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Pfizer announced on Tuesday that it will be investing $350 million to build a biotech center in China, its first such facility in Asia. The center, in the eastern Hangzhou region, is expected to be completed by 2018.
The draw of the Chinese healthcare market is obvious — consultancy IMS Health has predicted it to be worth around $185 billion by 2018. But foreign pharmaceutical companies have often found getting their drugs approved in China to be a slow, difficult ordeal. And then there’s no guarantee that approvals will hold. Indeed, last year Pfizer had to close its vaccine business in China after regulators declined to renew a license for its top-selling vaccine Prevenar.
Pfizer hopes the new biotech center will give it an edge in getting its drugs to the market as quickly as possible. Other big pharma companies have been pursuing the same goal by investing in China facilities, as well as through acquisitions, licensing deals, and joint ventures.
Pfizer has decided the potential hiccups of red tape and intellectual property rights are worth the risk. The firm has promised to work closely with local regulators. Furthermore, the center should be win-win for all. According to John Young, group president for Pfizer’s essential health division, the Hangzhou facility should “help support China’s aim to increase the complexity and value of its manufacturing sector by 2025.”
Innovation will be necessary to improve drug effectiveness as well as decrease their prices. Beijing has been trying to drive down drug prices in order to rein in healthcare costs, so the Chinese market — while large — is no longer a golden free-for-all with premiums for brand name pills. Still, Pfizer’s planned facility is a vote of confidence that China is going in the right direction.
Click here for the 2015 BCLS panel on China and intellectual property rights. And stay tuned for the upcoming 2016 BCLS panel on top biotech advances.