Multinational pharmaceutical companies aim at the Chinese market

In recent years, multinational pharmaceutical companies increasingly use China as an important production base. On the one hand, the Chinese market has great potential, and local production is closer to the end market. On the other hand, Chinese factories have lower labor costs and production cost advantages than factories in Europe and the United States.

Localization of production into a strategic Novartis is not the only pharmaceutical multinational company that has produced capital in China. In the past few years, the international pharmaceutical giants have increased their investment in China and laid out their production. In 2012, AstraZeneca invested US$200 million to establish a new production base in Taizhou, Jiangsu Province. In the same year, the second phase of Sanofi’s Beijing factory project was also launched.

On the one hand, there is an upsurge in the construction of hot factories in China, and on the other side, factories in other parts of the world are shut down or sold.

Industry insiders interpreted this: The shutdown of the factory was due to the shrinking of the local market, and the production capacity could not be fully exerted; while other factories were shut down because after the expiration of many patented drugs, the original manufacturers were unprofitable in the local area, and the closure may be even more Good choice. As China will become the second largest pharmaceutical market in the world, choosing a local Chinese market has become the primary choice for multinational pharmaceutical companies.

Turning to the expansion of the Chinese factory, Pan Hong, vice president of pharmaceutical operations at Novartis Pharmaceuticals (China), pointed out: "At present, our products are mainly to meet the needs of the Chinese market, one of which is for export."

Compared to multinational medical device companies, 50% of their production capacity in China is based on the European and American markets, and pharmaceutical companies' Chinese factories are more oriented to the Chinese market. For this, pharmaceutical companies have detailed plans.

“The original intention of the second phase of the Changping Plant expansion was first to meet the needs of the Chinese market.” Xu Haijun pointed out: “From a higher perspective, Novartis is the leading company in the pharmaceutical industry, and R&D investment is the largest in the pharmaceutical industry. All the main products of our Changping Plant are original research drugs. In the future, we will bring more innovative drugs to China. Therefore, we hope to make some preparations for production so as to realize the localization of innovative drugs faster.”

The completion of the new factory is the biggest advantage for Novartis, which is unique in the field of hypertension. Pan Hong pointed out: "Hypertension products account for a large part of the products produced at the Changping plant. Our hypertension products have developed very well in China. The current production of these product portfolios will also have very good development in the coming years. ”

Coincidentally, on January 18, 2013, GSK announced that it has made significant investments to increase its localization productivity in China. According to Mark Rui, President of GSK China Investment Co., Ltd., “30% of GSK's sales volume in China was locally produced in 2009. It is expected that this ratio will increase to around 75% by the end of 2013. At present, GSK health care products, 95% of sales in China have achieved localized production."

"GSK has formulated a very detailed plan to increase the productivity of product localization, and will make further investments to ensure the realization of this plan." Mark Rui pointed out that the company has just localized the production of three products and is expected to At the end of the year, the production of seven other products will also be localized.

The purpose of accelerating the expansion of production capacity of new products entering into China by multinational corporations is not only to meet the growing demand for pharmaceuticals in the Chinese market, but also to expedite the implementation of innovative drugs in China as soon as possible. No matter if it is Novartis or GlaxoSmithKline, it is not a low-cost factory in China, but will bring new products into the Chinese market faster.

“From the perspective of strategic planning, this direction has long been established, but after the strategic direction is determined, many steps are needed to implement and implement. The challenge of localized production of innovative drugs is that the national new drug registration process is relatively slow. It is difficult for China to participate in clinical trials at an early stage. Therefore, the registration of new drugs in China will lag behind other countries. If registration is not completed, it will not be possible to produce or market in China, Xu Haixi pointed out.

The problem of the low proportion of production capacity in China has caused many risks. At present, most pharmaceutical companies in China have failed to fully assume most of their production capacity for pharmaceuticals. The old model that relies on imports has also caused delays in the process of registration approval.

Previously, GSK's vaccine products had been modified by the National Pharmacopoeia. The company was subject to global production, but it was unable to keep up with China's single-to-one formula revision. Eventually the formula was not sold to meet the requirements of the new pharmacopoeia.

Now, in the new thinking of multinational pharmaceutical companies, as long as the product is registered in the Chinese market, it hopes that localized production can be carried out as soon as possible. "When new products were listed in China, they were produced in China from the very beginning, and they did not need to be imported." In terms of technology, they can communicate with the Chinese regulatory authorities in time to ensure that the products can be produced smoothly.

At present, Novartis's experience in this area is to combine R&D and production. Novartis calls it "Launchexcellence". Pan Hong said: "When a new product is introduced, how to ensure that this product can also be well implemented, to ensure that the final product to produce stable, less scrapped, high quality, which has a set of perfect processes, in In the middle and late stages of R&D, the production and quality departments must consider how to work with the R&D team to bring the product smoothly into the production process.”

According to Xu Hailu, “Novartis has a production and R&D base in Suzhou. One of the important tasks is to conduct research in this area. They will conduct research on the pre-mass part of the production process, and some of them will belong to the development team. Research on the link between R&D and production."