AstraZeneca increases affinity for China

By Kirsty Barnes

- Last updated on GMT

Related tags: Astrazeneca, Pharmacology

AstraZeneca's affinity for China continues to escalate as the firm
announced its first clinical pharmacology investment in the

A new unit was set up by the drug giant in collaboration with Peking University 3rd Hospital and aims to speed up the time it takes for new 'Western' medicines to reach the thirsty Chinese market, by establishing a "faster, more efficient and flexible link"​ between AstraZeneca's Phase I studies and its Phase II & III clinical research projects. The UK-based drugmaker said it will provide the hospital with personnel training, system audits and consulting services, and will also invest to upgrade facilities necessary for clinical research of medicines for infections, diabetes, and cardiovascular diseases. Several companies along with AstraZeneca are looking to exploit the growth of China within the pharma industry. Over the next three years, China is predicted to become the joint fifth largest pharma market, alongside the UK with an estimated value of $24bn (€18bn), according to data from the Boston Consulting Group. "The development opportunity is enormous in China,"​ said company CEO David Brennan. AstraZeneca has been dipping its toes in Chinese waters for some time, establishing an Asia Programme Team in early 2004 in order to identify and evaluate suppliers; provide support to local people on the ground; develop processes, agreements, make risk assessments and manage relationships; and identify, influence and execute projects. However, the company has been pursuing a foothold in the country more aggressively of late. In May last year the firm announced planned research and development investments of $100m over the next three years and subsequently set up a dedicated R&D base in Shanghai at the beginning of this year. "China plays an increasingly important role as an emerging market in AstraZeneca's global strategy,"​ said Brennan. More recently, China has also begun to play a starring role in the company's future plans for outsourcing, after it announced a ramp up of its externalisation strategy at the beginning of the year in an effort to trim down in size, increase productivity and reduce costs. ​ The company's Shanghai R&D site also contains a sourcing centre, which will increasingly be relied upon to obtain active pharmaceutical ingredients (APIs) and chemical intermediates, along with other outsourcing products and services (e.g. packaging materials, contract R&D services, laboratory equipment and chemicals, contract formulation and packing) from China, for its global business. The firm is making plans to "exit making APIs in our own plants over the next 5 to 10 years,"​ Marc Jones, VP Global External Sourcing, AstraZeneca, told in an earlier interview. Currently, AstraZeneca produces 85 per cent of its APIs at its own manufacturing sites. Although AstraZeneca has taken quite a large leap in the direction of China, it is one of a number of large pharma firms starting to plant roots and/or adopt outsourcing strategies in the region, as they feel the squeeze from skyrocketing R&D costs and product price pressure. The country's 2001 entry into the World Trade Organisation (WTO) and the government's efforts to tackle intellectual property deficiencies, as well as the establishment of a Chinese drug regulator - the State Food & Drug Administration (SFDA) - have all helped to breathe new life into China's pharmaceutical industry. In addition, international investors are being encouraged by ongoing government and regulatory body efforts to improve the business environment, conduct and standards within this burgeoning pharma industry. Slowly China is moving from simply a low-cost manufacturing base into a place where companies are increasingly staring to trust certain aspects of their R&D and clinical trial activities in order to gain cost benefits in these areas also.

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