New horizons for China biotech
SummaryPharmaceutical organisations in China are increasingly looking abroad for new markets, boosted by their Government’s strong support for businesses that invest overseas. The country is now the world’s second-largest pharma market, behind only the US, and produces around 40 per cent of the world’s active pharmaceutical ingredients.
- Author Company: ELC Group
- Author Name: Sy Chyi Yeoh, Director of Business Development
- Author Website: http://www.productlifegroup.com
Pharmaceutical organisations in China are increasingly looking abroad for new markets, boosted by their Government’s strong support for businesses that invest overseas.
The country is now the world’s second-largest pharma market, behind only the US, and produces around 40 per cent of the world’s active pharmaceutical ingredients. And with the domestic market also moving from traditional generic medicines to more innovative therapies, Chinese pharma firms are keen to capitalise on opportunities that present themselves worldwide.
However, companies from China that want to expand overseas also have to evaluate the practicalities. Should they set up proprietary operations in their target markets, for instance, or should they partner with sales representatives in the relevant regions, or even buy local companies, as some Chinese firms are doing with European biotech firms? In addition, how should they navigate the EU’s diverse compliance provisions? And which country would work best as a base?
The usual way to minimise risk when entering a new market is to hire a global or local CRO/outsourced service provider. A good CRO should understand the local market dynamics and be able to bridge any gaps in regulatory knowledge. It is here that the US benefits from having English as its dominant language, plus a single regulator and an environment conducive to biotech innovation.
Europe, however, presents more of a challenge for market entrants from China. The continent as a whole is a complex entity for pharma companies, with its multiple cultures and languages – and each nation still sets its own local requirements despite EU-wide harmonisation by the European Medicines Agency.
Before Brexit, the UK was Chinese pharma companies’ springboard to Europe but since Brexit its place has been taken by Germany, which benefits from a fairly transparent regulatory environment. Spain is also seen as attractive, due to its flexible and cost-effective approach.
Companies entering Europe need to manage requirements and registrations across the different markets and in order to get it right the first time within budget, substantive CRO support is invaluable. The EU is the world standard for pharma quality and safety standards, and if a company can meet European standards, it is well placed to expedite compliance in other markets.
When moving into a new market, finding the right kind of independent help is crucial. Global CROs often charge high fees but they may still lack the deep understanding and practical experience that companies from China need, and paying for generic help is not something most pharma companies can afford. Having access to deep, specific knowledge of both Chinese pharma and external potential markets – especially Europe – will be essential.
As a final note, patience can pay off more than speed. If pharma companies are careful to build relationships and look at every opportunity, they stand to gain great benefits from their new ventures in foreign markets.