Most would agree that serious problems exist, and the path of China's economic juggernaut is not unobstructed. China's pharmaceutical
industry continues to experience serious, basic obstacles.
Its infrastructure to support quality, good manufacturing practices is underdeveloped by international standards, and its
experienced, domestic biologics workforce is limited.
Venture capital is growing in China, but is not readily available, even for solid business opportunities. China also lacks
a history of intellectual property protection, and, though it has come a long way, it still has legislative and cultural obstacles
to overcome. Lastly, China's support for R&D is very low. It is currently 1.2% of GDP versus 2.7% for the US, according to
2004 figures, and in raw numbers, is 1/20th of US expenditures.
RECENT INDUSTRY DEVELOPMENTS
To paint a better picture of the situation, however, it is instructive to review developments in China in recent months.
Infrastructure and Business Climate
To Western observers, the most visible sign of China's biopharmaceutical growth is probably the increasing activity of foreign
companies. In 2007, GlaxoSmithKline opened a $40-million drug research center in China, and expects its staff there will grow
to 1,000 in next decade. Eli Lilly announced plans to invest $100 million on R&D in China over the next five years to expand
its drug research capacity. Others foreign companies already involved in R&D in China include Novartis, AstraZeneca, Pfizer,
and Roche. Foreign activity in China is not limited to Western companies, however. Daiichi Pharmaceutical (Beijing) has announced
plans to promote sales of pharmaceutical products of its Japanese parent company in China.
Covance expanded its clinical research operations in China, with a central laboratory in Shanghai to strengthen its network
of full-service central laboratories. Three other contract research organizations (Sundia, MediTech, United PharmTech, and
HD BioSciences) formed a CRO Service Alliance (CROSA) in Shanghai. These activities may reflect the fact that China ranked
first as the "most attractive" low cost outsourcing clinical trial location by AT Kearney. (India and Russia took second and
third place, respectively.)
There have also been important deals between Chinese and foreign firms. One notable deal included a collaboration between
the Danish Biotech Research and Innovation Center and the Shanghai Institute of Materia Medica on an anti-cancer drug. China
Biopharma entered a deal to produce and distribute in China the immunotherapeutic vaccine staphage lysate (for staphylococcal
infection), developed by the US-based Delmont Laboratories.
Funding for all this activity took a positive turn as Bio Veda, the first international venture capital fund focusing on life
sciences investment in Shanghai, China, was formed.
New Drug Launches
Early-stage research is not the only area of China's biopharmaceutical industry that is showing growth. Ten major new drugs
were launched to the Chinese market in 2006, half of which were developed domestically by Chinese companies.
The Chinese company Chengdu Hoist Inc., for example, received approval for a radioactive monoclonal antibody—iodine [131I]
metuximab Injection. And China's first human H5N1 avian flu vaccine, developed by Sinovac Biotech Ltd. and China CDC, completed
Phase 1 trials.
Foreign-made drugs also entered the Chinese market in the last year. Novartis's hepatitis drug, Sebivo, (being developed
jointly by Novartis and US biotech Idenix Pharmaceuticals), received approval from China's State Food and Drug Administration
(SFDA). Also, an HIV RT inhibitor in late preclinical development was licensed by the Swedish company Medivir to Guangdong
Lantai Viewland Pharmaceutical. Wyeth also announced plans to enter the Chinese vaccine market with Prevnar, a pneumococcal
The examples above are reflected in the annual output of China's biotech industry, which approached $130 million in 2006.
China's medicine and health product imports and exports surpassed $30 billion in 2006, including biochemicals, traditional
Chinese medicine, and medical devices.