Despite geopolitical obstacles, US pharmaceutical companies are quickly licensing Chinese experimental medications and closing billion-dollar deals to expand pipelines.

According to new statistics, US pharmaceutical companies are rapidly licensing Chinese compounds for possible new drugs in the hopes of converting initial payments of as little as $80 million into multibillion-dollar therapies.

As of June, 14 agreements for a total of $18.3 billion have been inked by American pharmaceutical corporations to license medications from Chinese companies. According to GlobalData data, this compares to just two similar purchases during the same period last year.

This rapid pace is expected to continue as US pharmaceutical companies strive to create new drug pipelines to replace $200 billion worth of pharmaceuticals that are expected to lose their patent protection by the end of the decade, according to bankers, analysts, investors, and a representative of the pharmaceutical sector.

According to Mizuho analyst Graig Suvannavejh, they are discovering extremely high-quality assets coming from China at significantly lower costs than they might find for a comparable product in the US. According to GlobalData, over the previous five years, the average cost of licensing agreements, which include small upfront payments and later greater payouts, was $84.8 billion in the United States and $31.3 billion in China.

A licensing deal reduces development risks by giving one business the right to create, produce, and market another's pharmaceutical goods or technologies in return for future target-based, or milestone, payments. According to a March analysis by pharmaceutical data provider Citeline, China now accounts for about 30% of worldwide drug development, while the United States has lost 1% of its share to roughly 48%.