Uneven Gains, Mounting Risks: Tough Road Ahead for Pharma Giants in China

As of mid-2025, multinational pharmaceutical companies (MNCs) in China are navigating a landscape of selective growth and significant challenges, driven by regulatory shifts, local competition, and geopolitical tensions. Drawing from industry analyses by the 21st Century Economic Herald, L.E.K. Consulting, and PHIRDA, alongside financial disclosures, this SinoDrugWatch report examines the performance of the top seven MNCs by China revenue, while also highlighting struggles faced by others. China’s pharmaceutical market, projected to expand to $126.6 billion by 2030 at a 7.8% CAGR (Grand View Research, 2023), remains a critical growth engine yet volatile arena, with contributions to global revenue varying widely—from 12.53% for AstraZeneca to 3.24% for Lilly among top performers, and even less for those facing declines.

The first half of 2025 revealed a polarized picture. Leaders like AstraZeneca and Lilly leveraged innovative portfolios, while Merck and Sanofi encountered major setbacks from local rivals and policy pressures. Beyond the top tier, companies like Pfizer and Johnson & Johnson (J&J) also faced headwinds, reflecting uneven market dynamics. MNCs are adapting by diversifying channels—shifting from hospital-centric models (now 20% of some firms’ reach) to retail and e-commerce (over 50%)—and forging local partnerships and licensing deals to counter margin erosion from volume-based procurement (VBP) and Medicare negotiations.

Performance Snapshot: Top 7 MNCs in China

The table below ranks the top seven MNCs by H1 2025 China revenue (in Billion USD), with H1 2024 comparisons derived from year-over-year (YoY) changes, proportion of total pharma revenue, top-selling drugs with estimated H1 2025 sales, and key events in China during H1 2025:

Note: H1 2024 revenues calculated from H1 2025 figures and YoY changes (e.g., AstraZeneca: 3.515 / 1.05 ≈ 3.349). Top drug sales are estimates based on company reports and China proportions. Data cross-verified with earnings releases and industry analyses.

Key Insights from H1 2025

• Growth Leaders: AstraZeneca’s 5% growth, contributing 12.53% to its global revenue, reflects strong oncology demand for Tagrisso, bolstered by R&D partnerships. Novartis (8%) and Roche (9%) leveraged immunology and multiple sclerosis portfolios, while Lilly’s 20% surge in tirzepatide sales (Mounjaro/Zepbound) highlights its dominance in diabetes/obesity—though its 3.24% China contribution underscores limited reliance.
• Struggling Giants: Sanofi’s near-stagnant 0.1% growth underscores pricing pressures, worsened by the Praluent withdrawal. Merck’s -70% drop, driven by a $1.1 billion Gardasil sales collapse in Q1 due to Wantai’s home-grown Cecolin 9, triggered global layoffs. Novo Nordisk’s 6% rise in GLP-1 therapies faces emerging local rivals.
• Revenue Context: China’s contribution to total pharma revenue varies widely, from 12.53% (AstraZeneca) to 3.24% (Lilly), with Merck’s 3.90% reflecting a sharp decline from prior highs, signaling uneven reliance on the market.

Challenges Facing MNCs in China's Pharma Market

MNCs in China faced a tough H1 2025, marked by regulatory tightening, geopolitical risks, and aggressive local competition. The anti-corruption drive curbed discretionary spending, while Sino-US tensions delayed projects and spurred tariff fears, pushing firms toward local sourcing. Pricing reforms and an aging population’s shifting needs strained margins, necessitating compliance-heavy and innovation-focused strategies.

Merck’s Gardasil debacle is a stark example, with a 41% global sales drop to $1.3 billion (Q1) and a $1.1 billion China-specific loss, prompting an extended shipment pause to year-end and cost-cutting measures. This stemmed from Wantai’s home-grown Cecolin 9 (60% cheaper), weak spending, and anti-corruption effects. Sanofi exited Praluent due to supply shortages and NRDL-listed PCSK9 competitors. Roche saw a 26% China sales dip from pricing reforms, shifting to local reagents. AstraZeneca tackled Tagrisso patent issues and importation probes, while Novartis braced for Entresto’s mid-2025 patent cliff. Novo Nordisk and Lilly monitored GLP-1 competition, with Lilly facing pipeline litigation.

Beyond the top 7, challenges persisted:

• Pfizer: Estimated H1 2025 China revenue of ~$1.2 billion (based on a 6% operational decline from $1.36 billion in H1 2024, derived from global trends and a 4-5% China contribution to $28.37 billion H1 global revenue), or ~4.2% of its global total, reflects declining COVID-19 product sales (Paxlovid, Comirnaty) and supply chain disruptions, compounded by reduced regional investment.
• Johnson & Johnson (J&J): Estimated H1 2025 China revenue of ~$2.3-3.2 billion (based on a 5-7% historical contribution to its $45.64 billion global H1 revenue), or ~5-7% of its total, faced vaccine sales drops due to regulatory scrutiny and consumer shifts, alongside tariff threats and Stelara’s biosimilar erosion.
• BMS: Estimated at $0.8 billion in China, or ~7% of its $11.2 billion global Q1 haul, down 6% YoY. Geopolitical tensions and VBP delays hampered Opdivo’s growth.
• GSK: Estimated at $0.7 billion in China, or ~5% of its projected $14-15 billion global H1, faced vaccine sales declines due to regulatory scrutiny and consumer behavior changes.

These figures underscore China’s diminishing revenue share for some MNCs, driving a push for localized strategies.

Headwinds for Top-Selling Drugs

Even the blockbuster drugs driving H1 2025 revenue face looming threats in China, including patent expirations, local biosimilars, and pricing pressures. Here’s a snapshot:

• Tagrisso (AstraZeneca): Despite strong sales, it contends with ongoing patent invalidity challenges and price cuts (nearly 60% for NRDL inclusion). Emerging combinations like ORPATHYS®+Tagrisso for MET-amplified lung cancer signal collaborative adaptations, but biosimilar competition in NSCLC looms.
• Entresto (Novartis): Already eroded by generics—at least 13 Chinese firms sell versions, with dozens in trials—and a mid-2025 US patent cliff spilling into global dynamics. Slowing pharma spending in China caps growth.
• Ocrevus (Roche): Patent expirations risk $800M+ annual losses from biosimilars, with a failed dose-increase trial limiting expansion. Pricing reforms hit diagnostics and MS market uptake.
• Dupixent (Sanofi): Chinese fast-followers challenge in atopic dermatitis and COPD, with emerging rivals eroding exclusivity. Strong growth (20%+ globally) persists, but pricing and biosimilars loom.
• Ozempic/Wegovy (Novo Nordisk): Faces 15+ generic rivals in China, with patent expiration in 2026 enabling low-cost entries. Chinese biotechs target obesity complications, intensifying price-sensitive competition.
• Keytruda (Merck): Challenged by Chinese rivals like Akeso's ivonescimab, outperforming in trials and approvals. Biosimilars loom post-2028 patent expiration.
• Mounjaro/Zepbound (Lilly): New local rivals like Innovent's mazdutide and Hengrui's HRS9531 show comparable results, breaking into GLP-1 space. Launch in China by late 2025 faces intensifying competition.

Strategic Shifts in China’s "Mid-Field War"

MNCs are pivoting to multichannel models, with retail/e-commerce now over 50% of channels (up from hospital-centric 50% previously) and CSOs at 30%. Partnerships are critical—Menarini China’s CEO stressed external cooperation, while Ipsen’s GM emphasized global alignment. L.E.K. Consulting notes China’s innovation surge (e.g., oncology, gene therapy) contrasts with MNC commercialization strengths, with local firms underestimating competition. PHIRDA highlights 31 H1 2024 deals (39% phase 2/3), with MNCs using acquisitions to build moats and tackle hospital listing delays (10% of top hospitals procure new Medicare drugs per IQVIA).

Outlook: Opportunities Amid Risks

Despite dual-channel policies aiding access, challenges like high R&D costs and "advance difficulty" for new drugs persist, per LEO China’s GM on hospital bottlenecks. Yet, China’s growth potential—projected at 7.8% CAGR to 2030 (Grand View Research)—fuels optimism. Eurofarma targets women’s health, but risks like Merck’s Gardasil woes and Pfizer’s COVID decline demand adaptive pricing,  local ties, and agile channels.

Sources

21st Century Economic Herald (July 2024), L.E.K. Consulting (2024), PHIRDA (2024), company earnings(2024, 2025), Pharmacube, Fierce Pharma, Reuters, Grand View Research (2023).