It is widely regarded that the pharmaceutical sector is quite different from other manufactures for its character in innovation activities.This paper analyzed the nature of innovation activities by multinational companies (MNCs) which stand for foreign capital,focusing on two parameters named :size and scope of innovation through investigating pa- tent data from 1985 to 2005.The paper reveals the role of the foreign capital and identifies their technology stratagem by developing a tool named Double-S Matrix.Research finding indicates that foreign capitals play an important role on o- verall national innovative competitiveness in this sector.Implications from this research can be used as reference to poli- cy makers and business companies in China.