The global trade landscape remains unpredictable with recent developments taking unexpected turns. Uncertainty created by evolving trade dynamics and regulatory scrutiny is bringing increasing pressure to bear on the life sciences sector. In the following article, we outline key updates that are particularly relevant to stakeholders in the life sciences industry.

1. Intensified antitrust enforcement in China’s pharmaceutical sector with individual liability on the rise

Recent enforcement actions:

  • March 2025
    • Three pharmaceutical companies were fined approximately RMB 223 million for collusion to fix prices and divide markets related to Neostigmine Methylsulfate Injection.
    • One individual directly responsible for implementing the collusion was fined RMB 500,000.
    • The first company to self-report and cooperate under the leniency programme received an 80% reduction in penalties.
    • This marks the first enforcement of individual liability since it was introduced in the 2022 amendments to China’s Anti-Monopoly Law.
  • April 2025
    • Four pharmaceutical companies were penalised approximately RMB 354 million for fixing prices related to Dexamethasone Sodium Phosphate.
    • General managers and the board chairpersons of these companies were fined RMB 600,000 per person.
    • The company that first applied for leniency received an 80% reduction in penalties.
  • May 2025
    • A pharmaceutical company was fined around RMB 3 million for obstructing an antitrust investigation.
    • Six associated individuals were held personally liable.

Key takeaways:

  • China’s antitrust authority intensified antitrust enforcement targeting the pharmaceutical sector since the issuance of the Anti-monopoly Guide for the Pharmaceutical Sector in January 2025.
  • Individual liability has become a common feature in cartel investigations, now present in all recent enforcement actions.
  • Companies that proactively self-report and cooperate with the investigation could benefit from significant penalty reductions under the leniency policy.

2. FDA expands unannounced inspections at foreign manufacturing facilities

On 6 May 2025, the US Food and Drug Administration (FDA) announced its plans to expand the use of unannounced inspections at foreign manufacturing facilities producing food, essential medicines, and other medical products for the US market.

Inspection trends:

  • Over the past three years, FDA inspections of Chinese drug and device manufacturers surged from eight to 200. Inspections resulting in “Official Action Indicated” findings rose from three to 23.

Key takeaways:

  • Despite the existing unannounced inspection pilot programme in China and India, Chinese drug and device manufacturers expect a notable increase in such unannounced inspections. The expanded use of the unannounced inspection pilot programme will certainly heighten compliance demands on Chinese manufacturers.
  • Chinese manufacturers should ensure they are ready for the increasing unannounced inspections by performing internal audits and focusing on previous findings by the FDA.

3. Trump executive order demands pharma industry price cuts

On 12 May 2025, Trump signed an executive order mandating the US government to negotiate drug price reductions with pharmaceutical manufacturers.

Industry implications:

  • If the US compels pharmaceutical companies to lower domestic drug prices, this could force Chinese innovative drug manufacturers to offset profit margins by raising prices in other markets.

4. Pause in the trade war

On 12 May 2025, the US and China jointly announced a mutual tariff reduction, leading to a 115% tariff decrease on each side and leaving only a 10% base rate of the reciprocal tariffs in place.

On 28 May 2025, the US Court of International Trade ruled against the Trump administration’s sweeping tariffs. The Trump administration filed an appeal and motion to stay enforcement of judgment pending appeal.

Industry implications:

  • This is a temporary relief for cross-border pharmaceutical supply chains. Stakeholders in the pharmaceutical sector should monitor the outcome closely and leverage the tariff pause to manage inventory planning.

The regulatory and trade environments affecting the life sciences industry are shifting rapidly. Companies operating in or engaging in China should keep alert to these changes and evaluate their compliance strategies and market entry plans.

5. Hong Kong as a Life Sciences Hub

As a major international hub and gateway between Mainland China and the rest of the world, Hong Kong has been implementing policies and strategies to enhance Hong Kong's efficiency and appeal as a hub for the life science industry. In the most recent budget speech, the Hong Kong government has specifically mentioned the following:

  • The Hong Kong Exchange is actively moving forward with the establishment of a dedicated "technology enterprises channel" (TECH) to facilitate the listing of specialist technology and biotechnology companies, especially those listed on the mainland.
  • The government will review the relevant tax deduction arrangements for various expenditures including the lump sum licensing fees for acquiring the rights to use IP, and related expenses incurred on purchase of IP or the rights to use IP from associates, which is expected to accelerate the development of IP-intensive industries and promote the development of IP trading in Hong Kong.