Deloitte Consulting: 2025 China Life Sciences and Healthcare Industry Research Report

The survey covers multiple areas, including business performance in 2024, industry outlook in 2025, and changes in business models and other operating processes required to cope with the Chinese environment.

Outlook and considerations for China's life sciences and healthcare industry

The majority (54%) of respondents believe their China business in 2024 will exceed that in 2023. A total of 60% of companies achieved their planned targets or better (the same as last year), but 40% of companies still performed below expectations. Notably, companies in the medical technology sector performed significantly below expectations compared to biopharma companies.

The continued shortening of product life cycles and pricing remain the most critical considerations for all stakeholders, while the introduction of innovative drugs and technologies is a top priority. In addition, the "going global" strategy remains important, and domestic and foreign companies are paying more attention to continuing to expand their business.

Only 6% of respondents expressed a negative attitude towards the industry outlook for 2025, but the expectations of medical technology companies were quite different, with about 14% of the companies surveyed expecting their business to decline. Local companies were more optimistic about the growth prospects, while foreign companies' growth expectations were more balanced, with 65% of foreign companies expecting growth of more than 5%. However, the details show that overall cautious attitudes prevailed, as more foreign companies believed that the growth prospects were only 5%, while the expectation a year ago was for growth of more than 10%.

New regulatory and technological impacts

The survey once again shows that the regulatory framework has become more critical for local and foreign companies in China. Nearly half of the respondents believe that China's regulatory framework will be tightened in 2024, especially for large companies and local companies. In addition, the escalating impact of data privacy issues and export restrictions has made the development of "In China, for China" (C4C) solutions more urgent.

It is also worth noting that the rapid development of artificial intelligence and smart technologies has affected all players in the entire value chain (page 16 of the report). For both state-owned enterprises and private enterprises, the application of new technologies and global cooperation are more critical than market access (R&D funding).

Shift in business investment strategies

The development of new channels remains critical for all stakeholders, especially local companies. As domestic innovation capabilities improve, local competition is also intensifying, bringing a wave of investment across the value chain. About two-thirds of the respondents have increased their investment in localized R&D, and more than two-thirds of the companies surveyed have increased their investment in localized supply chains, especially local companies. (Page 19 of the report)

Given its market size, China remains a favored investment destination, but many respondents are now taking a more cautious approach. Under the "going out" trend and greater commercialization pressure, local companies are seeking new assets and partners. The evaluation of the return on investment in China has become more important for all companies, and ensuring the right R&D investment and the introduction of "original" innovative assets is a top priority. (Report pages 21-22)

Insight Summary

Looking ahead, building a more precise value positioning is particularly important to win the Chinese market. Companies are exploring new ways to create value and adopting flexible partnerships and transaction models to achieve long-term success. All participants in China's life sciences and medical industry need to re-examine their market strategies, develop innovative asset lifecycle management methods suitable for the Chinese market, and strengthen digital capabilities to make full use of local smart technologies, which will also be the key to winning the market.

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