Brillix 

China will play a major part in reducing drug prices, whose current high costs present a challenge, said Da Liu, managing director of the CR-CP Life Science Fund, at the Brillix Book talk in Hong Kong on August 15. Liu, a member of the Brillix team, was discussing his book, “Life Sciences Unicorns from a China investment perspective”. “The challenge is the drugs are getting more expensive,” said Liu, who pointed out that some drugs can cost more than US$10,000 per month. “How can we reduce healthcare costs?” Driving up drug prices are the huge sums companies pay to acquire drug producers. Liu’s book cited the example of a cancer therapy known as CAR-T, where on August 28, 2017, Gilead Sciences, a US biopharma company, announced its acquisition of Kite Pharma, a US CAR-T firm, for US$11.9 billion. “The old model must change. Costs are too high,” Liu declared. Under the old mindset of Big Pharma, the development of a new drug is accompanied by expensive intellectual property (IP), Liu explained to Brillix. Big Pharma’s rationale for high drug prices is its need to finance future innovations, he added. High drug prices will pose a problem for patients who lack adequate healthcare insurance. “Globally no country is devoid of problems in healthcare coverage. This is a very big problem,” he added. In the US for example, about 30 million people do not have health insurance, Liu estimated. According to another estimate by the US Census Bureau, 26 million Americans, or 8 percent of the US population, lacked health insurance in 2023. Innovation is very important to increase efficiency and reduce cost, Liu explained. In China, the cost of innovation is low while clinical trials are fast and the country offers a huge population to supply an abundant pool for clinical trials, Liu said. Many Chinese people are hardworking and work fast, Liu told Brillix. With the rapid advancement of medical reforms in China, such as frequent tenders of volume-based procurement, the business cycle of an innovative pharmaceutical product in China has shortened significantly, Liu’s book said. Pricing pressure has already become a critical factor impacting the business plan of a product launch in China, the book added. The value China provides to foreign biotech firms is a base to incubate new technology, obtain funding, hire management talent and have initial public offerings (IPOs) on local stock exchanges, Liu said. He cited an Israeli biotech company which failed to obtain funding in Israel, the US and EU. In the end, this firm’s major investors are from Asia including Singapore, Hong Kong and mainland China. “Globally, one third of innovative drugs are from China. Twenty years ago, there was no innovative drug from China,” Liu said. The reform of the Hong Kong Stock Exchange in 2018 allowed pre-revenue companies to list on the exchange, thus attracting biotech and life sciences companies to list in Hong Kong, according to Liu’s book. The Shanghai Stock Exchange followed suit in 2019 with the establishment of the Science and Technology Innovation Board to encourage biotech and life sciences companies, which are not yet profitable, to list on the board, the book added. Hong Kong was the world’s biggest IPO market in the first half of 2025. As of 2023, 126 healthcare and biotech companies had listed in Hong Kong, raising about HK$276 billion (US$35.3 billion), according to the Hong Kong Stock Exchange. The Chinese pharmaceutical market, worth US$300 billion, is the world’s second largest pharmaceutical market with the highest expected growth rate among major economies, Liu’s book pointed out. “Underlying drivers for healthcare demand, including the aging population, rising living standards, and improving healthcare infrastructure, will sustain strong growth.”