Impact of China’s drug innovation policy on patent quantity and quality: Evidence from a representative chemical pharmaceutical enterprise

The number of patent applications reflects the intensity of innovation activity, and patent quality indicates the level of innovation capability. Both indicators are used to evaluate the effectiveness of pharmaceutical innovation policies. This study uses firm-level panel data from listed chemical pharmaceutical enterprises (2013–2022) to examine whether such policies have incentivized the quantity or quality of patents in China. Patent quantity is measured by the number of invention applications and patent quality by the number of granted invention patents, supplemented by international patent applications and patent examination efficiency. The synthetic control method (SCM) is used to assess policy effects across different stages. The results show that the policies significantly increased patent quantity in 2015–2016 and improved patent quality in 2017–2021, with more sustained impacts on quality. The early-stage effects were driven by fiscal subsidies, whereas later improvements in quality stemmed from enhanced examination efficiency and internationalization strategies. • Empirically evaluates China's pharmaceutical innovation policy using SCM. • Policies enhance patent quality more sustainably than patent quantity. • In early stages, patent quantity growth is driven by financial subsidies; later, patent quality improves through enhanced review and approval efficiency and PCT influence. • This study offers empirical evidence to support optimizing drug innovation incentive mechanisms at national and corporate levels.