Pharma attracts overseas investment | investinchina.chinaservicesinfo.com

Pharma attracts overseas investment

China Daily Updated: 2018-12-26

5c22de93a310d9126fdb6fc4.jpeg

A scientist from the Guangzhou Institutes of Biomedicine and Health, which is part of the Chinese Academy of Sciences, conducts an experiment. [Photo/Xinhua]

Medicine sector grows as policies open up market

In the coming five years, China will contribute an estimated $37 billion to the global prescription market and 13 percent of the sector's growth, amid growing investment interest among foreign pharmaceutical companies, according to a recent report.

Chinese consumers spent $122.6 billion on medicine in 2017, with demand generated by the country's large elderly population, according to the report by management consulting firm LEK Consulting. It estimated the market will achieve nearly double-digit growth in the future.

"Because of the rapid growth of the Chinese market and the country's constantly increasing medical expenditure, China's biopharmaceutical market has great growth potential. Therefore, foreign companies have strong interest in the market," said the report.

Unlike conventional drugs made by manufacturing-focused pharmaceutical companies through syntheses of plant- or chemical-based compounds, biopharmaceutical medicines are developed by research-driven biotechnology firms using yeast, bacteria or mammalian cells.

Around 90 percent of international biopharmaceutical companies intend to enter the Chinese market, or further expand their existing business in China, according to the report.

China is among the top four markets that biopharmaceutical companies would like to invest in, and 22 percent of enterprises interviewed for the report saw the market as a high-priority option.

Also, some Chinese companies are actively approaching foreign ones. Two-thirds of biopharmaceutical companies around the world have already received an invitation from Chinese enterprises.

No matter which research and development stage a biopharmaceutical company is in, it will consider entering the Chinese market, especially those at the phase II clinical trial stage that are surveyed.

In the past 10 years, China has launched a series of initiatives to build an ecosystem that effectively supports the R&D of innovative healthcare products.

The country's Thousand Talents Plan attracts overseas Chinese to return to their homeland, offering strong financial backing for world-leading R&D programs.

In addition, the government has increased its investment in medical approval processes to shorten and standardize the approval period for Chinese medical products. The number of evaluation experts at the Center for Drug Evaluation, part of the Food and Drug Administration, is now three to four times higher than in 2013.

The State Council's Made in China 2025 initiative aims to speed up China's innovation process and raise its manufacturing standards, especially in the biopharmaceutical industry.

"These policies, regarded as symbols of the Chinese government encouraging international cooperation, will reduce the costs and time for products to enter the Chinese market," said the report.

Dirk Van Niekerk, head of prescription medicine at pharmaceuticals producer Boehringer Ingelheim China, said: "I think no international enterprise in the world can deny the importance of the Chinese market. In recent years, China's pharmaceutical industry has had great development. The period of drug approval is shortened, employees in the country's drug supervision department are getting more and more training, and we have seen that China is put-ting a lot of effort into improving drug quality."

However, multinational biopharmaceutical companies still face challenges when entering the Chinese market.

According to the report, Chinese patients and doctors have quite different demands compared to those in other countries. For example, patients' limited budgets and the limited medical resources means the Chinese market has different acceptance rates for expensive innovative medical treatment.

The difference could lead to failure when medical innovations from European and North American countries are introduced to China.

Chinese firms usually prefer to develop products with high cost performance, offering the most economical product while meeting the expected standards.

In spite of the complexity of the Chinese market, challenges that have existed for a long time are being eliminated, and more international pharmaceutical companies are attracted to the Chinese market.

"Recently, we noticed that some American enterprises had inked deals with their Chinese partners, to jointly promote product commercialization. Therefore, we are considering entering the Chinese market as well," said Joseph Whalen, senior vice-president of Horizon Pharma.