Core Insights - The approval of innovative drugs in China has significantly increased, with 43 new drugs approved in the first half of 2025, marking a 59% year-on-year growth, nearing the total of 48 approved in 2024 [1][9] - The growth reflects the success of the drug review and approval reforms initiated in 2018, which have enhanced the efficiency and effectiveness of the approval process [2][13] Regulatory Reforms - The drug review and approval reform has accelerated the entire process from research to market, particularly for urgently needed new drugs [2][4] - The National Medical Products Administration (NMPA) has implemented various channels such as breakthrough therapy designation and priority review to encourage innovation [2][16] - The average review time for drug applications has been reduced from 200 working days to 60 working days, facilitating faster market entry for new products [4][16] Innovative Drug Approvals - Among the newly approved drugs, notable breakthroughs include the first gene therapy product for hemophilia B and a drug for rare metabolic diseases [9][12] - In 2025, 70 pediatric drugs and 21 rare disease drugs were approved, highlighting a focus on addressing critical health needs [11][12] Industry Competitiveness - China's innovative drug development pipeline accounts for approximately 25% of the global total, with around 3,000 clinical trials conducted annually, positioning the country among the leaders in the field [15][17] - The NMPA plans to enhance policy support to guide companies in developing clinically valuable drugs, particularly those targeting major diseases [16][17] Future Initiatives - The NMPA aims to revise approval procedures and strengthen intellectual property protections to foster innovation [17] - Efforts will be made to enhance international collaboration and regulatory alignment to support Chinese innovative drugs entering global markets [17]

Investment Rating - The industry investment rating is "Outperform the Market," indicating an expected relative increase of over 10% in the industry index compared to the broader market within the next six months [5][8]. Core Insights - The National Medical Products Administration (NMPA) has reduced the review and approval time for clinical trial applications of eligible innovative drugs from 60 days to 30 days, aiming to accelerate the market entry of innovative drugs and shift domestic new drug development from "Fast-Follow" to "First-in-Class" [3]. - The focus of this policy includes pediatric drugs, rare diseases, and globally synchronized research products, with the NMPA encouraging the development of pediatric and rare disease medications through various incentives [3]. - Data from Yaozhi Network indicates that leukemia is the most common cancer among children, accounting for approximately 30% of all cases, while brain and spinal cord tumors account for about 25% [3]. - The overall trend shows that the domestic innovative drug review and approval policy has transitioned from "passive approval" to "active empowerment," enhancing the global competitiveness of domestic innovative drugs [3]. Summary by Sections Regulatory Changes - The draft proposal outlines that eligible innovative drugs must be either traditional Chinese medicine, chemical drugs, or biological products that meet specific criteria, including being supported by the state or included in special programs for children and rare diseases [2]. - Applications for eligible innovative drugs will be reviewed and approved within 30 working days [2]. Market Implications - The policy aims to facilitate early global synchronized research and international multi-center clinical trials for eligible innovative drugs [2]. - If a review cannot be completed within 30 days due to technical reasons, the NMPA will inform the applicant, and the subsequent timeline will follow a 60-day implied approval process [2]. Industry Performance - The report indicates that the pharmaceutical and biotechnology sector has shown a relative performance against the CSI 300 index, with a notable increase in the sector's attractiveness for investment [5][6].