Multinational pharmaceutical companies are encountering mounting challenges in China’s vaccine sector, according to GlobalData’s Q2 2025 Emerging Market Outsourcing Report. Heightened regulatory scrutiny, intensifying local competition, and shifting consumer preferences are reshaping the landscape, prompting key players like Merck & Co. and GlaxoSmithKline (GSK) to revise their strategies.

Merck recently reported a 17% decline in sales of its HPV vaccine Gardasil in China, citing increasing price pressure from domestic manufacturers and the impact of China’s ongoing anti-corruption drive in the healthcare industry. In response, the company has temporarily halted Gardasil sales in the country until mid-2025—a move that signals growing market volatility.

GSK has also responded to market headwinds by restructuring its distribution agreement for its shingles vaccine Shingrix, reflecting the need for operational flexibility amid evolving regulatory and commercial dynamics.

The report highlights that domestic pharmaceutical firms in China are increasingly capturing market share with competitively priced alternatives, while regulatory oversight has intensified, targeting procurement practices and hospital sales, which has made it difficult for global players to maintain their foothold.

Meanwhile, in India, the government is reportedly planning to introduce a minimum import price (MIP) for certain pharmaceutical raw materials to curb the influx of low-cost Chinese imports. While this protectionist measure aims to support domestic manufacturing, it could drive up production costs for generic drugmakers.

“This would be particularly challenging for generic drugmakers operating on thin margins,” said Leyla Hasanzadeh, Research Analyst, Health Economics and Market Access at GlobalData.

The Emerging Market Outsourcing Report provides quarterly insights into key trends shaping pharma manufacturing in regions like China, India, Latin America, the Middle East, and Eastern Europe. It tracks CDMO activity, including mergers and acquisitions, investments, and regulatory inspections impacting global supply chains.