Outsourcing Property Rights: How China Sustains Pharmaceutical Innovation Under Domestic Cost Control

Speaker: Victoria Liu, PhD candidate in Political Science, Stanford University

China is the world’s second-largest biotech innovator, yet it enforces some of the most aggressive drug price controls. National procurement reforms since 2019 have cut drug prices by over half, significantly reducing the profit margins typically required to fund R&D. How does China sustain a booming biotech sector while enforcing aggressive domestic price controls? I show that Chinese pharmaceutical industry thrives by “outsourcing property rights.” Chinese firms utilize domestic resources for early-stage R&D, but rely on overseas licensing to capture revenue. This allows the state to enforce severe cost-containment at home while firms monetize their innovation on the global market.

About the Workshops

Our Young Researcher Workshops offer emerging China scholars an opportunity to engage directly with interdisciplinary faculty and peers from across campus to discuss and receive feedback on their research. Each workshop features one or several PhD students presenting their latest empirical findings on issues related to China’s economy. Past topics have included college major selection as an obstacle to socioeconomic mobility, the effect of a cooling-off period on marriage outcomes, and factors contributing to government corruption. Faculty and senior scholars provide comments and feedback for improvement. This event series helps to build and strengthen Stanford’s community of young researchers working on China.

Workshops are held on select Fridays from 12 - 1 pm. Lunch will be provided! 

Visit the Young Researcher Workshops webpage for more information on the content and format of the series and to learn how to sign up to present.