Research and development
With their low budget for research and development, China’s pharmaceutical makers are in a different league from the multinationals, but they do enjoy certain advantages. Many Chinese companies not only produce the dosage forms (such as tablets) but also own the pharmacies where they are dispensed, as well as the distribution networks that deliver them to the hospitals, where nearly 80% of drugs are sold. In addition, Chinese companies can produce generic versions of branded drugs for a fraction of their price.
Of the 3,000 pharmaceuticals - not including traditional medicines - manufactured in China since the 1950s, 99 percent are copies of foreign products, as are almost 90 percent of China's biotech products. Most Chinese companies - even joint ventures - compete with each other for the same generics. Many are struggling for survival; more than 32 percent recorded losses in 1999, according to the Pharmaceutical Department of National Development and Reform Commission.
Moreover, compared with international pharma giants, Chinese companies are not only small, but are weak in technology and often lack capital. The total R&D expenditures for Chinese-owned pharma businesses amounted to less than that spent by a single major Western pharma company.
There are presently more than 5,000 research and development (R&D) institutions in China, but only a handful of them are able to compete internationally in certain areas.
The R&D system consists of specialized research institutes, major universities, biotechnology companies, and R&D divisions of large pharmaceutical enterprises. In recent years, mid- and small-size biotechnology companies are developing at a rapid pace. There are more than 1,000 such entities nationwide at present, and more than 30% of them are privately owned. Special governmental funds are available to promote this type of entrepreneurship.
During the past several years, some Chinese pharmaceutical companies began to establish R&D infrastructures largely due to internal growth needs, but their primary focus is directed toward improving existing technologies or developing generic version of new drugs.
Companies to expand research efforts in China include GlaxoSmithKline, Bayer,Bristol-Myers Squibb, Merck & Co and Eli Lilly & Company.
Comparison of Chinese and Western pharmaceutical companies
Like its U.S. and European counterparts, the Chinese pharma business is regulated by government agencies, and competition is fierce in the business. The biggest differences include following:
· most Chinese pharma companies are generic drug manufacturers;
· a large number are traditional Chinese medicine manufacturers;
· hospitals are still the major drug market;
· patent issues are the greatest weakness of Chinese producers.
When the Chinese are developing an API they try patent searches via the internet, but are limited by the scope of the available services. Few factories yet have patent attorneys on staff, but for the larger pharma groups who are seeking partnerships with large Western firms, this may come soon.
The Chinese business environment is mainly relationship-based, and this is reflected in the pharmaceutical business. Establishing relationship with a pharma companies through personal connections is a common way to contact Chinese pharma companies. Attending pharmaceutical exhibitions, pharmaceutical conferences or seminars is another approach, as is holding a press conference attended by officials of related government agencies or associations and senior pharmaceutical executives.
Zhejiang Huili Capsules Co., Ltd.
Huili Imports and Exports Co., Ltd.
Add：Ru'ao Industrial Zone, Xinchang, Shaoxing, Zhjiang, China
Contact：Mr Barney Wang , Mr Cage Wang
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