4 Reasons for Drug Companies to Move to China

Large drug companies plan drug development in China as mentioned in a recent press release by Reuter about Eli Lilly

There are several reasons for this:

  • Relative ease of recruiting patients with diseases under investigation
  • Substantially lower costs
  • A strong medical infrastructure
  • The cost for a researcher in China is as little as 20 percent of the cost in the United States

To my opinion there are some disadvantages to this development.

  • Protection of patients in trials is probably not as solid as in Europe and the US.
  • Data obtained from this research might not be applicable to patients in Europe and the US, two other important markets for these companies.
  • This could be due to differences in pharmacokinetics as well as diagnostic differences between very different cultures. Is depression in China tolerated and is it the same as in the US and Europe?
  • Do they adhere in the same manner to for instance the DSM IV criteria?
  • Is money not a strong motivator for participation in trials?

There remains the question whether biotechnology in China is as advanced as in the US and Europe.

China, the world’s most populous country, has also attracted research centres from other international players such as Novartis (NOVN.VX: Quote, Profile, Research) and Tamiflu maker Roche (ROG.VX: Quote, Profile, Research).

China has overtaken India as one of the fastest growing location for drug trials. The website clinicaltrials.gov shows that China has 274 clinical trials under way, compared with 260 in India.

Drug companies are under heavy pressure. They don’t have new drugs in their pipelines. There are no new blockbusters expected, development is getting more expensive and demand for safer medications increases.

The development of a new drug costs on average 895 million Euros and takes 8 to 10 years.
Drug companies are trying to incorporate biotechnology concerns for new developments. The world is not waiting for another SSRI such as fluoxetine, sertraline, paroxetine. The so called followers or “me too” drugs are not a solution for their cash flow. They will have to invest in biotechnology for break troughs with really new drugs with different mode of actions.

Wall Street Journal

Opening a new frontier of outsourcing, global pharmaceutical companies overwhelmed by the rising costs of producing new drugs increasingly are turning to China to conduct low-cost research and development. They are finding highly educated scientists who work for a fraction of the cost of their Western counterparts, and vibrant and growing biotech businesses. They also are beginning to sink significant amounts of money into investments that will further boost China’s capabilities.

International Society of Drug Bulletins (ISDB) Newsletter