Asia Has Become ‘Epicenter’ of Prescription Drug Innovation: McKinsey

There is nothing middling about biopharma innovation in the Middle Kingdom.

A new report from McKinsey found that almost half of the world’s innovative drug pipeline now comes from Asia, with China alone responsible for 29%. Researchers said the region is “outpacing the United States and Europe in pipeline growth, patents and next-gen therapies” and has upended the global biopharma market in just five years.

Going Intercontinental

Not long ago, Asia was considered a biotech manufacturing hub, with the innovation happening elsewhere. That dynamic has shifted, thanks to China, South Korea, Singapore, Japan and India variously employing public investment, venture activity and capital markets. An example is South Korea, which committed $2 billion to a fund for 1,200 innovative projects through 2030. Japan, meanwhile, allows so-called “Sakigake” designations that fast-track important treatments for priority review.

McKinsey said Asia accounted for almost two-thirds of the world’s biotech patent grants in 2024, five times the European share. It was also responsible for a quarter of global out-licensing deals, which occur when a company licenses its IP abroad — like AstraZeneca offering $100 million upfront and up to $1.9 billion in milestone payments for the rights to a clinical-stage drug from China’s Jacobio Pharma last year. China, in particular, has emerged as an innovative and brutally efficient competitor:

• What most differentiates China is R&D velocity, McKinsey said. Drugs move from early discovery to human trials 50% to 70% faster than elsewhere on the planet because work is broken down more efficiently across developers and contract research organizations. Of particular note, China moves two to five times faster than the US and EU at trial recruitment during late development, and its share of global clinical trials at 39% is outpacing both as well.
• Where Asia still trails considerably is in FDA novel-drug approvals, where it represents just 10% of candidates. But McKinsey noted that this may be a lagging indicator, as China’s 2017 accession to the International Council for Harmonisation aligned its regulators with global standards; domestic approval times have already been cut from about four years to one year.

Buy Their Way Out: Staring down a multi-billion dollar patent cliff of their own, US firms are poised to continue a buying spree to keep their pipelines full. Earlier this week, The Wall Street Journal reported Indianapolis-based Eli Lilly is deep in talks to acquire Ventyx Biosciences, which specializes in pills for Crohn’s disease and has a treatment for cardiovascular disease in trials, for $1 billion.