China's drug industry set to take off

Producing cheap drugs for the developing world could allow Chinese pharmaceutical firms to capture a bigger share of the international market, industry experts suggest. 

Their remarks come after the Wuhan Institute of Biological Products (WIBP), a drug firm that is part of the state owned China National Biotec Group (CNBG), signed a deal on September 14 with the US-based health charity PATH to jointly develop - and then produce - a new rotavirus vaccine. 

Rotavirus kills more than half a million children worldwide - 80 per cent in developing countries. So far, vaccination is the only effective way to combat the disease. 

Compared with existing rotavirus vaccines developed by pharmaceutical companies Merck and GlaxoSmithKline (GSK), the Chinese version -expected to reach the market in 2012 -will be based on more viral strains, providing wider protection. ’More importantly, we would try our best to lower its production costs, so that it would be priced cheaply to meet the demands of the developing world,’ says the project’s chief scientist Xu Gelin of WIBP. 

Separately, Shanghai-based Fosun Pharmaceutical have won the approval of the World Health Organisation (WHO) to market its anti-malaria combination drug Artesunate and Hydrochloride Amodiaquine on 30 August. 

Artemisinin-derived drugs are a powerful weapon in the fight against malaria, but until now, most Chinese artemisinin makers have only exported raw extracts to pharma giants like Novartis who make the drugs. 

Despite its reputation of being a low-cost manufacturer of nearly everything, China is not currently a major exporter of drugs, even cheap generics. In the first half of this year, for example, China exported only $7 billion of pharmaceutical products - the bulk of which were active ingredients not drugs. 

’The low exports of pharmaceutical products might be caused by the lack of research capacity in the Chinese pharmaceutical sector, but it is also a result of the poor knowledge of international norms and regulations for pharmaceutical products,’ says Ken Ren, president of Accelovance (China), a clinical trials consultancy. 

Xu agrees. By working with PATH, Chinese businesses will be able to tap into the expertise required to deal with issues like international registration, he adds. 

’Our production of small molecules [generics] might not be as mature as countries like India, but we have certain advantages in vaccines and other biologics, especially in production costs,’ says Xu, adding that this is a result of China’s long-established strategy of using cheap vaccines to immunise its own population. 

Ren says that although producing drugs for the poor countries will not bring Chinese firms big profits, it is a good opportunity to showcase their skills and capabilities. 

With more multinational drug companies now seeking to outsource production, the experience Chinese firms will gain by supplying cheap drugs to developing countries could help them grab a bigger slice of the outsourcing pie, he adds. 

Hepeng Jia