Merck Serono: new plant to make drugs deemed essential by China

Merck Serono's new plant will make drugs deemed essential by China

Merck Serono has announced plans to build an $80m plant for the production of diabetes and cardiovascular drugs in China.

The new plant - located in the Nantong in the Northeast of the country - will produce Merck Serono's antidiabetic Glucophage, the hypertension drug Concor and the hyperthyroidism treatment Euthyrox for the local market in a project expected to be completed in 2016.

All three products are included in the latest version of China's essential drugs list (EDL), which restricts the prices of certain pharmaceuticals deemed vital by the country's government and controls the bulk purchase of pharmaceuticals by provincial authorities.

The drugs' inclusion on the EDL was acknowledged by Merck Serono CEO Belén Garijo, who said: “We are proud to be one of the first multinational companies investing in a local site focused on the manufacturing of medicines referenced in China’s essential drug list."

"By bringing high-quality medicines made in China to a broader population, in full alignment with the Chinese government’s goal to increase access to quality products.”

Some observers - including Frost & Sullivan healthcare analysts Zhong Hongyue - suggest this is the main motivation for the new plant. Hongyue told Chinese news website Global Times that: "Local production of the drugs could help Merck to lower its costs."

But, this may only be part of the picture. When completed the facility will be the second largest Merck Serono facility anywhere in the world, indicating the importance firm places on the Chinese pharmaceutical market.

This idea was undelined by Allan Gabor, General Manager and Managing Director of Merck Serono in China who said: “With our research center, our development capabilities, our commercial presence and this new manufacturing facility, we are building for the future in China by investing across our value chain.”