China’s Churning Out Revolutionary Cancer Drugs Much Cheaper Than the U.S.

Western companies last year began selling some of their hottest cancer drugs, called PD-1 inhibitors, with much fanfare in China. But rather than quickly conquering the mainland market, American drugmakers Merck & Co. and Bristol-Myers Squibb Co. have found themselves facing a surprising challenge: local competitors. Chinese companies are introducing patented cancer therapies in their home market based on PD-1 inhibitors, which use the body’s immune system to fight tumors. They’re doing it at far lower prices—sometimes a third of what U.S. drugmakers charge—which will likely give them a leg up at home. And their ambitions go far beyond the mainland, with several already preparing to sell their medicines in the U.S. and worldwide.

The push into PD-1 drugs marks one of the first forays by China’s pharmaceutical industry into complex treatments. It’s the coming of age for a local industry long focused on cheap generics and chemical ingredients, and it’s being aided by Beijing’s efforts to speed up drug approvals and channel more funding toward health care.