BayBio Observations From China
Ni hai. Greetings from China. I am in Hanzhou at the 2010 International Summit of China Pharmaceutical Industry. Global recession? You would never know it here. The momentum of the Chinese Pharma industry is amazing. In my first day here I was struck by three observations.
1. The Chinese Pharma market is enormous.
Today, the per capita consumption of drugs is about $80, or 7% of the US, but this is about to change drastically. Obama wasn’t the only one to enact healthcare reform this year. The Chinese Healthcare Reform Act will increase both access and number of pharmaceuticals reimbursed, including covering 120 million rural citizens. Per capita consumption is expected to grow fivefold in the next three years. What does this growth mean? By 2013 IMS predicts China will be 3rd in global Pharma sales, surpassed only by the US and Japan.
2. For now, follow rather than lead.
The Chinese pharma industry is currently following in the footsteps of the US. In a very humble talk, the head of the Chinese Pharmaceutical Industry Association admitted that huge gaps in quality and IP exist today, and that China is working hard to adopt cGMP and GLP and conform to FDA standards. Chinese companies are filing INDs in the US not only to access US markets but also to validate their quality.
3. An R&D powerhouse
While on a per capita basis China faces a shortage of scientists similar to the US, on an aggregate basis the scale of their research is impressive. Chinese officials predict that they have the potential to produce 25 NCEs per year. Mining traditional Chinese medicines offers an interesting source of targets. The power of this R&D engine has not been lost on global pharma. One almost imagines being in New Jersey when seeing the Pharma R&D centers of the top global companies lined up door to door in Shanghai.
This conference has been an eye-opener. I will return home committed to working to foster collaboration and business between our companies and China. To that end, we hope to have a large delegation from China at our 2011 Powering Global Innovation Conference next April.