Fri. Jun 5th, 2020

China attracts pharmaceutical R&D investment, because of a future of “Made in China” medicine?

Establishing an R&D center in China has now become a vital task for major pharmaceutical companies in the world.


Large pharmaceutical companies from all over the world are flooding into China. They are building a series of R&D centers to exploit the advantages of this 1.3 billion people.

Sanofi, a French multinational pharmaceutical company, has just opened an R&D center in Chengdu. This is also their first R&D center in Asia. The company plans to spend 66 million euros ($ 73.6 million) in the southwestern city of China to conduct a series of studies on diabetes and immune disease.

China’s huge population size will help pharmaceutical companies like Sanofi to easily recruit enough volunteers to participate in clinical trials, especially drug tests for rare diseases.

And although the US and China are facing a trade war, their entire pharmaceutical industry is still in peace. Pharmaceutical companies are still encouraged to invest in China. And when China imports drugs from the US, these drugs are not taxed by Beijing.

In recent years, China is gradually losing the advantage of a global production center due to rising labor costs. However, pharmaceutical corporations still see potential in this country.

They are bringing each other to China to expand their R&D activities.

Upjohn, a unit under the US pharmaceutical company Pfizer, has just established its global headquarters in Shanghai in May. Upjohn is conducting studies to build a patient follow-up database and the side effects of drugs that affect them.

Shionogi & Co. Japan is developing some of its new drugs in China. These drugs were even tested in China before in Japan, the United States and Europe. Shionogi & Co. is collecting data to prove safety and feasibility before conducting clinical trials for tuberculosis treatment.

Last year, China’s pharmaceutical market reached US $ 137 billion, an increase of 240% compared to 2008 according to IQVIA data. China has become the world’s second largest pharmaceutical market after the United States. They are expected to continue to grow to reach 170 billion USD by 2023.

At the same time, Beijing continuously has many moves to invite drug developers around the globe.

The first is to build strict standards on par with advanced countries. In 2017, China joined an international agency, working together to reach consensus on technical quality parameters. Applicable to the United States, Europe and Japan.

In addition, they relaxed restrictions on the use of clinical trial data from abroad. The number of drugs queued for licensing also increased. When China adopted a fast tracking system to approve advanced drugs, they shortened the approval process with a new drug to 1-2 years.

Typically in December last year, China became the first country to approve roxadustat, a treatment for anemia caused by chronic kidney disease. The drug was developed by AstraZeneca, a British pharmaceutical company and FibroGen, a US biochemical company.

Until now, roxadustat is still undergoing clinical testing procedures in the United States and Europe. Meanwhile in Japan, this drug is also waiting for approval.

In studies of stomach cancer and many common digestive problems in Asia, China can now serve as a big stage.

Studies of re-use of drugs – using licensed drugs for new medical purposes – are flourishing in the West. This wave will probably start seriously in China too.

Drug manufacturers now consider establishing an R&D center in a country of 1.3 billion people a vital task. If they cannot, they will lose their competitive advantage with other companies.

Takeda, Japan’s largest company, is planning to develop China into its fourth most important strategic market, behind Japan, the United States and Europe.

In the next 5 years, the company plans to introduce 10 new products in China. Chairman Barshe Weber said it was enough time for Takeda to accumulate data and new knowledge from China.

Obviously, in every pharmaceutical company ‘s development plan now, China is a strategic location where they definitely have to set up an R&D facility. Unlike rising labor costs, pharmaceuticals in China are still a promising land.

While consumer electronics and smart phones have been booming from this country, the “Made in China” drug has yet to prove its worth.

To improve the situation, the Chinese government is expanding the “Made in China 2025” initiative into the bio-pharmaceutical sector. The goal remains unchanged: Attracting foreign investments, relying on that wave to enhance the capacity of Chinese drug manufacturers themselves.

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