Accelerating Innovation in Biomedicine—An Investigation from Shanghai

This year’s “Government Work Report” for the first time included biomedicine as a new pillar industry, with corresponding plans to “promote high-quality development of innovative drugs and medical devices.” In the biomedicine sector, Shanghai has taken the lead with accelerated progress, actively supporting innovation across the entire biopharmaceutical industry chain. The pace of “going global” and “bringing in” is becoming more stable, and innovative drugs and devices from Shanghai are speeding up their global competitiveness. Why has Shanghai become a hub for China’s biopharmaceutical industry? Where are the new growth points in the future?

In the field of innovative drugs, there is the so-called “Double Ten Law”: it typically takes 10 years of R&D and $1 billion in investment for an innovative drug to go from concept to market, with a success rate of less than 10%. Due to the high barriers, “Chinese people developing their own innovative drugs” was once considered nearly impossible.

Now, this wish has become a reality, and many innovative drugs are beginning to be exported overseas. Data from the Shanghai Municipal Science and Technology Commission show that by 2025, Shanghai’s biopharmaceutical industry will surpass 1 trillion yuan in scale for the first time, with a manufacturing output value of nearly 210 billion yuan; its international competitiveness continues to improve, with 48 overseas licensing transactions, a 55% increase year-over-year, totaling $33.76 billion, an 85% increase, ranking among the top nationwide.

A number of well-known pharmaceutical companies are growing and thriving in Shanghai. Along Jiangnan Road in Pudong, Shanghai Zhangjiang Science City, many companies such as Shanghai Junshi Biosciences and Mawi (Shanghai) Biotech are lined up along the street. Industry leaders like Fosun Pharma and Cinda Biopharmaceuticals are deeply cultivating in Xuhui, Minhang, Jiading, and other districts, jointly building Shanghai’s biopharmaceutical industry landscape.

Currently, competition in biopharmaceutical innovation is accelerating across the board. How does Shanghai maintain its position in the top tier of the national industry? Our reporters conducted interviews and investigations.

Building Internal Attraction

Shanghai’s ability to lead in innovation density in the national biopharmaceutical industry stems from patience and wisdom. In the 1990s, China’s pharmaceutical market exhibited a typical “dumbbell” structure: one end was domestic generics, low-priced; the other was imported drugs from abroad, technologically advanced, with little domestic innovation.

At that time, industry consensus emerged: to cultivate innovative products within such a structure, a complete system covering basic research, talent, clinical trials, regulatory review, and industry capital must be established. This was not achievable in a few years but required the patience of a generation.

In 1992, Shanghai announced the establishment of Zhangjiang Hi-Tech Park. By attracting multinational pharmaceutical companies like Roche, Novartis, Pfizer, and AstraZeneca, a quality system, production standards, and clinical development concepts for biopharmaceuticals gradually took shape locally. Top scientists and engineers also moved to Pudong, forming the initial backbone of Shanghai’s biopharmaceutical industry.

This involved both attracting foreign investment and leveraging it, as well as cultivating local strength for future opportunities. From the Shanghai Institute of Materia Medica of the Chinese Academy of Sciences and the Shanghai Synchrotron Radiation Facility to the National Protein Science Facility (Shanghai) and the National Major Scientific Infrastructure for Translational Medicine (Shanghai), Shanghai has built one of the most solid original innovation platforms domestically. By mid-2025, Shanghai will have 64 academicians in the biopharmaceutical field, over 320,000 industry practitioners, 37 municipal tertiary hospitals, 6 national clinical research centers, and 70 clinical trial institutions. The density of clinical resources and scientific research strength ranks first nationwide.

JPMorgan Chase Greater China Healthcare Industry Research Director Huang Yang commented, “The achievements of Shanghai’s biopharmaceutical industry today are the result of continuous investment, accumulation, and iteration.” Huang said that sustained policy support and basic scientific research investment will attract global talent to Shanghai, which in turn will attract capital investment, forming a positive cycle of innovation. “With a better ecological environment, the industry will naturally grow.”

The coupling of industry elements also requires wisdom. During the development of the biopharmaceutical industry, Shanghai has continuously innovated policies to promote resource flow, helping innovations move from ideas to products, and optimizing regulation to improve conversion efficiency and reduce costs. Chen Li, founder and CEO of Hualing Medicine, stated, “China used to be a major producer of generics. In recent years, domestic innovative drugs have increased, which has raised new requirements for regulation. Shanghai has accelerated industry development through policy optimization and mechanism innovation, enhancing innovation value and benefiting the public.”

The case of He Huang Medicine is quite representative. In 2005, Su Weiguo, then head of R&D at He Huang Medicine, sketched a small molecule structure on a napkin in a café—this was the prototype of the later globally marketed colorectal cancer drug Fuzquixan. However, advancing the trial faced huge challenges: the molecule had to be produced first, then validated through clinical trials. At that time, He Huang was a small company with limited resources, unable to build capacity for a “possibility.”

In 2016, Shanghai began pilot testing the Drug Marketing Authorization Holder (MAH) system, one of the earliest regions to do so nationwide. Under this system, drug developers could outsource manufacturing to qualified companies, allowing for faster development. Fuzquixan became one of the first pilot projects under Shanghai’s MAH system. Cui Yiming, Vice President of He Huang Medicine, said, “The MAH system allowed Fuzquixan to be approved at least three years earlier.”

More than 40 drugs and over 30 contract manufacturing organizations benefited from this in Shanghai.

In 2024, the “Several Opinions on Supporting the Whole-Chain Innovation and Development of the Biopharmaceutical Industry” was released by Shanghai, addressing the common challenge of “getting innovative drugs into hospitals.” The policy states that within one month of national insurance drug updates and the release of “new and excellent” drugs and devices, medical institutions in Shanghai should equip and use these innovations according to clinical needs and hospital characteristics; hospitals’ innovation responsibilities will be strengthened, and they cannot restrict the entry of innovative drugs and devices based on usage volume or proportion of drug costs. Thanks to this policy, the efficiency of hospital admissions for innovative drugs has improved, boosting sales and expanding the influence of Chinese innovative drugs.

The “flywheel effect” of the industry is gradually forming, and Shanghai’s biopharmaceutical industry is becoming more attractive. In 2000, Hengrui Medicine, which started in Lianyungang, Jiangsu, was listed on the Shanghai Stock Exchange. Most of the funds raised were invested in the Shanghai Hengrui R&D Center, marking a significant step from generics to innovative drugs. “The establishment of the R&D center propelled the company onto the path of innovation,” said He Feng, Vice President of Hengrui and CEO of the Shanghai Hengrui R&D Center. As of mid-2025, innovative drugs accounted for more than half of the company’s drug sales revenue.

Building an Outbound Innovation Hub

“Shanghai is one of the cities with the highest concentration of the biopharmaceutical industry in the country, with core parks like Zhangjiang Pharma Valley and the New Hongqiao International Medical Center, forming a complete chain from basic research and clinical trials to results transformation. The high concentration of top-tier hospitals and national clinical trial centers provides solid clinical resources for new drug development,” said Zhao Lei, General Manager of Cinda Biologics Shanghai R&D Center.

As a hub for China’s biopharmaceutical industry, Shanghai is accelerating its rise as a global gateway for Chinese innovative drugs.

Cinda Biologics, founded in Suzhou, Jiangsu, decided in 2020 to establish its global R&D center in the Shanghai Hongqiao Qianwan Biopharmaceutical Industry Park. Walking into the park, a sense of technology and youthfulness hits you. “This R&D center is one of the largest biopharmaceutical R&D facilities in China, equipped with internationally advanced comprehensive facilities, including a 24/7 R&D building,” Zhao Lei said. It undertakes Cinda’s most cutting-edge global R&D tasks.

Hengrui Medicine is also stepping up its international expansion. Since 2020, Hengrui has completed 15 overseas licensing deals, with potential total value exceeding $27 billion. In October 2025, Hengrui’s second R&D center in Shanghai—the Shanghai Innovation R&D Center—was officially launched, featuring top-tier molecular biology and cell biology laboratories, as well as gene and cell therapy R&D and pilot production labs. Chairman Sun Piaoyang said, “This is an important step in our globalization strategy. In the future, we will rely on the innovative ecosystem of Zhangjiang Pharma Valley to accelerate the landing of high-quality projects.”

Several products approved overseas are also headquartered in Shanghai. Focusing on antibody-drug conjugates (ADCs), Baihe Tianheng Pharmaceutical, which has partnered with BMS, has gained recognition. Although not in Shanghai, Chairman Zhu Yizheng is planning to build a factory there: “How is Shanghai’s business environment? The fact that so many innovative drug companies choose to settle here says a lot.”

The agglomeration effect has enhanced Shanghai’s reputation in global innovative drugs. Huang Yang often liaises with international investors and notes that many come to Shanghai first when exploring Chinese innovative drugs. “Here, they can quickly and comprehensively understand China’s biopharmaceutical industry and easily communicate and collaborate with more companies.”

Not only Chinese companies are expanding abroad, but global giants are also moving closer to Shanghai. Data from the Shanghai Municipal Science and Technology Commission show that by the end of 2024, 19 of the top 20 global pharmaceutical companies and 19 of the top 20 medical device companies have established headquarters or R&D centers in Shanghai.

Fostering a Collaborative Innovation Ecosystem

The number of innovative drugs and devices approved for market is an important indicator of industry innovation. In October 2025, a set of figures from the Shanghai International Biopharmaceutical Industry Week exhibition drew attention: from 2021 to October 2025, 31 domestically approved Class 1 innovative drugs were approved in Shanghai, accounting for 17% nationwide; in the field of cell and gene therapy, 4 products were approved, accounting for 57% nationwide. Additionally, 47 domestic third-class innovative medical devices were approved, representing 20% of the national total. These numbers indicate that Shanghai leads the country in the quality of biopharmaceutical innovation.

Looking ahead to the next decade, where are the new growth points for Shanghai’s biopharmaceutical industry? The answer remains: in R&D, in innovation, and in long-term incubation.

Zhu Yizheng believes that biopharmaceutical innovation has a long cycle. “Today’s breakthroughs are backed by decades of data accumulation and scientific research.” The more original the breakthrough, the more time it takes to mature. “Only by focusing on doing the right things patiently can true innovation be achieved.” This industry characteristic also means that Shanghai must not only encourage innovation but also allow companies to innovate slowly. To support this, Shanghai is building a capital system aligned with patient R&D.

In 2024, a $2.25 billion Shanghai Biopharmaceutical Industry Fund was established. At the Shanghai International Biopharmaceutical Industry Week in 2025, Lu Wen, Vice President of Shanghai Guotou, stated that by October 2025, the fund, along with future industry funds and state-owned capital funds, had invested about 6.6 billion yuan in biopharmaceutical sub-funds, leveraging approximately 5.5 times. “We focus on investing in innovative drug and device supply chains, brain-computer interfaces, synthetic biology, and other frontier fields, with over 40 projects in the pipeline for 2025.”

Liu Dawei, Executive Director of Shangshi Capital and President of Shanghai Biopharmaceutical Fund, emphasized patience further. “We aim to accompany top scientists along the entire process, linking transformation funds, growth funds, and industry M&A funds into a complete chain.” Liu said that further integrating research institutes, top-tier hospitals, leading industry groups, capital institutions, and entrepreneurs is crucial to building a healthy ecosystem, which is a key guarantee for the continuous landing of innovative drugs.

Beyond pioneering “from 0 to 1” original innovation, more efforts are being directed toward “from 1 to 10” iterative and scaled innovation. Shen Bo, Executive Director and President of Shanghai Pharmaceuticals Holding Co., Ltd., stated at the 8th Pujiang Medical and Health Industry Innovation Development Summit that Shanghai Pharma is promoting the construction of first-class biopharmaceutical innovation incubators and result commercialization platforms, providing scenarios, resources, and markets through multi-party collaboration. In September 2024, Shanghai Pharma launched the Shanghai Biopharmaceutical Frontier Industry Innovation Center, attracting multiple international pharmaceutical companies, national life sciences institutes, and tech startups, becoming an important regional innovation hub.

The challenge of payment for innovative drugs is also being addressed. Previously, seven departments including the Shanghai Regulatory Bureau of the National Financial Supervision and Administration and the Shanghai Medical Insurance Bureau issued the “Measures for Further Improving the Multi-Channel Payment Mechanism to Support the Development of Innovative Drugs and Devices in Shanghai”; subsequently, the “Measures for Promoting High-Quality Development of Commercial Health Insurance to Support Biopharmaceutical Industry Innovation” were also issued. These policies strengthen the synergy between basic medical insurance and commercial insurance in payment mechanisms, data sharing, service models, and regulatory innovation, systematically building a dual empowerment mechanism for innovation. The consistent logic is that supporting innovation requires multiple payment mechanisms.

Shanghai Magxin Health Technology Group Co., Ltd. has learned that the company is developing a one-stop multi-channel payment solution. Its “One-Click Direct Payment” project now covers over 100 innovative drugs, integrating medical insurance, commercial insurance, civil aid, charitable donations, and financial installment channels. Chief Innovation Officer Feng Hao said, “The ‘last mile’ of innovative drugs is not just about who pays, but how to make the payment smooth. Payment capability, drug circulation, and service loops are the core of a multi-channel payment ecosystem.”

Currently, policies supporting the development of Shanghai’s biopharmaceutical industry are being intensively introduced. In September 2025, the “Shanghai Action Plan for Promoting the Whole-Chain Development of High-End Medical Devices” was officially released. It aims to systematically address industry bottlenecks through innovation, reform, and empowerment, accelerating the creation of a globally influential high-end medical device industry hub. Moving forward, Shanghai will focus on clinical needs, establishing special guidelines, building high-level R&D platforms, and promoting standard-setting to create a full-chain innovation system from basic research to industry clustering. Additionally, policies also support biopharmaceutical companies’ international expansion. The “Shanghai Action Plan to Enhance the International Competitiveness of Biopharmaceutical Enterprises (2024–2027)” explicitly states the goal of cultivating 2 to 3 Chinese innovative drug companies with over 10 billion yuan in overseas sales by 2027.

A series of strong policies are propelling Shanghai’s biopharmaceutical industry toward new blue oceans. “As China’s biopharmaceutical industry shifts from speed to quality, Shanghai has taken the lead with its approach: leveraging capital and policies to stabilize and continuously supply resources across the industry chain. Here, biopharmaceutical innovation is not a point breakthrough but a full-chain acceleration; industry development is not scattered but systemically focused; growth is not short-term but long-term,” said Luo Dajin, Director of the Shanghai Science and Technology Commission.