDA approval, along with Zercepac®Successfully approved in the EU, BYVASDA®Favorable developments, including approval in Indonesia and Novartis’ acquisition of an option, collaboration, and licensing rights for BeiGene’s ociperlimab with a $300 million upfront payment, have provided a successful model and new direction for the global expansion of China’s pharmaceutical industry.
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