Pharmaceutical manufacturing has been flourishing in China recently and reminds us of the spirit of innovation and growth that took root in the U.S. in the 1980s and beyond. In fact, China is now the second largest pharma market, just trailing the U.S. What’s driving this growth is increased funding for R&D from the Chinese government, more regulatory controls, and a surge in partnerships with major U.S. pharma firms. In addition, more U.S.- trained scientists are returning to China, along with senior-level U.S. biotech executives accepting positions with Chinese firms.
U.S. pharma firms and Contract Development & Manufacturing Organizations (CDMOs) have been sourcing raw materials from more cost-effective manufacturing plants in China for years now and it’s how they have been able to develop more affordable APIs and other molecules for generic drugs. It’s a natural evolution that those firms are thriving thanks to these U.S. partnerships.
And, as the industry continues to become more global, the growth of Chinese biotechnology is not a threat to U.S. markets, but good news for both businesses and consumers. The worldwide industry is expected to be worth $775 Billion by 2024, and increased competition sparks innovation, along with more affordable prices for life-saving drugs.
While it’s clear that collaboration and cooperation between U.S. and Chinese pharma manufacturing firms will be the key to long-term growth for everyone, there are a number of challenges to be overcome, such as a shortage of talent, differences in manufacturing oversight, and overcoming the cultural and physical barriers.
A shortage of qualified talent worldwide continues to threaten innovation and the ability to fill the supply chain. This shortage is fueled by the fact that while biotech has always been a highly specialized industry requiring specific expertise, innovations in technology and methodologies for gene editing, pharmacogenetics or immunebiotechnology have made the industry even more complex. There’s simply not enough talent in these nascent areas to go around.
In addition, while Chinese manufacturers have not been as closely inspected by the FDA as they are now, it’s important that CDMOs everywhere follow stringent quality control measures and best practices. Several high-profile product recalls from drugs being manufactured in China have dominated the headlines of late, and may have invoked some skepticism in the market.
The third challenge has been the difference in time zones, language and cultural barriers. Most Active Pharmaceutical Ingredient (API) projects are complicated, with lots of moving parts and regulatory activity. This type of complexity requires a close partnership and regular, open dialogue between manufacturing partners.
Despite these challenges, there are clear benefits to working together with the common goal of introducing more affordable, life-saving drugs and therapies and driving the type of competition that sparks innovation. This can be accomplished in the following four ways.
- Expanding partnerships. U.S. CDMOs and generic drug manufacturers are seeing the benefits of sourcing products from China, the biggest one being the lower costs for raw materials and APIs, as well as manufacturing costs. Especially in the early development stages when small batches are required, partnering with a Chinese firm that is already commercially manufacturing the material can provide a big boost to your product timetable and eliminate lots of developmental steps.
- Becoming culturally aware and engaging in active dialogue. There are clear cultural differences between the U.S. and China, as well as ways of doing business. It’s important to get to know what the cultural differences are and where they come from to operate from a place of understanding and tolerance.
- Offering incentives to keep U.S. talent. While biotech talent may be leaving U.S. companies for Chinese startups, it’s important to make it attractive to keep that talent at U.S. firms. It’s not necessarily financial incentives that are swaying U.S. professionals, but the opportunities and excitement of the start-up environment. The U.S. has to nurture and invigorate a renewed start-up mentality in order to attract or retain the risk-taking leaders.
- Boosting FDA oversight. While the FDA has recently worked to ease restrictions to bring critical generics to market, diligent FDA oversight must be practiced across the board for both U.S., Chinese and other companies seeking to commercialize drugs. Properly vetted drugs can meet real, life-saving needs regardless of the nationality of the company that produces them – but it requires strict oversight.
The race to bring vital generics and other critical drugs to market doesn’t end at geographic borders, but requires the talent, inspiration and drive of experts everywhere. While it’s important that the U.S. retain its lead as the hotbed of biotech innovation, there’s plenty of room and growing demand for energetic and driven innovators in the U.S., China and in other key regions. It simply requires communication, collaboration and a mutual commitment to innovation.