Numerous challenges persist within the industrial chain of Traditional Chinese Medicine (TCM), including issues related to unstable quality, limited capacities for scientific and technological innovation, weak brand competitiveness, and a low level of integrative development. Consequently, it is imperative to harness the relevance, growth potential, and catalytic effects of the TCM industry on economic and social progress. This necessitates exploring and implementing high-quality development strategies for the TCM sector. Utilizing a combination of interviews, theoretical modeling, and Qualitative Comparative Analysis (QCA), this study identifies critical drivers influencing the TCM industry and delineates pathways for optimizing its development. The research highlights multiple factors propelling the industry, such as environmental sustainability, technological advancements, branding, integration, and specialization. Based on these findings, three strategic pathways for optimization are proposed: leveraging technology and branding, enhancing green cultivation practices alongside technological proficiency, and fostering leadership through green and branded initiatives. These drivers collectively contribute to the robust development of the TCM industry. The study further suggests that different regions may adopt tailored high-quality development strategies and models based on local TCM resource endowments core and peripheral conditions. By aligning the existing developmental trajectories of the TCM industry with these regional variations, the selected optimization pathways can significantly promote its high-quality growth.