It looks like U.S. pharmaceutical companies are looking to China for drugs. U.S. drugmakers are licensing molecules from China for potential new medicines at an accelerating pace, according to new data, betting they can turn upfront payments of as little as $80 million into multibillion-dollar treatments.
Through June, U.S. drugmakers have signed 14 deals potentially worth $18.3 billion to license drugs from China-based companies. That compares with just two deals in the same period in 2024, according to data from GlobalData provided exclusively to Reuters. These agreements focus on developing innovative treatments including cancer therapies, chronic disease medications, and AI-powered drug development.
At the same time, the U.S. is increasingly concerned about its dependence on Chinese pharmaceutical imports. As of 2022, the U.S. imported over $10 billion in pharmaceutical products from China, up from just $2.1 billion in 2020. This growing reliance has triggered efforts to rebuild domestic manufacturing capacity. U.S. policymakers have introduced tariffs, encouraged reshoring of critical drug production, and invested in strengthening the pharmaceutical supply chain to address national security concerns.
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“They are finding very high-quality assets coming out of China and at prices that are much more affordable relative to perhaps the equivalent type of product that they might find in the United States,” said Mizuho analyst Graig Suvannavejh.
China is also reorienting its pharmaceutical strategy. The government is pushing for greater domestic self-sufficiency while encouraging Chinese firms to expand into international markets including the U.S., under the Belt and Road Initiative. Chinese companies are increasingly producing higher-value, branded drugs and competing directly with Western firms.
According to GlobalData, the total cost of licensing agreements including low upfront payments and subsequent larger payouts, averaged $84.8 billion in the U.S., compared with $31.3 billion in China over the past five years.
A licensing agreement grants a company the rights to develop, manufacture, and commercialize another company’s pharmaceutical products or technologies in exchange for future target-based, or “milestone,” payments while mitigating development risks.
“Chinese biotechs are moving up the value chain by the day. They are… challenging their Western peers,” said Macquarie Capital analyst Tony Ren.
The U.S.-China pharmaceutical relationship is ultimately a balancing act—one that blends commercial collaboration with strategic rivalry. While scientific and financial interests drive mutual cooperation in drug development, both countries are working to secure greater independence and control over their pharmaceutical futures. This dynamic will continue to shape global health and trade policy in the years ahead.