Drug Development Opportunities in China - Regulation, key players and initiatives for domestic and international markets

Executive Summary 10
Introduction 10
Pharmaceutical companies 11
Biotechnology companies 12
Contract research organizations (CROs) 13
Future drug development in China 14

Chapter 1 Introduction 18
Summary 18
The current challenges of drug development 19
The Chinese population and economy 20
Growth trends 21
Culture and business environment 22
The Chinese healthcare system 25
The Chinese drug market 27
Traditional Chinese medicine 28
Western-style pharmaceuticals 29
Patent Issues in China 31
Drug pricing 32
Corruption and Bribery 33
Counterfeiting 34
The State Food and Drug Administration 35
Drug development in China 36
Initiatives for the domestic market 37
Prescription medicines 38
Case study: AstraZeneca 39
Over-the-counter remedies 40
Initiatives for foreign markets 43
Clinical trial recruiting advantages 46
Conclusion 47

Chapter 2 Pharmaceutical companies 50
Summary 50
Introduction 51
Local players 52
Traditional Chinese medicine 54
Foreign players 54
Sales and R&D activities of leading foreign pharma companies, 2007 55
Drivers of expansion in China 58
Economic benefits 59
Flexible research environment 60
Animal Testing 60
Stem cell research 61
Growth constraints 62
GMP compliance 63
Recent developments 64
Case study: Novo Nordisk 66
Conclusion 68

Chapter 3 Biotechnology companies 70
Summary 70
Introduction 71
Local players 73
Foreign players 76
Sales and R&D activities in of leading foreign biotech companies in China, 2007 77
Drivers of expansion in China 79
Increasing access to capital 79
Public offerings 79
Venture capital 80
Direct investment 81
Returning scientists 83
Knowledge transfer from CRO work 84
Support from Chinese-controlled drug developers abroad 85
Government support 85
Growth constraints 87
Constraints on foreign biotech activity in China 87
Constraints on domestic Chinese biotech activity 88
Recent developments 89
Bird flu vaccine 89
Monoclonal antibodies 90
Conclusion 92

Chapter 4 Contract Research Organizations (CROs) 94
Summary 94
Introduction 95
The CRO industry 95
The role of CROs in pre-clinical trials 99
The role of CROs in clinical trials 100
CROs in China 101
Local Players 103
Case study: WuXi PharmaTech 106
Foreign CROs 107
Case study: Bridge Pharmaceuticals 108
Intermediaries and agents 111
Drivers of expansion in China 112
Cost advantages 112
Returning scientists 113
Government support 113
Networking opportunities 114
Growth constraints 114
Pre-clinical testing 114
Clinical testing 115
Conclusion 117

Chapter 5 Future of drug development in China 120
Summary 120
Introduction 121
R&D trends for the domestic market 121
Domestic pharma R&D trends 122
Pharma R&D expectations for 2008 and 2009 124
Pharma R&D expectations for 2010 to 2013 125
Domestic biotechnology R&D trends 125
Domestic biotechnology R&D expectations for 2008 and 2009 126
Domestic biotechnology R&D expectations for 2010 to 2013 127
Domestic CRO R&D trends 128
Domestic CRO R&D expectations for 2008 and 2009 129
Domestic CRO R&D expectations for 2010 to 2013 129
R&D trends for foreign markets 129
Pharma R&D trends for foreign markets 130
Expectations for 2008 and 2009 131
Expectations for 2010 to 2013 132
Biotechnology R&D trends for foreign markets 133
Expectations for 2008 and 2009 133
Expectations for 2010 and 2013 133
CRO R&D trends for foreign markets 134
Expectations for 2008 and 2009 135
Expectations for 2010 and 2013 136
Conclusion 136

Chapter 6 Appendix 138
Primary research methodology 138
Index 139

List of Figures
Figure 1.1: Chinese population growth, 1950 – 2050 (est.) 22
Figure 2.2: Growth of China’s pharmaceutical drug market, 2001 - 2006 51
Figure 3.3: Growth of biotechnology products in China, 2001 - 2006 74
Figure 4.4: Timing advantages of using a CRO, 2007 101
Figure 4.5: Growth of CROs in China, 2001 - 2006 102
Figure 5.6: Pharmaceutical sales in China, 2007 - 2013 123
Figure 5.7: Proportion of R&D spending by type of product, 2008 and 2013 124
Figure 5.8: Biotech product sales in China, 2007 - 2013 126
Figure 5.9: CRO sales in China, 2007 - 2013 135

List of Tables
Table 1.1: Ease of doing business in China compared with 174 other countries 25
Table 1.2: OTC Drugs in China, 2007 41
Table 1.3: Advantages of working in China for pharma companies, biotech companies and CROs 45
Table 2.4: Characteristics of China’s foreign vs. domestic pharmaceutical companies, 2007 52
Table 3.5: Characteristics of China’s foreign vs. domestic biotechnology companies, 2007 73
Table 3.6: Recent public offerings of Chinese biotechnology companies 80
Table 4.7: Summary of drug testing objectives by phase 98
Table 4.8: Leading Chinese CROs, 2007 105
Table 4.9: Leading foreign CROs operating in China, 2007 109
Table 5.10: Effect of growth drivers on drug development sectors in China, 2007 - 2013 121