Updated on 16 May 2012
China is attracting investments from MNCs in the life sciences sector
Even as most emerging economies in Asia Pacific are trying to grab a foothold in the global biopharma space, China has etched an important spot for itself in that space in recent times. In a span of less than a year, multinationals such as Merck, AstraZeneca, Abbott and Quintiles, have made significant investments, upwards of millions of dollars, in expanding their existing operations in China.
Impending patent cliffs coupled with increasing costs of R&D are forcing multinational pharma and biotech companies to look for sustainable solutions and, if numbers are anything to go by, China has answered the call.
In December 2011, Merck announced the establishment of an Asia R&D headquarter for innovative drug discovery and development in Beijing, China. This was part of a larger commitment by Merck of investing $1.5 billion over the next five years in China. Merck also maintains its commercial headquarters for MSD in Shanghai, China, and has manufacturing capabilities at other locations in the country. The new Asia R&D headquarter is being built in Wangjing Park, one of Beijing's rapidly expanding science and technology parks. This new facility will have enough capacity for about 600 employees working in the areas of drug discovery, translational research, clinical development, regulatory affairs and external scientific research programs.
Another pharma giant AstraZeneca announced a $200-million investment in a new manufacturing facility in China Medical City (CMC), Taizhou, in Jiangsu province. The new site represents AstraZeneca's largest-ever investment in a single manufacturing facility globally and will produce both intravenous and oral solid medicines for the company's growing business in China.
Today, China and India account for almost 37 percent of the world's population. The sheer sizes of the potential markets is compelling MNCs to rethink their strategies and go beyond just sales and marketing offices in these countries and build their own capacities to serve both local and international markets. Also, with branded products worth an estimated $128 billion losing patent protection between 2009 and 2014, large firms are significantly scaling down budgets to compensate for the expected losses. One of the strategies is to do cut down on the expenditure involved in drug development processes, which also involve a large number of job cuts in the West as observed by AstraZeneca and Novartis recently.