It is a special time in the development of China’s pharma market, with the rapid growth of domestic companies aiming for international markets, and emerging R&D and biotechs opening up to develop new innovative therapies locally. Over the past decade, I’ve seen a vast number of Chinese-born scientists returning home after successful international careers; they are now creating an exciting R&D environment in their home country. This influx of resources, coupled with greater healthcare investment in China, has created fertile ground for biotechs looking to secure funding. At the same time, the CNDA (the former CFDA) has been harmonizing China’s regulations with global standards, and streamlining drug-approval processes. The culmination of these changes is that an increasing number of biotech targets are advancing through clinical development, and greater numbers of international companies are looking to reach patients in China.
Changes in the Hong Kong stock exchange listings policies are also further fuelling opportunities for international and domestic partners looking to establish an Asian base. Domestic biotech companies in the pre-revenue stage can now list in Hong Kong – but, perhaps more importantly, a change to allow dual-listing for EU/US biotechs in partnership with a Chinese-based biotech will open up many opportunities for international companies.
Going back just ten years, the domestic sector’s focus was almost solely on API production, whereas today the industry is now extremely diverse – a very different situation. Chinese pharma has rapidly advanced up the pharmaceutical development value chain, producing everything from novel “made in China” APIs, to finished dosage formulations, to innovative biotherapeutics. I believe that one of the most significant changes is the recent shift towards R&D in China. The government is determined to spend more on healthcare, as well as developing national pharma companies, in line with the expectations of an increasingly middle-class population. Massive amounts of money are being put towards R&D at both a national and local level, and tax incentives are offered to companies pursuing R&D. The ultimate goal is to put China on the map as a creator, not just a supplier. From the inside, it’s clear to see this change is already occurring; for example, there are now more CAR-T companies and ongoing trials in China than in the US.
The strategy is broadly outlined in “Made in China 2025,” which marks the pharmaceutical industry as an area where there is potential for reinvention and growth (see a recent feature article from The Medicine Maker that delves deeper: link/reference). Ultimately, the Chinese government aims to increase pharmaceutical output and increase innovation. One aspect of this plan, the marketing authorization holder (MAH) pilot, is an initiative that allows license holders of a drug to sell in China using a contract manufacturer, instead of being required to manufacture the drug themselves. The MAH is already helping to drive market innovation, not to mention facilitating rapid growth in China-based CDMOs.
The MAH also advances time to market for many global companies – so, it’s proving to be beneficial internationally as well. There’s a perception that US biotechs tend to keep their products at home in early development, but we have a huge number coming to work with us here in China in early development in light of our ability to expedite development timelines.
In recent years, the CNDA has made significant changes to accelerate drug approvals, and foreign drug-makers will be able to file a new drug approval using data from international, multicentre trials – in the past, a specific Chinese trial would often also be required. At the same time, there’s also been a change in regulations to make it easier to register as a clinical trial site. And that means we should see improved access to newer drugs for domestically prevalent conditions being approved for use in China. Increasing numbers of Chinese companies are now running clinical trials for drugs in both the US and in China simultaneously.
China still has work to do to create more globally competitive pharma companies. But I believe China is already further ahead than is sometimes appreciated in Western markets! China has already seen a proliferation of successful pharma innovators in the country, with notable examples including BeiGene, Zai Lab and Hutchison China MediTech. BeiGene has been particularly successful, developing immune checkpoint modulators and PARP-inhibitors. Similarly, we have recently supported the commercial launch of Ganovo – a novel treatment for hepatitis C – in partnership with Ascletis. The partnership was made possible by the MAH pilot, showing just how important the new regulations can be in pushing Chinese companies to produce innovative therapies! Expect to see more examples like these as the changes currently taking place in China continue over the coming years.
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