Impact of China on the Pharmaceutical Industry - Thematic Research

Over recent years, driven by regulatory reforms and national strategic initiatives to support healthcare innovation, the Chinese pharma industry has shifted away from a focus on generics and towards R&D of innovative treatments. More domestic companies are now investing in drug discovery and development in areas of IO and regenerative medicine. Where previously, drugs to address healthcare gaps were in-licensed from big pharma or biotech, more domestic companies are now out-licensing their innovative products to major companies. The Chinese government has also sought to make the market more accessible to international drug companies and has implemented many regulatory changes to allow for faster drug approvals and clearer guidelines. China’s pharma industry has been transformed as a result and is the second largest globally after the US. According to the China Statistical Yearbook, it was valued at $72.1B in 2012 and grew to $149.8B in 2019. It is expected to reach $468.2B by 2029 at a compound annual growth rate (CAGR) of 12.1%. Other factors driving the growth of the Chinese pharma market include its rapidly aging population, increased prevalence of chronic conditions, and the expansion of social health insurance.

Key Highlights

• China has the second largest pharma market in the world behind the US. The government has identified biopharma as a key industry for economic development. Recent regulatory reforms and national strategic initiatives are shifting focus from generics and towards R&D innovation. The Chinese government has implemented many regulatory changes to allow for faster drug approvals and clearer guidelines, and to attract international companies. This includes accepting data from non-Chinese clinical trials and the establishment of four accelerated approval pathways. In addition, its 10-year Made in China 2025 initiative is intended to strengthen innovation, develop an efficient domestic supply chain, and transform China into a manufacturing superpower.
• China is a leader in generics manufacturing, with approximately 90% of currently marketed products in the country generic. The China biosimilars market, while currently limited, will likely see significant growth over the next few years as there are over 100 biosimilars currently in development. China aims to continue to lead in the generics space but China’s recent incentives for domestic innovation are shifting the emphasis from generic to innovative drugs. Factors driving the growth of the biosimilars market include the establishment of a biosimilars pathway in 2105, changes made to reduce costs and barriers for companies performing R&D, increased reimbursement of biologics, as well as a greater acceptance of non-originator brands.
• China is an emerging player in the regenerative medicine research space, with over 320 cell and gene therapies in the pipeline. The main factors driving this sector are well-defined regulations on quality, well-developed infrastructure for conducting biomedical clinical trials, and government-industry collaborations focusing on innovation. However, the international scientific community has raised concerns about the quality and availability of data behind some regional advanced therapy approvals. Therefore, advances in regenerative medicines in China might not extend to other regions if ethical or efficacy standards are not met.
• Increased domestic development of immuno-oncology (IO) drugs in China is expected to compete with geographic expansion of global IO developers to China over the next few years. There are almost 400 pipeline IO drugs in development in China, 90% of which are being developed by Chinese companies. R&D of domestically developed immune checkpoint inhibitors has been a particular focus of the Chinese government. In addition, the majority of IO (and regenerative medicine) drugs are CAR-T cell therapies. While there is significant focus on IO and regenerative medicine development, there are few API biologic facilities in China to manufacture these products, when compared to API chemical manufacturing capabilities.
• China is a global leader in API chemical manufacturing and has the largest number of API chemical manufacturing facilities in the world. However, manufacturing scandals, the ongoing US trade war, and COVID-19 supply chain disruptions could negatively impact its position in this area. Concerns over China’s history of manufacturing contamination scandals, including API, could damage the country’s reputation abroad, at the critical time when the government is striving to promote the industry on a global scale. President Biden has flagged the US’ dependence on China as a national security threat based on supply chain issues that occurred during the COVID-19 pandemic and highlighted plans to move pharma manufacturing from China to the US. However, the pharma industry has largely been wary of these plans, and it remains unlikely that any significant changes will be made to API supply from China.
• China is a leader in many emerging technologies such as artificial intelligence (AI), 5G, and 3D printing, all of which have the potential to transform the pharma industry and the wider healthcare industry. China is poised to become a leader in emerging technologies in pharma based on the foothold it has in many of these areas. There are several examples of companies utilizing AI, 3D printing, and 5G in drug R&D and manufacturing, which will lead to more efficient and cost-effective pharma smart processes.

Scope

• This report provides an assessment of the major industry, regulatory, macroeconomic, and technology trends shaping the Chinese pharma industry.
• It provides detailed analysis of deals, clinical trials, marketed and pipeline products, and contract manufacturing.
• It also provides an overview of key regulatory and market access information, market drivers and barriers, and key players in the Chinese pharma sector.

Reasons to Buy

• See what trends are shaping the Chinese pharma market and driving innovation, including key government policies and strategic initiatives.
• See how emerging areas such as immuno-oncology, regenerative medicine, and biosimilars are developing.
• Get an analysis of China's strong manufacturing and outsourcing sector, including plans to further strengthen these capabilities.
• See how emerging technologies such as 5G, artificial intelligence, and 3D printing are set to drive pharma innovation in China.