As part of its \u201cMade in China 2025\u201d industrial plan, China hopes to reinvent its pharmaceutical industry. President Xi Jinping has identified his country\u2019s reliance on foreign drug imports as a critical\u00a0concern. China\u2019s\u00a0enormous\u00a0population, coupled with the rise of disease and illness, make the country a prime market for pharmaceutical companies. Xi plans to improve the Chinese pharmaceutical industry to counter this reliance on foreign firms to tap into the revenue generated by the Chinese market, the second largest pharmaceutical market behind the United States, and to create globally competitive firms.<\/p>\n
The \u201cMade in China 2025\u201d plan seeks to upgrade China\u2019s economy through mass government investment and policy reforms. It specifically targets high-technology fields, such as the pharmaceutical industry that is currently dominated by the developed economies in an attempt to move China\u2019s economy up to the value-added chain. It is a high-technology field that requires massive amounts of research and development, with such high investment costs that most Chinese companies are simply priced out.<\/p>\n
The Chinese pharmaceutical market is notoriously\u00a0fragmented, with most companies selling generic drugs or therapeutic medicines. This fragmentation keeps investment in research and development low, with\u00a0R&D investment\u00a0averaging 5 percent of sales for Chinese companies, compared with 20\u00a0percent for U.S. companies. To encourage industry consolidation and increase spending on R&D, the Chinese government has introduced new regulations that increase the stringency of\u00a0safety and testing\u00a0requirements. These increased standards are prohibitively expensive; the new trials could cost over USD 1.5 million, which many of the smaller companies simply cannot pay. As they are unable to meet these costs so they will be forced to sell themselves to the larger companies, this will ensure their market share. Increased market share will allow these larger companies to devote more resources to research and development.<\/p>\n
The\u00a0government is also moving quickly to approve new drugs for the market. Now data from trials conducted\u00a0outside of China\u00a0can be used to seek approval for drug distribution in China. Naturally, in the short term, this will benefit foreign companies that conduct most of their tests overseas. Multinational pharmaceutical companies have been turning to China to drive growth, even though it currently only accounts for a small percentage of sales. Yet over time, local companies will become larger beneficiaries, as the Chinese government continues to use foreign-domestic partnerships as a requirement for access to the Chinese market.<\/p>\n
Biopharma was the\u00a0second largest investment market\u00a0in China in 2017, behind only information technology. Increased investment is being driven by foreign money, which has started to view China as a \u201chealthy investment\u201d when it comes to healthcare and biopharmaceuticals. Cementing the industry\u2019s internationalization, China joined the\u00a0International Council for Harmonization\u00a0(ICH) in mid-2017.\u00a0 By doing so, China signaled that its standards meet global benchmarks and that its pharmaceutical market is both a good investment and a reliable partner.<\/p>\n
As China enters the ranks of the high-technology pharmaceutical manufacturers, it will challenge the market dominance of U.S. and European pharmaceutical giants. The Chinese government has seen its aging and increasingly ill population as both a risk and an opportunity and has responded in one of the only ways it knows how: attempting to upend a global market.<\/p>\n","protected":false},"excerpt":{"rendered":"
As part of its \u201cMade in China 2025\u201d industrial plan, China hopes to reinvent its pharmaceutical industry. President Xi Jinping has identified his country\u2019s reliance on foreign drug imports as a critical\u00a0concern. China\u2019s\u00a0enormous\u00a0population, coupled with the rise of disease and illness, make the country a prime market for pharmaceutical companies. Xi plans to improve the […]<\/p>\n","protected":false},"author":1,"featured_media":3110,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"categories":[17],"tags":[2838,163,469,749],"industry":[17225],"therapeutic_areas":[17228],"class_list":["post-3107","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-biopharma","tag-china","tag-pharmaceutical-companies","tag-pharmaceutical-market","industry-pharmaceutical","therapeutic_areas-oncology"],"acf":[],"yoast_head":"\n