China's biotech innovation fuels Merck's long-term healthcare bet

Germany-headquartered science and technology giant Merck will continue to deepen its presence in China's healthcare sector, as the country's strong innovation capacity, vast market potential and rapid advances in artificial intelligence create long-term growth opportunities, a senior executive said.

"China's most distinctive strength lies in its innovation capacity," Andre Musto, managing director and general manager of Merck Healthcare China, said in an exclusive interview with China Daily.

Over the past decade, China has made remarkable strides in innovation across a broad range of sectors, while its vast market, considerable growth potential and leading position in AI and digitalization have made it increasingly attractive to global healthcare companies, Musto said.

He identified "China speed" as one of the country's defining characteristics, saying the rapid pace of development can be seen throughout the pharmaceutical value chain — from early-stage research and clinical development to regulatory approvals and commercialization.

A June report by the McKinsey Global Institute also highlighted China's research and development efficiency. Referring to the process from target identification to clinical trials, it found that companies in China can move about 1.5 times faster than the global benchmark, while patient enrollment can be two to five times faster.

China approved a record 76 innovative drugs in 2025, up from 48 a year earlier, said the National Medical Products Administration.

China accounted for about 30 percent of the global biopharma pipeline in 2025, up from just 2 percent a decade earlier, said McKinsey. The report said China was more than a lower-cost development base, having built a distinctive innovation model based on speed, scale and the ability to turn scientific advances into therapies.

"I believe it is only a matter of time before China has the world's largest innovative drug pipeline," Musto said.

China's growing R&D capabilities have also drawn greater international attention regarding cooperation with Chinese drugmakers.

More than 150 outbound licensing deals involving Chinese innovative drugs were completed in 2025, with their combined value exceeding $130 billion, said the NMPA, with both figures reaching record highs.

The trend underscores China's expanding role in global drug development, with the country becoming not only a major market for international pharmaceutical companies, but also an increasingly important source of innovative assets and therapies, Musto said.

He also highlighted China's open and inclusive development environment. During visits to several provinces in China, Musto said he had been impressed by local authorities' willingness to listen to businesses, understand industry needs and explore new forms of cooperation to advance pharmaceutical innovation and improve patient access to new treatments.

AI and digital technologies are expected to further reshape the healthcare sector, he said, with applications spanning drug discovery, clinical research, manufacturing, supply chain management, business operations and patient services.

"What we are seeing today is only the tip of the iceberg," Musto said, adding that the transformative potential of AI and digitalization across the pharmaceutical sector has only begun to be tapped.

The role of foreign pharmaceutical firms in China could go beyond bringing globally developed medicines to the Chinese market, he said, adding that they could also work with Chinese companies to support the development and commercialization of locally developed therapies both in China and overseas.

Looking ahead, Merck will continue to explore cooperation opportunities with Chinese companies, support the global development of locally developed therapies and introduce more innovative products into the Chinese market, he said.

"Merck has been deeply rooted in China for more than 90 years, and China has always been a strategically important market for us. That long-term commitment will not change."