The drugmaker said in a statement that it reached a cooperation framework agreement with Sinopharm that grants the Chinese company distribution and exclusive import rights of the medicine in the China mainland market.
Merck also said it will allow China National Biotec Group, an affiliate of Sinopharm, to make the drug in China and has agreed to transfer technology to help with that production.
Molnupiravir is sold under the brand name Lagevrio in the U.S. Merck developed the pill - and shares the profits equally - with partner Ridgeback Biotherapeutics.
The antiviral pill was once touted as a potential game changer for treating COVID-19, but Paxlovid, a rival drug made by Pfizer Inc, had significantly better results in its clinical trial and has been much more widely used in the United States.
(Reporting by Michael Erman; editing by Jonathan Oatis)