Its fast-moving, cut-price drugmakers stand to make more money abroad than at home
After america, China is the world’s largest developer of new medicines and its companies ran about a third of the planet’s clinical trials last year. That is up from just 5% a decade before (see chart 1). It is also rising to the forefront in critical areas of research, such as those relating to cancer. Investors have taken note. Shares in Chinese biotech companies have surged by 110% this year, more than three times as much as their American peers.
For much of the past century drug discovery was dominated by Western firms, the companies collectively often called “big pharma”. No longer. These companies face some of the steepest “patent cliffs” in their history, as drugs expected to generate more than $300bn in total revenue over the next six years will lose their patent protection by 2030. To plug the gap, big American and European firms are scouring the globe for promising molecules, and increasingly, it is finding them in China.
The timing is awkward. America wants to reduce its reliance on Chinese supply chains, since it remains in a trade war that is only temporarily on hold. The government frets already about China’s chokehold on active drug ingredients, for example. And rumours fly around that the White House plans to crack down on Chinese pharma, though nothing has happened so far. Yet when it comes to creating the next generation of medicines, America’s drugmakers, and its patients, are likely to become more, not less, dependent on Chinese innovation.
Cancer remains a central focus for Chinese firms, but they are also branching out. Weight-loss drugs are a hot target. Patents on semaglutide—the active ingredient in Wegovy and Ozempic, the wildly popular weight-loss treatments made by Novo Nordisk, a Danish pharma giant—are due to expire in China next year. That has sparked a rush to prepare generics. Yet local firms are not just copying. Bloomberg Intelligence, a research firm, reckons there are 160 new obesity drugs in development worldwide; about a third of them are Chinese.
Full story: Chinese pharma is on the cusp of going global (Economist)