Biopharma's Future: Made in China

All that has changed in the last 20 years, with an economic and manufacturing revolution transforming China into the world’s biggest exporter, making everything from iPhones to underwear.

But now the country’s economic growth is slowing, its leaders are looking to the next phase – moving from being a low-cost location for manufacturing, to an economy developing its own intellectual property-based products – including innovative medicines.

The country’s Made in China 2025 policy identified ten strategic sectors of the economy it needs to strengthen, with one of them being pharmaceuticals.

President Xi Jinping has identified the country’s reliance on foreign drug imports as a critical concern (with popular sentiment also a factor – see China’s demand for modern medicines opposite), and a series of sweeping reforms is now opening China’s pharma market to rapid modernisation.

This includes changes introduced last year to allow data from trials conducted outside China to be used to gain approval, rather than having to conduct additional tests in the country.

Meanwhile the national medicines regulator the Chinese Food and Drug Administration has also been reformed and renamed as the National Medical Products Administration of China (NMPA). In 2018 it has issued a flurry of approvals to new and innovative drugs such as MSD’s Keytruda and Pfizer’s Ibrance.

Twinned with the near-complete health insurance coverage across the country and the broad public health plan, Healthy China 2030, these changes are accelerating uptake of modern healthcare in the country, including new medicines.

China is already the world’s second biggest market for pharma, worth $123bn in revenues last year, according to LEK Consulting. It forecasts that the market will post growth in excess of 5% every year until 2022, reflecting an increasingly wealthy and ageing population, which is succumbing to the once ‘western diseases’ of heart disease, diabetes and cancer.

Multinationals such as AstraZeneca and Pfizer have posted astonishing growth in China this year by catering to the vast needs of the country’s population of 1.39 billion people.

However, in the long term these huge demographic shifts and market reforms will also create an environment which will encourage home-grown innovation-based companies to emerge.

Nooman Haque, managing director, life sciences and healthcare at Silicon Valley Bank comments: “Everybody thought the big pharma companies would be the obvious winners of these reforms, and that probably is true. But as we have seen in other sectors, Chinese entrepreneurs and companies are adept at moving quickly themselves – they’ve managed to do it in technology, for instance.”

Examples include computer hardware giant Lenovo, and tech giants Alibaba and Tencent, which have all established themselves as global players.