As the second largest and fastest growing market for biotechnology products, China needs no introduction. The opportunity to heal, fuel, and feed 1.3 billion global citizens stands in clear contrast with the regulatory, financial, and political frameworks that present challenges to the life science industry’s external access to the evolving Chinese market. On Tuesday at the 2011 BIO International Convention, a panel discussion titled “Innovative China: Policies for the Future” addressed the future of the biotechnology industry in China, and the regulatory structure.
The panel was moderated by Anthony Saich, and featured Katie Linton, Samir Khalil, Gunther Winkler, and Robert Atkinson. Mr. Atkinson opened the panel by addressing China’s innovation policy pertaining to both indigenous and foreign-based sectors. While China still lags behind developed countries in established parameters measuring innovation, over the last decade its growth ranked first. Yet Atkinson warned that China has moved toward a pro-indigenous business model and, relative to other international markets, continues to be a haven for intellectual property (IP) theft.
Conversely, Mr. Khalil expressed his optimism that China’s five-year plan will provide ample opportunities for biotech companies. Khalil, noting the growth of a strengthening middle class in China, was confident that the forthcoming political transitions will help accelerate the country’s emergence as a welcoming political and financial environment for biotechnology innovation. Winkler discussed his experience in opening and operating facilities in China, and the onerous process of navigating regulatory approval. For the life sciences industry to survive and eventually thrive, Winkler stressed that there must be cooperation between China, the international community, and private sector innovators and investors to develop an environment suitable for biotechnology.
Ms. Linton presented the results of an International Trade Commission (ITC) study of the Chinese economic model, finding that if China were to increase its IP protections (most importantly, its enforcement) it would most likely lead to greater US exports to China. The study also found that China’s “web of policies” that favor indigenous companies inhibits the growth of foreign companies.
Overall, the panel provided rare insight into the evolution of China as a major player in biotechnology industry. In an effort to understand these key opportunities and challenges, The Monitor Group developed a guiding report on China’s biopharma industry, on behalf of the Biotechnology Industry Organization, which was also released at the BIO 2011 International Convention. The report is a summary of current frameworks and market trends in China, and is well-suited to BIO’s ongoing engagement with Chinese government agencies, including the State Food and Drug Administration, State Intellectual Property Office, and the Ministry of Health. Supplementing the development of the Chinese biotech community, BIO will host the first BIO International Convention to China, or BIO China, October 12-13, 2011 in Shanghai.
It is in Shanghai and across the vast outer provinces of the world’s most populous country that life science innovators and investors face complex local environments. China “clearly represents a significant opportunity for Life Science firms,” Monitor reflects, as China has offered “a strong focus on prevention and basic medical care, significant expansion and improvement to social health insurance, rapid build-out of primary care infrastructure both in urban and rural areas.” Monitor found that often-cited measures of market size underestimate China by as much as forty to fifty percent, which is dominated by off-patent products (95%). This expansive market presents new challenges to the biopharma industry, and BIO will continue to watch China as it moves forward in developing a dynamic regulatory framework in line with its population’s unmet needs.