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AstraZeneca’s chief executive returned from a recent trip to China exuberant about an “explosion” of biotech companies in the country and the potential for his business to deliver drugs discovered there to the world.

Pascal Soriot said the market was “completely open” for pharma investment. “It’s hard to not be impressed by the progress that has been made in China over the last few years,” he added on a press call in April.

While the G7 has warned of the threat of “economic coercion” from China and the US is scrutinising Chinese investment in its biotech sector, AstraZeneca is focused on capitalising on its position in China as the largest overseas pharmaceutical company by sales. 

“When you are a global company like AstraZeneca you have always to cope with geopolitical risk and you have to try to manage that without getting too involved,” Michel Demaré, the company’s new chair, told the Financial Times. As long as there were no legal or sanctions issues, he added, “you just try to take care of your patients and try to reach the most patients you can”.

Many drugmakers are tempted by China’s large, ageing population, which is increasingly affected by chronic diseases partly caused by smoking, pollution and more westernised diets. While vaccine nationalism meant China spurned foreign Covid-19 vaccines in favour of its own less effective jabs, it is open to other innovative drugs.

AstraZeneca believes the opportunity lies not just in Chinese patients, but also in the country’s scientists. “The innovation power has changed,” said Demaré. “It is no more ‘copy, paste’. They really have the power to innovate and put all the money in. There’s a lot of start-ups and we are a part of that.”

The Anglo-Swedish drugmaker last month signed a partnership worth up to $600mn with Shanghai-based LaNova Medicines for the global licence for a potential cancer drug, the latest in a series of deals in oncology and cell therapy. Unusually, AstraZeneca China even has a collaboration agreement to sell a traditional Chinese medicine that aims to lower cholesterol. 

Foreign drugmakers tend to see partnerships as safer than acquisitions in China because of concerns about political risk and, historically, intellectual property theft. But Soriot said in April that the company had “no limitation” on buying Chinese businesses. 

When asked about potential objections from Washington, he quoted a recent speech by US Treasury secretary Janet Yellen in which she insisted that the US did not intend to “decouple” from China.

“There are industries where there are more tensions, of course, but it doesn’t apply to our own pharmaceutical industry,” he said. 

Nevertheless, with western companies still facing numerous barriers to doing business in China, cracking the market requires political skill.

When AstraZeneca recently celebrated its 30th anniversary in the country, global executive vice-president Leon Wang pledged that the drugmaker would strive to be a patriotic company that “loves the Communist party”, according to Reuters. AstraZeneca declined to comment on Wang’s statement.


Soriot has transformed the company since he took over 10 years ago, investing in research and development that has created breakthrough cancer drugs. After seeing off a bid from Pfizer in 2014, AstraZeneca’s shares have risen more than 100 per cent in the past five years and its market capitalisation recently passed that of its US rival. 

The company’s strategy of building its presence in China by forming relationships with regional governments beyond Beijing, Shanghai and the biotech hub of Suzhou, gives it another advantage.

“Typically the market looks at drug companies by key franchises, like an individual drug or therapeutic area,” said Dani Saurymper, portfolio manager at AstraZeneca investor Pacific Asset Management. “So it is a plank of growth people haven’t typically thought of: what is the geographic revenue potential?”

Demaré said the group was “very into some provinces where there is not even a foreign player other than us”.

Wang, meanwhile, has been building AstraZeneca’s business in China since he arrived in 2013. “Leon is open to everything,” said Bruce Liu, who leads the life sciences division for China at consultancy Simon-Kucher & Partners. “He has been very innovative.”

With a close eye on the demands of China’s developing healthcare system, Wang has overseen the building of thousands of centres within hospitals to deliver AstraZeneca’s Pulmicort, a drug for asthma and chronic obstructive pulmonary disease. The latter condition affects more than 100mn Chinese. 

Paul O’Brien, a China market entry strategist, said the drugmaker’s partnerships and capital investments were appealing to the government, and had helped the company “blur some of the boundaries” between being seen as a purely foreign entrant and “one with significant skin in the China market”.


As China began to increase its focus on innovation in drugmaking over the past five years, pharmaceutical companies dependent on selling off-patent generic medicines had to scramble to change their business models. The country made significant reforms to give patients access to new drugs, rather than cheap generics.

Helen Chen, head of LEK Consulting’s healthcare practice in Shanghai, said there had been a “really big shift in mentality” in the industry since 2017, as Beijing sped up the process of giving regulatory approval and insurance coverage. The list of nationally covered medicines, which once took four years or more to get on to, is now reviewed every year. 

But while the Chinese government pleased the industry by speeding up the process, it played hardball on price. 

Demaré said AstraZeneca had experienced a “difficult period” in China because of the government’s pressure on prices and a hit to demand during the strict Covid-19 lockdowns. 

However, he pointed to the company’s return to double-digit growth in the country. In the first quarter of 2023, sales in China, excluding those related to Covid-19 vaccines and treatments, rose 11 per cent year on year at constant exchange rates to $1.6bn, although growth is expected to slow to a low single-digit percentage this year.

Liu, of Simon-Kucher, said AstraZeneca had not been “vigilant enough” in the past two years on China’s policies to encourage generic competition, and had not introduced enough innovative drugs in response. 

But the breadth of the company’s local experience in China was helping with the transition, he added, noting that AstraZeneca China was treated with “freedom, latitude and trust” by the drugmaker’s global headquarters. 

AstraZeneca is also having some success with its innovative drugs. Sales of Tagrisso, a lung cancer treatment, increased by 17 per cent year on year in emerging markets to $444mn in the first quarter, three-quarters of which was likely to have been in China, according to Simon Baker, an analyst at Redburn. “It is not far off being a blockbuster in China alone,” he said, an industry term for a drug with sales of $1bn a year or more.


Reforms such as more relaxed rules on outsourcing manufacturing have also made it easier for Chinese biotech companies to compete globally, while changes to Hong Kong’s listing rules have opened the market to biotechs without revenue. With long development times, biotech groups sometimes require funding for a decade before their first sale.

Soriot believes AstraZeneca can be a partner of choice for Chinese biotechs, which he said were discovering new products and technologies that would “shape the future of medicine”. He planned to use AstraZeneca’s presence in the country to “tap into this innovation and help those companies develop and commercialise their products globally”. 

Wang has already spearheaded a partnership with state-backed investment bank China International Capital Corporation to create a $1bn fund to invest in local start-ups.

LEK Consulting’s Chen believed that acquisitions would be politically possible for AstraZeneca, as long as the group did not target a “major Chinese champion of industry”, or gene therapy companies, which were considered nationally strategic. 

Liu said acquisitions were “in theory not a bad idea”, with pharma companies able to negotiate bargain prices because many biotechs were “cash starved”. But he added that they were not common because of potential issues integrating assets and other geopolitical and legal challenges, particularly since relations between the west and China had deteriorated. 

Lindsay Gorman, senior fellow for Emerging Technologies at the Alliance for Securing Democracy think-tank, said statements of patriotism and loyalty to the Communist Party were pragmatic in this context. 

“The obsequiousness is definitely not subtle, but AstraZeneca is saying the quiet part out loud. To one degree or another, all businesses in China operate at the pleasure of an authoritarian state,” she said.

“That is why the US government is concerned about more and more industries . . . But is this the cost of doing business? In pharma, many companies have decided that it is.”

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