Pharma heads east

There’s nothing new in the fact that pharmaceutical companies are working without borders, seeking to capitalise on technologies and resources anywhere in the world that advances a sector constantly moving forward in search of innovation. And, given the support of the likes of giants such as Roche, Pfizer, GSK and Novo Nordisk, China has become the epicentre for a biopharma sector in the move. In the past years, the Chinese government has doubled its support for biotech, investing heavily to stimulate the sort of innovation that will not only meet huge domestic healthcare needs but to grow its reputation on the world stage.

Between 2017 and 2021 alone, China recorded the largest number of new trials, many involving western companies.

Another incentive for western biotechs on the move has been the effect of the country’s 2018 regulatory reforms which have helped to accelerate drug approvals in the country, thereby leading to faster development, all of which has increased global recognition. According to a recent Novotech/GlobalData report, those reforms “allow acceptance of foreign clinical trials data for drug approval, making it easier for foreign companies to enter the Chinese market. China’s clinical development regulations are aligned with the United States Food and Drug Administration (USFDA) regulations and present several benefits to western biopharma companies.” More recently, patent reforms, including the introduction of patent term extensions for drugs and the patent term compensation system, are also likely to appeal to foreign companies. Then there is the abundance of skills, something that has its roots in locally-produced talent and those returning from studying overseas, the level of corporate-academic collaborations and, of course, the sheer size and diversity of its patient population. Western companies can take advantage of the Marketing Authorisation Holder designation as a way of gaining access to the Chinese market without needing to set up their own manufacturing facilities.

Astrazeneca is a case in point. CEO Pascale Soriot told Bloomberg: “China has become a fundamental part of our industry globally in terms of innovation. It has become a very important country and we believe it will remain a very important country for us and for the entire industry. You have enormous innovation and a very strong focus of the government on building life sciences as well.”

The company, with its global R&D centre in Shanghai, first established a presence in China in 1993 and now employs more than 14,000 people in medical research in five offices and two manufacturing plants. It has brought 30 innovative drugs to the country and has invested around three-quarters of a billion dollars in pharmaceutical innovation.

An indication of the speed with which China’s presence has grown can be found in the age of the major players. Sinopharm Group, the largest member of the China National Pharmaceutical Group, was established only in 2003. It manages factories and distribution networks throughout the country. Similarly, Jiangsu Hengrui Medicine was established in 1970 and has grown to become the largest research and manufacturing base of antineoplastics and surgical medicine. Other top ten players, such as Guangzhou Baiyunshan Pharmaceutical and Huadong Medicine were founded in 1992 and 1993 respectively.