China has recently tightened the rules on what leaves the country. A new regulation on outbound investment took effect in July, and in October Beijing proposed export controls on cell and gene therapy and small nucleic acid technologies. Both concern Chinese capital and technology going out. In November, China also issued new rules for foreign companies doing clinical research with Chinese patients. For a European company that wants to bring its own drug project in, the questions are different: which regulator to approach first, what clinical data Chinese authorities will accept and who will pay for the product.
Start with the market, not the registration
Michael Spangfort has worked in life science for 30 years, 15 of them in China and Hong Kong, spanning immunology and allergy research, R&D leadership, and regulatory and market access work. He is also a member of the WHO/IUIS Allergen Nomenclature Sub-Committee. When Nordic biotech executives first look at China as a market for their own products, he often sees the same misjudgement.
– I think the most common mistake is to underestimate the complexity of turning a good product into a commercially successful product in China. Nordic biotech companies often have strong science, innovative technologies and high-quality products. But there is sometimes an assumption that if a product is successful in Europe, it should also be successful in China, says Michael Spangfort.
– China is a huge market, but it is also extremely competitive, price-sensitive, increasingly sophisticated and companies cannot simply transfer their European commercial model to China. Hence, I think it is essential from the outset to understand the barriers of adoption and decide upon a China-specific business model and a well-defined China market access strategy. Companies need to consider pricing, reimbursement, logistics and distribution channels, local partnerships and, importantly, geography.
– China is not one homogeneous market. Healthcare infrastructure, purchasing power, clinical practices and market access conditions differ considerably between regions. A focused strategy targeting selected provinces, cities or hospital segments may therefore be far more effective than attempting nationwide market entry from the outset.
Better is not always enough
A strong product also has to fit the way Chinese healthcare works, he says.
– Companies also need to understand the patient journey, patient behaviour and preferences, how hospitals operate, how products are distributed and purchased, how reimbursement works and whether their technology addresses a genuine clinical need in China.
– Rather than simply offering a product, I believe companies should focus on providing solutions that address unmet clinical needs, fit into local healthcare practices and deliver clear clinical or economic value. There is a saying that China has no shortage of patients, but what is in short supply is doctors’ time. Solutions that improve efficiency, simplify clinical workflows and reduce the burden on healthcare professionals may therefore offer greater value than products that merely provide superior technical performance.
Domestic competition adds to the pressure
– I would also emphasise that Chinese companies are increasingly capable competitors. A technically superior European product may not offer a commercial advantage if a Chinese alternative is sufficiently good, less expensive and better adapted to local needs.
– So, in summary: don’t start by asking how to register your product in China. Start by understanding the local healthcare ecosystems, the clinical needs and challenges your solution or product can address, and the barriers to its adoption. Then develop a business model and market access strategy tailored to your specific offering and the realities of the Chinese market and assess whether your organisation has the capabilities and long-term commitment needed to establish and sustain a successful presence.
The Hong Kong option
Once the market case is clear, Hong Kong offers one of the faster routes to a first approval. The territory has rebuilt its drug approval route over the past three years. The 1+ mechanism launched in November 2023 and was widened a year later to cover all new drugs. It lets a company register a product on the strength of an approval from one reference regulator, provided the application is backed by local clinical data endorsed by local experts. By the end of August, 22 drugs had been approved that way.
In September, Hong Kong set out its first five-year plan, calling the territory a super connector between mainland China and the rest of the world. One of the goals is to become an international health and medical innovation hub, and Asia’s leading centre for early-phase trials. By 2030, Hong Kong aims to have its Centre for Medical Products Regulation (CMPR) fully operational, overseeing the evaluation and regulation of both pharmaceuticals and medical devices, with the ambition of gaining international recognition of its regulatory decisions. Since March, Hong Kong has already begun assessing some drug applications itself, rather than relying on approvals from elsewhere.
The CMPR is due to be set up this year, and its controller, Li Zili, took up the post on 20 October. He has served as a medical team leader at the US FDA and as head of Asia-Pacific R&D at Janssen, a background in both regulation and global drug development that fits the territory’s ambition.
Whether a Hong Kong approval will carry weight with the NMPA and other regulators is still an open question.
– I see an opportunity for Hong Kong to establish itself as a credible international regulatory authority while developing strong regulatory cooperation with mainland China, without necessarily adopting the entire NMPA regulatory framework. What matters is that both authorities have confidence in each other’s scientific standards, regulatory assessments and decision-making processes, says Spangfort.
– To achieve this, Hong Kong will need to build their Hong Kong Centre for Medical Products Regulation (CMPR) organisation with the scientific expertise, regulatory independence and operational capabilities required to conduct robust assessments of quality, safety and efficacy. Its credibility will depend on internationally accepted scientific standards, transparent procedures, consistent decision-making and effective regulatory oversight throughout the product lifecycle, including post-market surveillance.
– International alignment will be important, particularly through organisations and frameworks such as ICH, WHO and PIC/S. However, harmonisation of regulatory requirements does not automatically translate into mutual recognition of regulatory decisions. Mutual recognition requires more than technical alignment; it depends on demonstrated regulatory competence, mutual trust and formal agreements defining the scope and conditions of recognition.
– At the end, the international value of a CMPR Hong Kong approval will depend not simply on the approval itself, but on the scientific credibility and regulatory competence of the authority behind it.
A small market and a wider hub
For a small European company, Spangfort starts with what a Hong Kong registration can and cannot do.
– First, I think it is important to clarify that a Hong Kong registration does not in itself provide access to the broader mainland Chinese market. Under the Greater Bay Area (GBA) programme, certain products registered and used in Hong Kong hospitals may also be used in designated mainland hospitals in Guangdong Province, subject to provincial approval. However, this pathway is separate from the NMPA marketing authorisation process and does not provide regulatory approval for the wider Chinese market.
The scheme covers designated hospitals in the region’s nine mainland cities, which can apply to use urgently needed drugs and devices already registered in Hong Kong or Macao. By the end of July 2026, 77 drugs and 95 medical devices had been approved for use at 71 designated institutions, according to Hong Kong’s Department of Health.
– Hong Kong is a relatively small healthcare market, but it has sophisticated hospitals, internationally experienced clinicians and a strong clinical research environment. For smaller European companies, particularly those with products already approved in Europe or another recognised reference market, I would assess Hong Kong as a business opportunity on its own merits. In addition, beyond its domestic market, Hong Kong may serve as a strategic hub for a broader China and Asia strategy, offering an internationally connected business environment, access to capital, regional networks and geographic proximity to major Asian markets, as well as proximity to mainland China’s innovation and manufacturing ecosystem, he says.
– For products eligible under the GBA programme, there may be additional opportunities to gain clinical experience, establish adoption in selected mainland hospitals and generate real-world evidence that could potentially support a future NMPA marketing authorisation application.
– In short, I believe Hong Kong should be evaluated both as a market in its own right and as a potential strategic hub for China and Asia, rather than simply as a regulatory gateway to mainland China.
The scheme is limited to one province, but Spangfort sees its value for building relationships with Chinese clinicians ahead of a national launch.
– I think the value of the Greater Bay Area programme goes well beyond the immediate commercial opportunity. For a small European company with a product eligible for the GBA programme, it can provide an opportunity to gain experience with its product in mainland GBA Chinese hospitals, establish relationships with clinicians and key opinion leaders, and better understand local clinical needs and market conditions.
– It may also create opportunities to generate real-world clinical evidence in Chinese patients, which could help inform future product development and NMPA regulatory strategies.
– In essence, while geographically limited to Guangdong Province, the GBA programme allows companies to test some of their assumptions about the Chinese market before committing to a much larger investment in national registration and commercialisation. I would therefore see the GBA programme not simply as a sales channel, but as a potentially valuable step in developing a broader China strategy and generating real-world data that potentially could support a future NMPA marketing authorisation application.
Chinese patients and samples
On the mainland, some projects can now get into the clinic faster. Since September 2025 the NMPA has offered a 30-working-day review of trial applications for Class 1 innovative drugs that meet certain conditions. These include phase I and II trials of drugs being developed in step with other markets, and multinational phase III trials that Chinese investigators lead or co-lead. The sponsor must commit to starting within twelve weeks of approval.
Whether a European company needs a dedicated Chinese study, or can add Chinese sites to a multiregional trial, depends on the evidence.
– I believe that, whereas the NMPA can accept overseas clinical trial data, and Chinese patients can participate in global multiregional trials, the key question is whether the available evidence adequately supports the product’s safety and efficacy in the Chinese population. This depends on whether differences in genetics, drug metabolism, clinical practice or patient characteristics could affect the medicine’s safety or efficacy in Chinese patients, says Spangfort.
– Where the evidence is sufficient, additional China-specific studies may not be necessary. Where important uncertainties remain, bridging studies or further clinical trials in Chinese patients may be required. For European companies, my advice would be to consider China early in their global clinical development strategy and pro-actively engage with the NMPA to establish what evidence will be required.
Running trials in China brings a separate set of rules. Foreign parties may not collect or store Chinese human genetic resources on their own and must work through a Chinese partner. Oversight now sits with the National Health Commission. Patents arising from such research must be filed and owned jointly. New implementing rules issued on 11 November, which replace the 2023 version, now define a company as foreign if overseas organisations or individuals set it up, control it or own 50 per cent or more of it. Patient data sent abroad from a Chinese trial also falls under China’s personal information rules, and the requirements get stricter as volumes grow.
That raises the question of how a collaboration should be set up so the company does not give away more intellectual property than it intended.
– I would start by distinguishing between the regulatory obligations governing Chinese human genetic resources and the contractual arrangements governing intellectual property. They are related, but they are not the same thing, he says.
– China has specific regulations governing human genetic resources, and international collaborative research involving these resources can trigger requirements for joint ownership of patents arising from the research. However, this does not mean that a European company must give its Chinese partner ownership of its existing technology or intellectual property.
– The starting point should be to clearly define what each party brings into the collaboration, the scope of the research and how newly generated intellectual property will be managed. The company should protect its existing patents, proprietary technology and know-how, while carefully defining ownership and commercial rights to inventions arising from the collaboration. Where joint patent ownership is required, the parties should clearly define their respective rights to develop, license and commercialise the resulting inventions, including rights outside China.
– My advice would be to involve experienced Chinese legal and regulatory experts before entering the collaboration. The objective should be to enable scientific cooperation while protecting the company’s existing intellectual property and know-how, and securing appropriate rights to newly developed technologies, without compromising its freedom to develop and commercialise products and technologies internationally.
Who holds the licence
Licensing avoids one layer of Chinese rules. When BioStock recently looked at how Chinese capital leaves China, Aaron Gu of Han Kun Law Offices in Shanghai said that a customary licensing deal is not covered by the outbound investment regulation, since it most likely does not count as an outbound investment.
For a small European company, the choice is often framed as licensing to a Chinese partner or building a presence of its own. Spangfort sees a wider range of options.
– A European company does not necessarily have to choose only between licensing its product to a Chinese partner or establishing its own presence. There are also intermediate models where the company retains control over its product while relying on local partners for regulatory, clinical or commercial activities. The right approach depends on the company’s resources, the nature of the product and the strategic importance of China to its business.
– Establishing a local presence may be more appropriate when China is strategically important to the company, sufficient resources are available, and greater control over regulatory and commercial activities is a priority.
– For a small European biotech company with limited resources, licensing to an established Chinese partner can be an attractive option. A good partner can provide regulatory expertise, access to clinical networks, commercial infrastructure and the financial resources needed to develop and market the product. The company can then receive upfront payments, milestones and royalties without having to build a complete Chinese organisation. However, licensing also means giving up some control, and it is therefore essential to choose the right partner and structure the agreement carefully.
One question carries particular weight.
– Who will be the Marketing Authorisation Holder (MAH) in China? Will the European company retain the marketing authorisation (MA), or will the Chinese partner hold it? This has significant implications for regulatory responsibilities, post-market obligations and long-term control of the product. Also, if the Chinese partner holding the MA underperforms, it can be difficult to regain control or transfer the MA to another partner. Such a transfer may require the existing partner’s cooperation and must also comply with Chinese regulatory requirements, says Spangfort.
– When selecting a partner, I would prioritize proven experience with comparable products, a solid understanding of regulatory requirements and the relevant disease area, and established access to hospitals and target patient segments, over company size or reputation.
– Depending on the commercial arrangement, the partner must also have the organisational capabilities to fulfil its regulatory, quality and post-market responsibilities. Equally important are transparency, effective communication and a willingness to commit the financial and organisational resources needed to successfully develop and commercialise the product in China.
– Furthermore, I would be cautious about partners who make ambitious sales projections but cannot demonstrate a track record of successful product launches, a solid understanding of the relevant therapeutic area, or a credible regulatory and market access strategy. Equally concerning are partners who seek broad exclusive rights without committing to measurable development and commercial milestones. Finally, even with a strong partner, it is essential that the European company retains sufficient internal expertise to understand and oversee what is happening in China.
Whatever the model, the rules keep moving
– Another very important aspect is that the China regulatory landscape is continually evolving, and regulatory changes are often implemented at a speed we are not accustomed to in Europe. Companies should therefore take a proactive rather than reactive approach by monitoring regulatory policy trends and anticipating potential changes, so they are better prepared to respond quickly to new requirements and adapt their regulatory strategies when necessary. In addition, regulatory approval is only the beginning; maintaining products on the market requires ongoing regulatory lifecycle management, quality assurance, post-market surveillance and compliance with evolving requirements. Meeting these obligations demands dedicated local expertise, organisational flexibility and a long-term commitment.
– China is not a market that can easily be managed from a Nordic headquarters through occasional visits or by relying entirely on external consultants and distributors. In my view, companies need dedicated local expertise, strong relationships and clear responsibilities, supported by a headquarters that understands the Chinese market and can respond quickly to local needs and changes in the regulatory requirements.
Who pays on the mainland
An approval does not guarantee sales. Reimbursement in China runs through the National Reimbursement Drug List, renegotiated every year. The 2025 round added 114 drugs from January 2026. The same month, China launched its first commercial health insurance drug list, with 19 products, a second route for innovative drugs too expensive for the basic list.
– European companies need to recognise that China has its own pricing and reimbursement environment, which should be taken into account when developing their China-specific business model from the beginning, says Spangfort.
– Companies also need a realistic understanding of market dynamics and how many patients are likely to receive the treatment. Market estimates are often based on published prevalence data and assumptions about diagnosis and treatment rates, rather than reliable data on actual patient uptake. The commercial potential will depend on reimbursement conditions, hospital adoption, patient behaviour and preferences, competition, geographical differences and the resources available to support commercialisation.
– For innovative medicines, inclusion in the national reimbursement system can significantly improve patient access and increase sales volumes. However, this often comes at the cost of substantial price reductions through negotiations with the Chinese healthcare authorities. The key question is whether the increased volume will compensate for the lower price while maintaining a commercially sustainable business.
– For a small European biotech company, I would recommend evaluating different scenarios before entering the market: one based on national reimbursement and broader patient access, and another based on a more selective commercial strategy without national reimbursement. The main objective should be to establish a commercially sustainable business while making the product accessible and affordable to Chinese patients.
Allergy as an example
Spangfort’s own field shows why the choice of project matters.
– Allergy is a good example of why European companies need to understand local disease patterns, clinical practices and unmet medical needs before deciding which products to introduce in China.
– The prevalence and clinical importance of allergen exposure, sensitisation and allergic disease manifestations differ between China and Europe, as well as across different regions of China. House dust mites are particularly important causes of respiratory allergy in many regions, while pollen exposure and sensitisation patterns differ considerably between northern and southern China. Food allergy patterns may also differ from those in Europe, with considerable regional variation within China itself. These geographical differences in allergen exposure patterns can influence the regional need for specific allergy diagnostics and immunotherapies in China.
– Another important consideration is how allergic diseases are diagnosed and treated. The range and availability of diagnostic tests and treatment options are generally more limited in China than in Europe, particularly for molecular allergy diagnostics and allergen immunotherapy. Furthermore, access to allergy specialists varies considerably across China, and clinical practices and patient pathways, including how patients seek medical care, obtain a diagnosis, receive treatment and access follow-up care, may differ significantly from that in Europe. Such differences may highlight unmet medical needs and opportunities for innovative diagnostic and therapeutic solutions.
– Anaphylaxis management provides another example. Adrenaline auto-injectors are well established in many European countries but have historically had limited availability and adoption in mainland China. Introducing such products requires more than regulatory approval. It also involves establishing a more proactive approach to identifying and managing patients at risk of anaphylaxis, including appropriate prescribing, physician and patient education, and training patients and caregivers to administer adrenaline in an emergency. The safe carriage and appropriate self-administration of adrenaline auto-injectors must also be addressed, as their introduction represents a significant shift from relying primarily on healthcare professionals to administer treatment.
– My main point is that companies should not simply bring products that have been successful in Europe. They should identify where their technologies can address genuine unmet clinical needs in China and offer solutions adapted to healthcare practices, patient behaviour and market conditions, Spangfort concludes.
