Abstract:Innovation is the only way for China to transform from a " huge country of pharmacy" to a "medical power". Because of the lack of innovation capacity of pharmaceutical enterprises, it has hindered China"s novel drugs. And the cooperation of pharmaceutical enterprises and university-research institutions is necessary. By establishing an evolutionary game model between pharmaceutical enterprises and university-research institutions, this paper analyzes the dynamic evolution process of their strategic choices when government participate and factors. Therefore, in order to promote the development of novel drugs in China, it is necessary to increase the government"s financial support, improve the patent protection system, build a cooperation platform for pharmaceutical enterprises and university-research institutions, and improve the laws and regulations.