China’s new framework for advanced biomedical technologies could reshape how cell and gene therapies (CGTs) reach patients in one of the world’s most active biotech markets. State Council Order No. 818 took effect on May 1, 2026, and establishes China’s first national framework for the clinical research and translational application of new biomedical technologies, including cell therapies, gene therapies, gene editing, stem cell technologies, tissue engineering, and other emerging medical approaches.
For cell and gene therapy companies, the most significant change may be commercial. Order 818 sits alongside the traditional drug approval pathway supervised by the National Medical Products Administration (NMPA), creating a dual-track system. Products can still move through the conventional drug route, while certain technologies may now be developed and clinically translated through qualified hospitals under the National Health Commission (NHC).
“For the first time, China has a legal commercial pathway for cell and gene therapies that do not need to become marketed drug products,” said Boyang Wang, founder of Singapore-based longevity fund Immortal Dragons.
The regulation addresses a long-standing problem in China’s biotech ecosystem: strong clinical research activity in advanced therapies, but limited legitimate options to translate that work into domestic commercial use. For foreign companies, it raises practical questions about partnerships, local sponsorship, data flows, manufacturing, and whether China is building a commercialization model for CGTs that differs from the standard drug-development path used in the U.S. and Europe.
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Order No. 818: a frame for CGT commercialization in China?
China’s cell and gene therapy ecosystem expanded faster than the framework surrounding it. The country became very active in advanced therapy research, but the path between hospital-based clinical work and commercialization remained unclear.
Many therapies continued to follow the traditional NMPA drug approval route, but parts of the field also evolved through investigator-initiated trials, hospital programs, and local pilot projects that operated in a regulatory gray area. That created a difficult environment for companies trying to build long-term businesses around highly personalized therapies.
With Order 818, qualified hospitals can now conduct clinical research on new biomedical technologies under the supervision of the National Health Commission (NHC). This is important for cell and gene therapies that are difficult to standardize as mass-market pharmaceutical products. Conventional NMPA pathway can take five to eight years and may not always fit individualized therapies closely tied to hospital infrastructure and short manufacturing timelines.
Wang argued that China’s previous framework created what he called an “innovation without translation” bottleneck. “China has produced a substantial share of global CGT clinical research over the past decade, but lacked a legitimate domestic commercialization route, pushing significant innovation into outbound licensing or expatriate company formation,” he said.
Wang explained the regulation is also intended to tighten oversight of a fragmented cell therapy landscape that had become associated with unproven anti-aging and stem cell interventions offered through aesthetic clinics and private facilities. Han Kun similarly noted that Order 818 is expected to significantly tighten the regulatory environment surrounding investigator-initiated trials involving stem cell and somatic cell therapies.
Order 818 limits eligible institutions largely to top-tier hospitals and introduces sponsor domicile requirements and stronger penalties for illegal activity. “This is less about creating new privileges and more about ending a long period of regulatory ambiguity that had paralyzed legitimate development,” Wang said.
Beyond regulation and enforcement, Wang also sees a broader industrial objective behind the framework. “Biotechnology is among China’s designated national priorities. Order 818 is the regulatory infrastructure to achieve better biotechnology developments,” he said.
China’s new path for CGTs
Order 818 does not replace China’s traditional drug approval system; it creates another route for technologies that may not fit neatly into the standard pharmaceutical model.
Some products can be standardized, manufactured at scale, and developed like conventional drugs. Others are more individualized and processed under tight time constraints, and delivered through specialized clinical centers.
Wang said that before Order 818, CGT companies in China effectively had one route, the NMPA’s full drug approval pipeline, which he described as “long, expensive, and less compatible with highly personalized therapies.” Under the new framework, he said, “standardizable products remain on the NMPA drug route, while individualized therapies that resist mass production are channeled to the NHC route.”
Order 818 creates a parallel commercialization pathway for technologies acting at the cellular or molecular level, including personalized cell therapies and gene editing applications. This could allow CGTs to move from clinical research into clinical use through qualified hospitals rather than waiting for the full national drug approval process.
Order 818 does not allow companies to charge participants during clinical research, but once a technology receives approval for clinical translation, hospitals may charge patients for its use, according to Morgan Lewis.
Hospitals are a central part of the business model and not only a trial site. For therapies with short viability windows, complex handling requirements, or individualized manufacturing, the ability to connect clinical centers, GMP production, and patient delivery becomes a commercial advantage.
Wang expects this to push the field toward what he called hospital-adjacent manufacturing. “The short cell viability window for CGT products favors integrated hospital-GMP-CDMO clusters like those emerging in Chengdu, Shanghai, and Hainan,” he said.
That could change how Chinese CGT companies think about development. The decision will now be about whether a product is better suited to the traditional drug pathway or a more hospital-centered clinical translation model.
“The strategic question for Chinese CGT companies is no longer ‘how fast can we file?’ but ‘which track maximizes our specific product’s biology and commercial potential?’” Wang said.
This is also why the framework is being watched outside China. If the pathway works as intended, it could give certain advanced therapy developers a faster or more practical way to generate clinical use, revenue, and real-world evidence in China. For foreign companies, however, the same system also raises questions about local sponsorship, partnerships, manufacturing, and whether existing licensing agreements are built around the right regulatory milestones.
What it means for biotech business models
For Chinese biotech companies, Order 818 arrives at a moment when global interest in China-originated assets is rising sharply. In 2025, the value of out-licensing deals signed by companies in Greater China rose nearly tenfold from 2021 to $137.7 billion. Global drugmakers, including Novartis, Merck, GSK, AstraZeneca, AbbVie, and Pfizer have all turned to Chinese-developed assets as they look for new pipeline opportunities.
That boom has validated China’s biotech sector, but it also raises the question of how much of that value remains in China. Wang said the pressure to license assets abroad was partly structural. “Innovators have been structurally pushed toward out-licensing or offshore incorporation because the domestic commercialization routes were either too slow or too legally ambiguous.”
If Chinese developers can move advanced therapies into the clinic through hospital pathways, they’ll have more room to generate data, and commercial validation before deciding to partner internationally. “If the framework enables efficient hospital-biotech collaboration with predictable timelines, innovation has a reason to stay,” said Wang.
Of course, licensing will not disappear, and recent deals suggest the opposite. Pfizer’s agreement with Innovent, announced just three days ago and worth up to $10.5 billion, gave Pfizer access to 12 early-stage cancer programs, with Innovent leading phase 1 development before Pfizer takes over global development. The deal followed a wider pattern of multinational companies looking to China for experimental medicines, often at a time when large pharma companies are under pressure from patent expirations and R&D cost constraints.
But Order 818 could influence when and how Chinese companies seek those deals. Instead of licensing early because domestic commercialization is unclear, some companies may be able to build more value locally first.
For foreign biotech companies, the message is more complicated. China may become a more structured and commercially attractive CGT market, but not necessarily an easier one to enter directly.
Wang described the effect as “both, simultaneously.” For companies relying on “regulatory arbitrage, cross-border data flow, or wholly-owned operational control,” he said, China has become “materially more difficult.” For developers willing to commit to local manufacturing, Chinese clinical data generation, and partnership structures, he argued, the market has become more attractive because the regulatory uncertainty has dropped substantially and the clean-up of the gray market could expand the opportunity window.
Morgan Lewis’ analysis of the regulation noted that Article 10 of Order 818 requires the clinical research sponsor to be a legal entity established in China. It also warned that foreign-invested enterprises face uncertainty because China’s Negative List continues to restrict foreign investment in the development and application of human stem cell and gene diagnosis and treatment technologies, outside specific pilot zones. The firm suggested that multinationals may need to rely on licensing to domestic Chinese entities, Chinese-controlled joint ventures, or NMPA product-registration strategies while waiting for clearer guidance.
On the data collection side, China’s human genetic resources rules restrict foreign organizations from collecting, preserving, or transferring Chinese human genetic resources abroad without Chinese partners and regulatory approval. A counterpart to this, the U.S. FDA announced in June 2025 that it would halt new clinical trials involving the transfer of American patients’ living cells to China and other “hostile countries” for genetic engineering and reinfusion.
What Order 818 says about China’s biotech ambitions
Order 818 also says something about the kind of biotech power China is trying to become. That momentum around licensing deals has made China more visible as a source of drug candidates. Order 818 points to building the regulatory and clinical infrastructure needed to develop, test, and potentially commercialize advanced therapies inside China.
Wang is careful not to frame this as China overtaking the U.S. across the biotech sector. “China is unlikely to displace the United States in first-in-class target discovery or foundational scientific breakthroughs, where the American academic system retains structural advantages,” he said.
Instead, he sees China’s potential advantage in areas where scale, infrastructure, and execution are particularly important. He pointed to clinical research scale, enrollment speed, real-world data generation, manufacturing cost structure, and Asian-specific phenotypic data as areas where China could become particularly competitive.
The geopolitical environment adds another layer of complexity. The biotech tensions between the U.S. and China have become more concrete, with regulators paying closer attention to reliance on Chinese partners when it comes to biotechnology. However, cross-border collaboration has not stopped.
Order 818 may make China more difficult for companies seeking direct control or simple cross-border development strategies. But it could make the country more attractive for companies willing to work with Chinese partners, generate Chinese clinical data, and plug into hospital-linked development and manufacturing networks.
For Wang, success will be measured by the practical implementation of the framework. Success would mean the first projects completing the full cycle from filing to translational approval, a cleaner market after gray-zone operators exit, and a more stable ecosystem connecting hospitals and domestic biotechs.
In five years, he said, China could become “the most clinically active CGT research market globally,” with more China-originated therapies that have cross-border commercial potential. Failure would look like a framework adopted on paper but slowed by hospital bottlenecks, unclear implementation, or approval timelines that make the new pathway less useful than the drug route it was meant to complement.
That uncertainty may be the right place to leave the story for now. Order 818 does not set in stone China’s position in global cell and gene therapy, but It does show that China is trying to shape the conditions under which CGTs are developed, commercialized, and kept within its own ecosystem for longer.
