Gardasil 9, RotaTeq, and Pneumovax 23 sit at the center of a restructured exclusive distribution and co-promotion agreement, between Chongqing Zhifei Biological Products Co., Ltd. (Shenzhen: 300122) and Merck Sharp & Dohme (Asia) Ltd., the Hong Kong-registered subsidiary of Merck & Co., Inc. (NYSE: MRK). The amended and restated deal replaces the original agreement signed January 21, 2023, and grants Zhifei exclusive rights to import, co-promote, distribute, and sell the three vaccines across mainland China under Merck's trademarks. The most consequential structural change is the removal of fixed minimum purchase commitments, shifting procurement to a fully flexible, order-based model through December 31, 2028.
Financial terms were not disclosed. Procurement under the prior agreement reached RMB 34.8 billion (around USD 5 billion) in 2023 and RMB 26.4 billion (around USD 3.8 billion) in 2024, before falling to a preliminary RMB 2.2 billion (USD 320 million) in 2025 amid stiff local competition and shifting market demand.
Deal context
Gardasil 9 has historically been the dominant commercial driver of the Zhifei Biological Merck agreement, accounting for the substantial majority of procurement value in prior years. The partnership, which the announcement states has been active since 2011, has supported expanded HPV vaccine access across mainland China and contributed to public health initiatives aligned with WHO cervical cancer elimination targets and China's Healthy China 2030 strategy.
The removal of minimum purchase commitments is the agreement's defining departure from its 2023 predecessor. Under the prior structure, fixed volume floors provided revenue visibility for both parties; the new model makes procurement entirely dependent on rolling purchase orders calibrated to market demand and vaccination uptake. For Zhifei, this reduces inventory risk and near-term financial obligations. The sharp contraction in 2025 procurement — from RMB 26.4 billion to RMB 2.2 billion — reflects market conditions that made the prior fixed-commitment structure difficult to sustain, and the restructured terms appear designed to preserve the partnership while accommodating reduced near-term demand. The agreement runs to December 31, 2028, with a two-year extension available upon mutual consent.
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