China nears US in drug innovation with a potential window ahead for Hong Kong: ING Asia Pharmaceuticals Report 2026

Hong Kong, 15 June 2026 – ING has released its Opens in a new tabAsia Pharmaceuticals Report 2026, mapping out the region’s shift from a manufacturing base for generics and active pharmaceutical ingredients to an increasingly important source of global drug innovation. With China nearing the United States in first global approvals, the report also examines the implications for global pharma and highlights potential opportunities against a backdrop of heightened geopolitical complexity.

Asia: from pharma factory to global innovation engine

While Asia’s pharmaceutical sector has long served as the world’s manufacturing backbone for generics, active pharmaceutical ingredients and vaccines, ING’s latest Asia Pharmaceuticals Report reveals that the region has gradually emerged as a genuine innovation engine, originating close to half of all innovative molecules in global pipelines and driving roughly 90% of worldwide growth in new drug candidates.

ING also projects that the region would overtake Europe by 2027 to become the world’s second-largest pharma market after North America, and that Asia Pacific would generate the vast majority of the expansion as global sales reach US$2.4 trillion by 2030.

Countries highlights:

• China: Rapidly became the region's innovation powerhouse, accounting for an estimated 33% of all innovative molecules in global pipelines, up from 4% in 2014
• South Korea: Over 1,300 drug candidates discovered in three years, equalling approximately 10% of the global total, making it Asia's second innovation engine
• India: Remained the world's generics leader, supplying 20% of global generic medicines and filing more than 60% of all US ANDA submissions, with a 9% CAGR forecast driven by the patent cliff
• Japan: Historically innovative market increasingly constrained by pricing pressure and slow access. Only 50% of new global medicines reached patients, mirroring the challenges faced by Europe

“Asia’s role is expanding from supplying the world to shaping what the world takes,” said Diederik Stadig, ING’s senior economist for Healthcare and Technology. “However, the path won't be linear across the region as it depends on how quickly each local ecosystem converts scientific momentum into globally competitive products, and on how supply chains and regulation hold up under tariff and security pressures, separating lasting change from passing momentum.”

The next Pfizer will be Chinese

China's transformation from low-cost supplier to global innovation leader did not happen by market forces alone, but through a sustained policy push. Over the past decade, China accelerated drug approvals, accepted foreign clinical data, introduced R&D tax incentives and channelled state-backed capital into biotech clusters such as Shanghai's Zhangjiang Science City and Suzhou's BioBay. These measures potentially helped turn a domestic generics base into an ecosystem that captured 75% of all venture capital and private equity flowing into Asia Pacific biotech, cementing the country's position as the region's innovation capital. In particular, China surpassed Europe in the share of global clinical trials started, and surged closer to the United States in first global approvals of innovative drugs, rising from roughly 2% in 2015 to around 39% in 2024, compared to around 41% for the US.

Behind this momentum, the report points to regulatory reforms that cleared approval backlogs and created accelerated pathways for innovative medicines, deep investment in fundamental research and a growing scientific talent pool, and China's ability to leverage economies of scale. These factors drove a surge in outlicensing deals (wherein a company that owns a drug asset grants another company the rights to develop, manufacture and/or commercialise that drug) between Chinese and Western biotech and pharma companies, as multinationals increasingly looked to China to refill pipelines ahead of major patent cliffs. This momentum underpinned the report’s prediction that the “next Pfizer” would likely emerge from China, rooted in the country’s deepening strengths across oncology, ADCs, bispecific antibodies, and cell and gene therapies.

"The question is no longer whether Chinese pharma companies will reach global scale, but when and whether they will do so without relying on Western partners. This makes a clear China strategy increasingly important for every boardroom," said Stephen Farrelly, ING's global lead for Pharma & Healthcare.

"While geopolitical scrutiny, including measures like the BIOSECURE Act, is unlikely to halt Western engagement with Chinese innovation, it could make cross-border partnerships more complex, selective and politically sensitive.  Ultimately, companies that act early and remain clear-eyed about the geopolitical landscape are most likely to capture the upside.”

Against that backdrop, Michelle Kong, ING’s head of Sectors for APAC, highlighted Hong Kong as an increasingly vital connector for the region's pharma innovation amid macroeconomic volatility.

“The Greater Bay Area is no longer just an emerging corridor but an established platform connecting China’s biotech innovation with global capital and clinical development. Anchored by Hong Kong’s deep capital markets and robust legal framework, this ecosystem is now entering its next phase—enabling cross-border partnerships, licensing, and the global expansion of Chinese biotech. With decades of on-the-ground experience, ING supports clients in navigating this increasingly complex and selective environment as China’s innovation becomes more deeply embedded in global pharma pipelines.”