Because China's position in your sequence isn't really about size, speed, or capability. It's about value capture — and on value capture, China operates by different rules than any other major market.
Get this wrong, and you've spent twelve to eighteen months building access in a market that constrains the value your asset can return. Get it right, and China becomes one of the most leveraged decisions in your launch plan.
This post is about how to think about it.
What China is, and what it isn't
China is unambiguously a discovery, development, and execution engine of global significance. By 2025, roughly 40–45% of the global innovative biopharma pipeline originated in Asia, with China contributing the largest share of early-stage assets. Clinical trial initiation rates there are among the highest in the world, supported by dense CRO ecosystems, large patient populations, and regulatory pathways that have compressed timelines materially over the past five years.
What China isn't, is a market where you capture commercial value at the rate your asset can capture value elsewhere. Through national reimbursement negotiations and volume-based procurement, drug prices in China are routinely reduced by 50–60% or more in exchange for guaranteed scale. This is policy, not negotiation. The pricing environment is institutionalised; it is not a target to be lobbied against, hedged, or routed around.
So we have a structural paradox at the heart of any China decision in a biotech sequence:
China accelerates innovation faster than it rewards it financially.
This isn't a criticism of China's system. It's a feature of it — designed to expand access to medicines across a large population at controlled cost. But it does mean that any company sequencing China alongside the US, Europe, or Japan needs to be honest about what the market is being used for at each point in the lifecycle.
Three positions, three different jobs
In the launch sequences we build, China rarely belongs in the middle. It belongs either early or late, and the two positions do entirely different jobs.
Position 1: China early, as a validation and signal-generation engine.
When clinical proof is the bottleneck — typically for first-in-class assets, complex modalities, or rare indications where Western trial enrolment is slow — China can compress development by twelve to twenty-four months. The asset gets human data faster. The manufacturing process gets stress-tested at scale earlier. The signal-to-noise ratio improves. By the time you submit to the FDA or EMA, you have evidence packages that would have taken substantially longer to generate elsewhere.
In this position, China isn't a value-capture market. It's a validation market. The economic return comes downstream; in the Western markets you sequence after. The role of the China component is to make the Western submissions stronger, faster, and cheaper to support.
Position 2: China late, as a scale and access market after pricing precedent is set.
The alternative position is the inverse: launch in markets where you can establish pricing precedent first (typically US and select European markets), then sequence China once your value narrative is anchored to those precedents. By this point, China's volume-based procurement compression is still real, but it operates against a global pricing reference rather than setting one. Your value capture has already happened elsewhere; China expands patient access on terms the global pricing strategy can absorb.
This position works particularly well for assets in chronic, large-population disease areas where China's scale is most attractive — GLP-1s being the obvious recent example, but the logic extends to other chronic-disease franchises with sustained demand.
Position 3: China in the middle (the position we usually argue against).
This is the default position most launch plans drift into. It's also the position with the worst risk-reward profile. Here's why.
Place China after your first market but before your second wave of Western expansion, and you face the worst of both jobs. You haven't yet anchored your global pricing narrative in markets where premium pricing is achievable, so China's pricing compression sets a reference that competitors and downstream HTA bodies can cite against you. But you also haven't fully leveraged China's validation engine, because much of your evidence package is already locked in from the first market submission. You get the constraints of both positions without the leverage of either.
Most teams arrive at the middle position by accident, not by argument. China comes into the sequence "around the same time as Japan" or "after the EU but before the GCC" because that's the order partners propose, or because the corporate development team has been talking to a China BD lead longer than to anyone else. The geographic logic feels rational. The value logic isn't.
The four questions to answer before you place China
Before you commit China to a position in your launch sequence, work through these four questions. If your team can't answer all four with conviction, the sequence isn't ready to lock.
1. What is China doing for this asset's value capture?
If the answer is "expanding patient access at the scale our manufacturing can support" — that's a late-position argument. If the answer is "compressing our development timeline by generating early human data" — that's an early-position argument. If the answer is "we have a China partner who wants to move now and we need to figure out how to fit them in" — that's not a sequencing argument at all, that's a relationship argument, and it's the most common reason China gets misplaced.
2. What pricing reference are we comfortable establishing here?
Any pricing you accept in China becomes part of the global reference chain. Procurement bodies, payers, and HTA agencies in other markets read China outcomes. If your global pricing strategy depends on premium positioning, the order in which you face Chinese price compression matters — face it before your premium positioning is anchored elsewhere, and you'll spend the rest of the launch defending against the reference.
3. Can our manufacturing and supply chain support China-scale demand at the point we plan to enter?
China's volume-based procurement is essentially a scale bet — the market trades price for guaranteed volume. If you cannot supply that volume reliably, the negotiated price still applies but the volume doesn't materialise, and you've absorbed the pricing compression without the offsetting scale. The decision about when to enter China is partly a decision about when your supply chain can actually deliver against it.
4. What is our regulatory liability exposure on China-originated data, partnerships, or manufacturing?
This is the question most often missed. Under China's Drug Administration Law, the Marketing Authorization Holder bears end-to-end responsibility for an asset's regulatory history — and that history travels with the asset through licensing, partnership, and sponsor changes. Clinical data generated in China, manufacturing processes validated in China, trial conduct overseen in China — all of it becomes part of your global regulatory record. If your asset is partially China-originated, due diligence on the regulatory history is not optional. As witnessed, some Western firms acquire China-originated assets only to discover, during global regulatory review, that data integrity issues from years earlier required substantial remediation work that wasn't priced into the deal.
Where this leads
China is not the question of whether to enter. For most biotechs with global ambition, China will be in the sequence somewhere. The question is what role it plays, and which markets it sequences against.
A China-early sequence treats the market as infrastructure for the rest of the launch. The economic return is captured elsewhere; China's contribution is speed, evidence, and validation.
A China-late sequence treats the market as scale on top of an established global value narrative. The economic return is anchored before China's pricing compression applies; China's contribution is reach.
A China-middle sequence usually means no one made the call. It accumulates the constraints of both positions without the leverage of either.
The first question we work through with clients planning a multi-market launch is rarely "should we enter China?" It's almost always "what is China for, given the rest of our sequence?" That question is harder than it looks, and answering it well is one of the highest-leverage decisions in a global launch plan.
If you're working through this question for an asset on an 18-month launch horizon, the Sequencing Assessment is the structured way to answer it.
References
- IQVIA Institute, Global Trends in R&D 2025
- Nature, China's evolving role in global biopharma innovation (2025)
- McKinsey, The emerging epicenter: Asia's role in biopharma's future
- Arnold & Porter, Compliance with China's MAH framework (2023)