China Blog Series Part 4: Questions Still Remain
This is part 4 of a 4 part blog series featuring growth, challenges and predictions for China’s emerging life science industry:
Will Novartis’ USD 1 billion investment finally shame domestic Chinese pharmaceutical companies into making real commitments to innovative R&D?
The Chinese government, via funding programs such as the 863 National High Technology Research and Development Program, the 973 Major State Basic Research Development Program of China, and the “Torch” technology development program, has committed significant resources to developing basic and applied research germane to innovative drug discovery and development (among other areas). In spite of this support, China remains sluggish in producing innovative (Western) drugs. Part of the blame for this surely lies at the feet of China’s domestic pharmaceutical industry, which, as a whole, has failed to substantially nourish or reward local drug development and, in particular, commercialization efforts. To be sure, the new healthcare reforms will likely reward China’s larger drugmakers with no increased R&D efforts on their part; but, as foreign big pharma steps up R&D in China and lures an increasingly large portion of the nation’s scientific drug discovery and pharmaceutics talent, will local drug companies be content to be passed by and play the generics game indefinitely? Novartis’ announcement may compel local Chinese pharmas (and their government stakeholders) to answer this question sooner rather than later.
What is the real significance of the Novartis announcement?
Regardless of whether the CNIBR yields significant returns in years to come, the magnitude of Novartis’ commitment constitutes a statement which cannot be ignored. At the very least, it is an affirmation of the importance of the Chinese pharmaceutical market to Novartis ��� and by extension the global pharmaceutical industry ��� going forward. While it is perhaps too early to judge, the investment may also mark a watershed moment for the pharmaceutical R&D space in China ��� an indicator that it has reached the next stage in its evolution. Does Novartis believe that new, innovative drugs will come from China? One billion dollars is a lot to spend if they don’t.
- Dr. Jon Zifferblatt
Managing Director, General Biologic
About General Biologic
GBI is an information and professional services firm founded in China in 2002. With more than 30 professionals in Shanghai, our business is providing critical data and advice covering China’s pharmaceutical, biotechnology, and healthcare industries. Our goal is to create a transparent operating environment for our clients, and provide the insights into the competitive landscape they need in order to capitalize on the tremendous opportunities available in China. Our clients depend on the news, data, and analytics we provide to make informed decisions every day. GBI’s clients include most multinational pharmaceutical companies and a leading group of biotechnology companies, healthcare companies, investors, consultants, law firms and financial analysts. For more information, please visit http://www.gbipharma.com/.
