A bloody shake-up of RMB 329.1 billion! A seismic shift in pharmaceutical marketing

In stark contrast to the retrenchment by these enterprises, leading traditional Chinese medicine (TCM) companies are launching aggressive offensives. China Resources Sanjiu’s sales expenses surged from RMB 6.965 billion in 2023 to RMB 9.089 billion in 2025—a year-on-year increase of 25.88%. Behind this surge lies not only sustained investment in its own brands but also mergers and acquisitions—such as the integration of Kunming Pharmaceutical Group. Although consolidation has inflated overall expense ratios, the long-term trend shows a marked improvement: the sales expense ratio declined from 36.78% in 2020 to 27.87% in Q3 2025, reflecting strong economies of scale and channel synergy. The sharp contrast between China Resources Sanjiu—which spends billions annually—and numerous small- and medium-sized pharma firms spending less than RMB 100 million on sales highlights the ‘polarized reality’ facing the TCM industry: ‘ice and fire.’ While cost-control trends have cascaded from industry leaders down to laggards, the latter now confront existential crises. Among the 30 TCM companies that have disclosed their 2025 sales expenses, only 13 reported growth—a possible harbinger of further industry consolidation, heralding a wave of M&A led by giants, where ‘big fish eat small fish’ and ‘fast fish eat slow fish.’ The Future Battle: From ‘Marketing-Driven’ to ‘Value-Anchored’ Looking back from 2026, the past three years’ ‘reshuffling’ of sales expenses was merely the overture to the pharmaceutical industry’s broader transformation and upgrading. For all market participants, the old model—relying on ‘gold-laced’ sales and high-cost marketing—has reached its end. Going forward, only those who first succeed in shifting from ‘marketing-driven’ to ‘R&D-driven’ and ‘value-anchored’ strategies will truly navigate through economic cycles—and secure their entry ticket into the new era. The sustained contraction of sales expenses alongside steady growth in R&D investment has become an irreversible industry trend. In 2025, while A-share pharmaceutical and biotech companies saw sales expenses dip marginally by 0.15% year-on-year, R&D expenses rose by 5%. This ‘one-down, one-up’ dynamic signals a fundamental reallocation of industry resources—from marketing toward innovation. For instance, Northeast Pharmaceutical reduced its sales expenses by 8.49% year-on-year while increasing R&D investment by 46.28%, underscoring its firm commitment to transitioning from marketing-driven to innovation-driven operations. This shift is the inevitable outcome of the combined forces of policy, market maturity, and technological advancement. Volume-based procurement (VBP) and anti-corruption campaigns have completely shut down ‘gold-laced’ sales; meanwhile, increasingly sophisticated consumers now prefer innovative drugs with proven clinical value. Boosting R&D investment and building differentiated, innovative product pipelines have thus become the only viable path for pharmaceutical companies to achieve sustainable, long-term value growth. Looking ahead, what ‘trump cards’ must companies hold to survive and thrive across cycles? First, ‘dimensional warfare’ via digital marketing. Moving beyond traditional manpower-intensive tactics and relationship maintenance, companies must leverage big data, artificial intelligence, geospatial analytics (GEO), and other technologies to build precise physician profiles and deliver personalized academic content—establishing a low-cost, high-efficiency, fully traceable digital marketing system. Second, shifting from ‘relationship-driven’ to ‘value-delivery’ models. The foundational logic of sales is undergoing a fundamental transformation—from purely cultivating customer relationships to delivering evidence-based clinical value. The role of professional academic promotion teams—such as Medical Science Liaisons (MSLs)—is becoming increasingly critical. By disseminating the latest clinical research findings and treatment guidelines, they empower physicians to make optimal therapeutic decisions.

Compliance as the foundation, AI as the engine: China’s pharmaceutical marketing enters a new ‘value-reconstruction’ cycle in 2026

In 2026, regulatory compliance in China’s pharmaceutical industry exhibits the distinct features of ‘end-to-end traceability across the entire supply chain’ and ‘strict, high-impact penalties.’ At the beginning of the year, bidding for follow-up procurement under the first eight batches of the National Drug Procurement Program commenced; the procurement cycle for 316 commonly used drugs has been stabilized until the end of 2028, and price transparency has drastically compressed the profit margins previously sustained by traditional marketing practices. In May, the newly revised Implementation Regulations of the Drug Administration Law officially took effect, clearly defining the scope of practice for pharmaceutical representatives and mandating full documentation—‘audit trails’—for all academic promotion activities and associated expenditures, significantly raising the cost of noncompliance. Meanwhile, the nationwide rollout of Diagnosis-Related Groups (DRG) and Disease-Severity Index Payment (DIP) reimbursement models has transformed hospitals from ‘revenue centers’ into ‘cost centers,’ prompting physicians’ prescribing behavior to prioritize clinical value and health-economic evidence. Against this backdrop, compliance is no longer a ‘bonus point’—it is the enterprise’s ‘lifeline.’ Likewise, digitalization is no longer a nice-to-have embellishment; it has become the core means to ensure compliance and mitigate regulatory risks. Market Front: Bipolar Competition Landscape and Value-Oriented Market Logic China’s pharmaceutical market in 2026 is evolving into a game of ‘precision competition.’ Multinational pharmaceutical companies—leveraging mature digital infrastructure and global resource advantages—are accelerating the localization and adaptation of their digital capabilities, focusing on precision marketing in high-barrier therapeutic areas such as oncology and rare diseases. Domestic industry leaders are ramping up digital investments, gradually narrowing the gap with multinationals. Innovative biopharma firms are leveraging digital tools to achieve ‘overtaking on curves,’ prioritizing patient services and academic promotion. Meanwhile, small- and medium-sized enterprises (SMEs), constrained by limited resources, are progressively concentrating on ‘specialized, niche domains,’ adopting lightweight digital tools to reduce operational costs. Concurrently, the importance of the ex-hospital market continues to rise: online channels are expanding rapidly; prescription diversion has peaked; and patient outreach methods have become increasingly diversified. Traditional ‘manpower-intensive’ approaches can no longer meet the demands of omnichannel marketing—digitalization has thus become the core lever for pharma companies to integrate channels, reach target audiences precisely, and improve conversion rates. Moreover, heightened patient health awareness and growing demand for personalized, professional healthcare services are compelling pharmaceutical companies to pivot from a ‘product-sales orientation’ to a ‘patient-value orientation.’ Digitalization has become the essential bridge linking pharmaceutical companies, healthcare institutions, and patients. Technology Front: AI Maturation and Deployment—From Conceptual Exploration to Tangible Value Creation In 2026, AI applications in the pharmaceutical sector have transitioned from ‘conceptual exploration’ to ‘large-scale, real-world deployment.’ Large language models (LLMs), machine learning, natural language processing (NLP), and other technologies are deeply integrated into pharmaceutical marketing scenarios, driving intelligent upgrades across the entire marketing value chain. Compared with earlier stages, AI applications are no longer confined to basic data statistics and analysis. Instead, they have achieved breakthroughs in ‘precise prediction, intelligent decision-making, and personalized outreach’—spanning customer insights and content generation to decision support; patient stratification and follow-up management to compliance risk control. AI is progressively replacing humans in performing repetitive, low-value tasks—enhancing marketing efficiency and accuracy while simultaneously reducing compliance risks. Furthermore, enhanced data collection capabilities and advances in analytical techniques have made data-driven decision-making the industry norm. The ability to manage data as a strategic asset has become one of the core competencies distinguishing leading pharmaceutical enterprises. The synergistic application of cloud computing, big data, blockchain, and other technologies has further strengthened the technical foundation of digital pharmaceutical marketing—ensuring data security and regulatory compliance, and providing robust support for AI-powered transformation.

Drugmakers tap China AI app boom to reach doctors as crackdown upends marketing

13 hours ago

Chinese drugmakers are shifting marketing strategies to AI-powered health apps following a regulatory crackdown on traditional doctor engagement. Tech giants like Alibaba Health and JD Health are facilitating digital academic promotion to replace offline sales tactics.

reuters

2026-11-10

Drugmakers tap China AI app boom to reach doctors as crackdown upends marketing

Drugmakers tap China AI app boom to reach doctors as crackdown upends marketing

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