South Korean executives used to trade on a comforting geographic narrative: Japan was the seasoned innovator to the east, China the low-cost imitator to the west, and Korea the smart middle power, borrowing from both while charting its own course.

That framing no longer seems to work.

“Honestly, there’s no area where Korea still holds a clear edge over China. Nothing we do is faster, cheaper or deeper than China,” said Lee Seung-gyu, vice chairman of the Korea Biotechnology Industry Organization (KoreaBIO), in a phone call with Korea Biomedical Review (KBR) on Tuesday. He paused before adding, “I wish that were an exaggeration.”

A tide that turned in four years

An April study published in Drug Design, Development and Therapy counted 256 new molecular approvals by China’s regulator between 2019 and 2023. The U.S. logged 243 in the same period, Europe 191.

Fifteen Chinese drugs were first-in-class. Korea has yet to record one.

Yuhan Corp.’s lung-cancer pill Lazcluze (lazertinib), sold in Korea as Leclaza and the first Korean cancer drug cleared by the FDA, is praised at home but viewed by analysts as merely a best-in-class update to AstraZeneca’s Tagrisso (osimertinib), not a true breakthrough.

Before the pandemic, Chinese drug approvals trailed the U.S. by more than two years. Since 2021, that gap has narrowed to about 12 months. In 11 cases, including Akeso’s bispecific antibody ivonescimab, China acted first.

Approved in April for first-line lung cancer based on China-only data, ivonescimab has yet to win over U.S. analysts, according to American news reports, which have raised questions about its survival benefit and broader applicability.

Three forces explain the shift. Regulators in China trimmed wait times with priority reviews and a negative-list approach that lets most trials start unless flagged. 

“Once a drug was approved in the U.S. or Europe, it used to take seven to eight years just to start trials in China,” said an executive at a Chinese contract research firm, speaking on condition of anonymity. “And the policies back then weren’t friendly to foreign companies.”

Take Cresemba: cleared by the FDA in 2015, it didn’t reach Chinese patients until 2022.

Second, state and venture funds invested about $40 billion into out-licensing deals last year, according to Pharmcube data published in Nature last July, transforming former copycat shops into laboratories that now court Western buyers. 

Third, thousands of U.S.-trained researchers -- the "haigui," or sea turtles -- have returned home, transplanting American lab culture into start-ups across Shanghai and Shenzhen.

At the 2025 BIO International Convention, Noh Yun-hong, chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, said over 30 percent of global pipelines now come from China.

The copycat label no longer fits, he said, urging Korean firms to pursue practical China ties while pushing for local active pharmaceutical ingredient (API) production.

But cost remains a sticking point. "Korea’s always been strong in formulation -- really top quality, world-class stuff," said one official familiar with several major biopharma associations.

“But do we have the capacity to supply the global market the way China does? That’s a different question.” Even Korean manufacturers, he added, rarely use ingredients made at home. “Korean APIs are too expensive.”

Nearly two-thirds of all APIs came from China and India as of 2023, where production remains cheaper than in Korea, Europe, or the United States.

The same Chinese executive, interviewed on condition of anonymity, gave the punch line. “Nearly all of the top 100 global pharma companies outsource R&D to Chinese contract research organizations (CRO).”

WuXi, Pharmaron and a handful of peers, he added, handle “70 to 80 percent of global preclinical work,” offering faster timelines, lower costs and “every technology platform you might need.”

Lee at KoreaBIO warns the window is closing. “Five years ago we still had things China needed. I count maybe three more years before even that window shuts.”

Discovery without a bridge

Korea consistently ranks among the world’s top 10 in biological research output, and Macrogen is building what it calls Asia’s largest genome hub in Songdo. Even so, executives say the mechanism that turns lab work into global drugs is missing.

Patent law explains part of the gap. Until 1987, Korea protected manufacturing processes, not molecules. Since SK chemicals introduced Sunpla in 1999 as the country's first locally developed gastric cancer drug, domestic companies have launched 39 new drugs, averaging about one per year.

Logistics add friction. Korean hospitals excel at early-phase safety trials, but multinational companies still send late-stage studies to California or Guangdong, where larger patient pools, stronger university funding, and more flexible trial infrastructure support faster enrollment.

A walkout by trainee doctors in February 2024 froze trials and knocked Korea’s share of industry-led studies to 3.46 percent as of 2024, according to data compiled by the Korea Drug Development Fund.

A 2023 report by the Korea Health Industry Development Institute found Korean drugmakers lag in innovation, with a first-in-class rate 14 points below their global peers. The agency urged companies to “rigorously evaluate novelty” and shift away from oncology, which still accounts for nearly a third of domestic pipelines.

Venture capital is pulling back. Korean startups raised 6.08 trillion won, or about 4.4 billion dollars, last year, down 27 percent from 2023, according to the market research firm The VC.

Healthcare drew 1.29 trillion won, or about 939 million dollars, a small gain that pales next to the $41.5 billion U.S. firms spent on Chinese assets in 2024, a record tracked by GlobalData.

The same Korean industry official, when asked about barriers to expansion, didn’t mince words. “Investment is the choke point. We have talent but only one domestic giant with deep pockets.”

That exception is Celltrion, whose 2024 revenue jumped 64 percent to 3.56 trillion won on soaring biosimilar sales.

Even Celltrion hedges. In January 2024, it expanded an earlier pact with WuXi XDC, the antibody-drug conjugate arm of WuXi Biologics. Dong-A’s ABTis signed a fresh deal in March, while LigaChem Biosciences followed with an extension in February.

Trust deficit, capital surplus

Industry leaders on both sides of the Yellow Sea agree that collaboration is the rational next step, yet few joint programs exist. “Korea has zero formal R&D calls with China,” Lee said. “But China’s right there, and we’ve got nothing going on. That is political.”

A 2024 survey found more than 6 in 10 South Koreans view relations with China as poor, down from 78 percent the year before but still stark for neighbors two hours apart by air. 

Korean boards fear intellectual-property leakage. Chinese dealmakers complain that Korean licensors demand defensive terms. Executives on both sides, speaking privately, say contracts often stall after signature.

Several Korean firms active in China contacted by KBR declined to comment publicly.

A spokesperson for a major Korean drugmaker, granted anonymity, cited the usual hurdles -- “political tensions, fast-rising Chinese capabilities, and fear of leaks. Contracts can still fall apart after signing, so follow-through is always a pain.”

A second industry source from a biotech company, also unnamed, was sharper. “Once they see profit potential they take over. Not just Korea -- this happens to non-Chinese firms in general,” he said.

Deal-making, he added, can be brutal and often ends in betrayal. “That’s just how China operates.”

Chinese managers counter that Korean pipelines lag global trends. “Chinese regulators can authorize first-in-human stem cell studies before the FDA even sets a meeting,” the same CRO executive said in our interview.

Korean companies, he added, arrive with little cash and rigid timetables. “They feel like where China was in 2010.” Yet he acknowledged the limits of China’s edge. “Original science often starts in Japan or Korea,” he said. “We are fast followers, not early explorers.”

Why engagement still beckons

Despite the nerves, the business case for cooperation keeps growing. Korea began reimbursing Tevimbra (tislelizumab) in April -- the first immunotherapy to win that benefit for esophageal cancer -- as its Chinese developer, now rebranded as BeOne Medicines, expands global operations and deepens its presence in markets like Korea.

Korean drugmaker Hanmi Pharmaceutical is finishing a 140-million-dollar campus near Beijing Capital Airport, with city officials assigning dedicated staff to assist with permitting and regulatory approvals.

Biotech HLB, hampered by lapses at a Suzhou factory operated by its Chinese partner Hengrui, still sees the city as the fastest route to resolve manufacturing issues for its liver-cancer regimen.

Even in China every milestone has a sequel. The same March study that celebrated 256 approvals warned that fewer than one drug in four reaches the National Reimbursement Drug List, and those that do often accept discounts near 70 percent. Foreign makers choose between margin and volume. Domestic firms must raise quality to cross the bar.

Outside Korea, time is short. A recent report from U.S. investment bank Stifel counts more than 4,100 innovative drugs in China’s pipeline, about 31 percent of the global total. The U.S. leads with 35 percent, but the gap is narrowing.

Korea claims 10 percent, rising only in cell therapy where its hospital data and quick manufacturing help.

Lee repeats a timeline in every briefing: Korea has perhaps three years to embed itself in China’s supply chain before the opportunity fades. He tries not to sound alarmist, but his anecdotes carry urgency. When he emails a Chinese counterpart at noon on a Saturday, he said, the reply often arrives by two. “Who in Korea works weekends now?” he asked.

Some officials bristle at the fatalism. Others see pragmatism. In April, Korea sent eight biotechs to China on a tour with AstraZeneca. Kim Yong-woo, who helped lead the trip, called it a prototype for programs “immune to weather.” Still, he admitted that without money and trust, tours become photo albums.