Eli Lilly strikes a $3 billion Chinese drug deal

In April, President Trump signed an executive order slapping 100% tariffs on patented pharmaceutical imports. The idea: force drugmakers to bring manufacturing back to American soil — an America First bet that U.S. medicine should be made in the U.S.

Two months later, one of the country's biggest pharmaceutical companies cut a nearly $3 billion deal with a company in Beijing.

On Friday, Eli Lilly struck a research agreement with Beijing-based Haisco Pharmaceutical worth up to $3 billion — though neither company disclosed which diseases the drugs are meant to treat.

Shipments of gray-market GLP-1s from China surged 44% in January alone.

According to a Haisco press release, the deal covers "up to five innovative target programs" across "multiple therapeutic areas." The arrangement is simple: A Chinese biotech finds the drugs; an American pharma giant bankrolls them. Haisco gets $87 million up front, with the rest of the nearly $3 billion tied to milestones and a cut of future sales.

"This collaboration is highly aligned with our international development strategy and is expected to generate sustainable value and long-term returns. By partnering with a global biopharmaceutical leader such as Lilly, Haisco aims to accelerate the global development of innovative therapies and deliver high-quality treatment options to patients worldwide," said Dr. Pangke Yan, chief executive officer of Haisco, in the release.

Lilly has been on a buying binge fueled by blockbuster profits from its weight-loss drug Zepbound. Hours after the Haisco announcement, the Indianapolis company licensed a drug for short bowel syndrome from Korea's Hanmi for $1.2 billion. Earlier this year, Lilly signed an $8.5 billion collaboration with China's Innovent Biologics to develop cancer and immune system drugs.

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Michael Siluk/UCG/Universal Images Group/Getty Images

Zepbound costs over $1,000 per month without insurance — and Trump struck deals to bring that down to $245 for Medicare patients and $350 through TrumpRx. But shipments of gray-market GLP-1s from China surged 44% in January alone, as everyday Americans turned to Chinese suppliers offering the same compounds for as little as $50 a vial.

Lilly is not alone. New York-based Pfizer struck a $10.5 billion deal with Innovent — the same Chinese biotech Lilly just partnered with — to develop 12 cancer drugs. North Chicago-based AbbVie struck a $745 million deal with Haisco for two non-opioid pain treatments. U.S.-based Frazier Life Sciences licensed a Haisco lung disease asset for up to $955 million in January.

More than half of large pharmaceutical companies' licensing agreements this year have come from China, up from 39% last year and just 5% in 2022.

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