Development of biogenerics, perhaps more accurately termed biosimilars, today is more a function of intellectual property (IP) and politics rather than scientific factors. With the approval of biogenerics no longer hypothetical, the global industry must now determine pathways for efficient development. China's rapidly growing biopharmaceutical industry plays a significant role in the biogenerics picture. A key question, addressed in Advances in Biopharmaceutical Technology in China , a recent study conducted by BioPlan Associates and the Society for Industrial Microbiology, is whether China's biogenerics industry is moving in the right direction, or in a disorganized way with little consideration for IP issues (See Biopharm International , May 2007, "For Biopharma Considering China, Are IP Fears Unfounded?")
Most healthcare policymakers in China and in the West recognize that generic drugs are important to healthcare policy. Because biopharmaceuticals are currently among the most expensive therapeutics on the market and many blockbuster biopharmaceuticals are losing patent protection, the biogenerics industry will likely expand.
In China and India, where regulatory and IP standards for biogenerics are more liberal, a biogenerics industry is already thriving. In China, the presence of a substantial biogenerics industry reflects a growing need to provide modern healthcare to its domestic populations, at a reasonable cost. Although China sells its products primarily domestically, many US and European drug innovators struggle with the impact such biogenerics may have on commercialization opportunities and IP protection.BIOGENERICS AND BARRIERS TO EXPANSION
Biological products in China are mostly biosimilars or biogenerics of Western-invented products. This situation is changing as Chinese biopharmaceutical companies and venture capital firms invest in product innovation. However, the country's relatively low investment in R&D and the late development of its recombinant DNA technologies have resulted in most biologics production being based on non-Chinese IP. In recent years, however, government support has encouraged greater innovation in biological products marketed in China. Still, there are obstacles hindering the industry's success including the following:
PHARMACEUTICAL INDUSTRY BACKGROUND
China produces more generic drugs than any other country in the world. Since the 1950s, China has manufactured these products to supply its domestic demand. Today, generic drugs still dominate the Chinese pharmaceutical market. However, we are seeing more domestic innovation, and the market share of innovative drugs increased from 17% in 1997 to 20% in 2003.1 For healthcare policy, economic, and scientific reasons, generic drugs have played a key role in the Chinese pharmaceutical market and this trend will most likely continue in the future.
China began developing innovative drugs only recently. Its ability to innovate remains relatively limited, partly due to the current capital investment climate. In contrast, most Chinese drug manufacturers have produced generic drugs for several decades. China's technical competence in producing generic drugs and its advantage in raw materials have made the country a global off-patent crude drugs processing center.
In the early 1980s, the Chinese pharmaceutical industry began to modernize. However, Chinese pharmaceutical companies did not develop innovative drugs because of financial and technical obstacles. Patent laws were not a significant consideration. When China's patent law was first enacted (April 1985), it excluded drugs from patent protection. China's Drug Administration Law (July 1985) specified that pharmaceutical products that had never been manufactured in China were 'new drugs.'