China

India may lose outsourcing deals after Mumbai attacks

Calisha Myers — Mon, 01 Dec 2008 16:43:42 -0500

A number of pharmaceutical companies have canceled visits to India after last week's tragic attacks in Mumbai. According to industry experts, Indian drug makers may lose out on opportunities to secure new outsourcing contracts as a result. Two large networking events, P-MEC India and CPhI Worldwide, were to open last week, but both were postponed. Most of the pharma companies in Mumbai also closed their offices last week following the attacks. But according to industry sources, although "the attacks may have an impact in the short-term, [they] will not have any long-term effect," India's Business Standard reports.

Others still fear the attacks will have a lasting impact. "Such repeated terrorist attacks will mar our business prospects, especially from Fortune 500 companies, who are closely observing the developments," said Ranjit Shahani, president, Indian Merchant's Chamber and vice-chairman and managing director of Novartis India. "Apart from the global meltdown, this will add more worries to our economic growth."

Some say India's loss could be China's gain. China has not had to deal with terrorist attacks and has appeared more economically stable, Ajit Kamath, chairman and managing director, Arch Pharmalabs, tells the Business Standard. "India will have to assure the international community of tough measures, both on the security and economic front," he explained.

- read India's Business Standard for more

FDA goes to China

Christe Bruderlin-Nelson — Wed, 19 Nov 2008 08:13:01 -0500

The FDA today opened an office in China's capital city Bejing to help monitor imports to the United States. The office is the first FDA office beyond the borders of the U.S. It's part of the agency's new global safety strategy, as companies increasingly move operations offshore with plans to import products back to the U.S. In addition, Chinese quality officials will set up a station in the U.S.

While concerns about infant formula, food and toothpaste have brought headline-grabbing attention to Chinese imports, problems with pharmaceuticals, including contaminated blood thinners, are a major concern as well.

The vice health minister and head of China's food and drug administration, Shao Mingli, said that the FDA presence in China will provide "a very clear signal to the whole world." U.S. Health and Human Services Secretary Mike Leavitt said that this marks a new strategy to "build safety into products at every step of the way," rather than just monitoring it upon importation at U.S. boarders.

The two countries will work cooperatively to detect contamination. Together, they will require greater corporate responsibility and increase data and information sharing.

The FDA will soon open two more offices in the Chinese cities of Shanghai and Guangzhou, as well as offices in Europe, India and Latin America. The new China offices will oversee regulation, policy, food, medicines and medical devices.

- read the Associated Press story
- find what the LA Times said
- see the Forbes version

Pharma bets its chips in developing countries

Tracy Staton — Mon, 17 Nov 2008 11:51:59 -0500

We've been talking a lot about drug sales in the developing world lately, as Big Pharma eyes markets such as Brazil, China and India--the so-called BRIC countries--to make up for stalling sales in the U.S. This week's Economist comes to the party, taking a look at America's declining contribution to pharma profits, and just how developing countries might help take up the slack.

As the magazine rightly notes, pharma's a bit late. Other industries started targeting the growing markets in Asia and Latin America years ago. While consumer brands and high-tech companies poured billions into those countries, drugmakers sniffed about weak intellectual property laws and low per-capita incomes. Now, however, that's changed, partly because other countries have started to beef up IP protections and partly because incomes have been growing.

But at least half the reason is that China, India, et al, are among the only countries pharma hasn't fully tapped. Consider a new report from Decision Resources, which predicts that China's market for antidepressants will triple by 2012 to $226 million. The research firm expects SSRI sales to post continuing double-digit growth there. Plus, Chinese docs and patients consider Western-made antidepressants to be better-quality than those made domestically.

The roll call of companies looking eastward and southward includes GlaxoSmithKline and Pfizer, which just announced that it would put emerging markets on its priority list. And then there's Abbott Laboratories, which has quietly been building up its Chinese business and now ranks as that countries' No. 1 outside pharma firm. Plus, news is just now breaking that AstraZeneca is building up a supply hub in China that's aimed at helping the company not only build its "In China for China" manufacturing strategy, but also its "In China for Global" business.

Meanwhile, look no further than the FDA, which is cutting ribbons at three new offices in China this week: Beijing, Guangzhou and Shanghai. "Establishing a permanent FDA presence in China will greatly enhance the speed and effectiveness of our regulatory cooperation and our efforts to protect consumers in both countries," HHS Secretary Michael Leavitt said in a statement.

So pharma appears to be meeting itself coming and going, from developed nations to developing countries and back again. And the FDA won't be the only ones watching.

- read the story in The Economist
- see the AstraZeneca news at Supply Chainer
- check out the release on China's antidepressant market
- see the AP article about new FDA offices

Novo plots $400M Chinese plant

Tracy Staton — Fri, 07 Nov 2008 10:05:52 -0500

In another confirmation of pharma's eastward gaze, Novo Nordisk is plowing $400 million into a new factory for diabetes treatments. The plant will produce insulin-based meds for China and other Asian markets. It will be Novo Nordisk's biggest-ever investment outside its home country of Denmark.

As you know, Big Pharma has been pinning new hopes on emerging markets like those in Asia. Growth in the U.S. is slowing, of course, so drugmakers are looking to the developing world as one source of new revenues. GlaxoSmithKline is looking to beef up its operations in China and India, for instance, and Merck's Indian subsidiary is staffing up in anticipation of a series of new product launches there.

Though China's economic engine looks to be shifting to a lower gear as well, its healthcare markets are still underserved. As Lars Rebien Sorensen, Novo's CEO, told the Financial Times, "For over a decade we have realized that the diabetes market in China would grow quickly and nothing in the recent financial crisis has really changed that."

- read the story in the FT

Glaxo regroups sales reps by specialty

Tracy Staton — Thu, 06 Nov 2008 09:37:35 -0500

Some new details out today about the big sales cuts at GlaxoSmithKline's U.S. operations. As the company shifts folks around--and sheds about 1,000 jobs, net--it's going to group its pharma folks by treatment class rather than by geography, as it has in the past. For instance, respiratory sales would encompass the asthma drug Advair and allergy med Veramyst. GSK spokeswoman Mary Anne Rhyne told the Wall Street Journal that these changes are designed to respond to doctors' requests. "[T]hey want to see fewer reps," Rhyne said, "but want to see people with specialized training and information."

Meanwhile, the loss of U.S. sales reps will mean gains in Asia, Forbes reports. Rhyne told the magazine that streamlining in the U.S. will help Glaxo look for new business opportunities in the U.S., yes, but also in China and India. Analysts see the changes a bit more starkly: "It is clear that Glaxo's future lies in the East as emerging markets represent a huge opportunity," a Charles Stanley analyst said. And CEO Andrew Witty (photo) knows something about that region. He worked as an economic adviser to the Governor of Guangzhou from 2000 to 2002.

- read the WSJ article
- check out the coverage in Forbes

Can FDA ever safeguard China-made meds?

Tracy Staton — Mon, 03 Nov 2008 10:11:52 -0500

We all know that China has rocketed forward in the drug-manufacturing business, especially generics. Some 43 percent of plants applying last year to supply active ingredients for generic meds were located in China, versus a mere 13 percent in the U.S. And in recent months, as Big Pharma has faced unprecedented challenges to its bottom line, more and more branded drugmakers are turning to China, too.

But a big question mark still hangs over Chinese drugs and drug ingredients, as Gardiner Harris illuminates at length in this week's New York Times Magazine. China's plants and their output lack the scrutiny of manufacturing facilities in Europe, say, or the U.S. And even when the FDA finally opens its long-promised offices there, the vast numbers of factories churning out pharma-stuffs will still fall far behind on the oversight scale.

It's no surprise that, as Harris found, drugmakers just don't want to talk about the issue. No one wants to admit how difficult it is to regulate plants on the other side of the world. Nor is it surprising that the FDA "is increasingly beset by a sense of futility" when it comes to regulating foreign-made goods: not only chronically underfunded, understaffed and technologically primitive, the agency faces enormous cultural and bureaucratic barriers to doing its due diligence in China.

Not to say there isn't hope: For the first time in years, perhaps decades, there's a strong political will to get the FDA the resources it needs to protect the public from substandard drugs and drug ingredients. But cash-strapped drugmakers are sending their business to China at a faster and faster pace, so the agency will have to leap far forward to simply stand still. Whether Washington can deliver enough resources--and the FDA can work effectively enough--to keep up as pharma continues its headlong rush eastward is an open question.

- read the NYT story

Industry Voices: Creating a center of excellence in China

Mon, 27 Oct 2008 15:10:36 -0400

Stephanie Wells is the Senior Vice President of the U.S.-based CRO Charles Rivers Laboratories.

With its impressive pool of native scientific talent, large population with unique therapeutic needs, rapidly growing economy, and rising interest in Western products and services, China is emerging as a powerhouse in the life sciences industry. However, in the past year a series of product contamination incidents have beset China's manufacturing industry, emphasizing how vital it is to establish Good Laboratory Practice (GLP) so that China's potential as a quality pharmaceutical producer can be fully realized. As China continues to evolve as a center of R&D innovation, providing GLP-compliant preclinical services is critical to fostering this culture, as well as to helping academia, scientific societies, and biopharmaceutical organizations accelerate their drug development programs.

To accomplish this goal, it is critical to make a strategic investment in local resources and staff to support these drug development programs. A critical component of this investment is the transfer of expertise and western lessons learned to Chinese talent, including high standards of research, safety, humane care, and good laboratory practices. The goal is not to have a Chinese facility that is staffed and operated from the west, but to create an autonomous operation that meets the same regulatory and quality standards as its Western counterparts.

Creating a Culture of Compliance

The most important aspect of successfully replicating GLP procedures in a new location is to rigorously train the people responsible for carrying out the procedures. It is at this fundamental level that quality can be most easily compromised. In other words, personnel can make or break a GLP facility.

To guarantee the quality of the knowledge and actions of personnel, the staff needs to be well trained. This is accomplished by either training them at other GLP-compliant facilities before placement at a China facility or transferring key management positions from those GLP-compliant facilities to China to train and oversee staff on-site. Ideally, a combination of these plans should be implemented to achieve effective training.

After establishing a base of highly-trained staff members, the GLP standard must be maintained. From the start, the goal of all training should be to create and sustain a culture of compliance, where compliance is not a goal to be reached daily, but the normal state of affairs in which any deviation is immediately evident and quickly corrected. This is maintained through orientation and refresher training, as well as quality assurance initiatives.

An Assurance of Quality

When setting up a facility in a different country, the amount of regulatory complexity that is involved increases significantly. Achieving these new quality standards in addition to meeting domestic GLP standards while in a foreign environment takes both prior planning and continual oversight.

Much like the aforementioned training, which in itself is an important component for quality assurance, engagement and importation of key quality assurance personnel is essential to the success of any such offshoring venture, and not just after the facility has opened. Quality assurance starts in the planning stages, with detailed validation plans drawn up by experts in the field. Validation plans should include facility construction, standard operating procedure implementation, and staff training. Throughout the planning stage and all the way through to implementation, it is vital to involve international experts in addition to imported quality assurance personnel, in conjunction with local experts in Chinese regulations and processes.

Finally, a Quality Assurance unit should be instituted and empowered to monitor compliance once the site is functioning. Quality audits should be conducted frequently, and continued process improvements should be developed and implemented wherever possible to more efficiently meet GLP standards.

An Integration of Local Resources

Although the above two steps involve the importation of a considerable amount of skill and resources, it is also essential that local resources are engaged and incorporated. In fact, eventually a company should come to rely on the resources available locally.

The main reason for importing resources at first is one of trust. The suppliers and vendors that a company normally relies on for support have already been vetted and have proven over time to be dependable. However, for fiscal and geographical reasons, that same pipeline of resources might be impractical or impossible to use on the opposite side of the world. As a result, relying on domestic suppliers as a long-term strategy is untenable.

Fortunately, China has a great deal to offer with respect to local expertise. In addition to knowledge of local regulations and the prodigious scientific talent of the country, there are plenty of high-quality suppliers and vendors available. However, these local resources need to be subjected to the same quality control scrutiny to which the domestic pipeline is subjected. In fact, by importing resources from domestic sources at first, a company can buy itself the time it needs to properly examine and establish local China suppliers and vendors for GLP-compliance.

Conclusion

To achieve a culture of compliance, effective quality assurance procedures, and the successful integration of dependable local resources, it takes an immense amount of planning before the first brick is laid in a new China venture. To reiterate, the goal is to create a preclinical center of excellence in China and an offshore partner for multinational and local biopharmaceutical companies. By definition, such a goal is best achieved by leveraging domestic experience and importation in the early stages to ensure quality standards are established and replicated. If the appropriate blend of domestic expertise, western compliance processes, and oversight are linked with proper utilization of local resources, an efficient GLP-compliant facility can be established and maintained. Once created and maintained, this will go a long way toward delivering the enormous potential that China offers in helping the pharmaceutical and biotechnology industries enhance development of more effective therapies, both in China and the rest of the world. - Stephanie Wells

Sanofi to expand in China

Christe Bruderlin-Nelson — Wed, 22 Oct 2008 05:46:10 -0400

France's Sanofi-Aventis announced it will expand its research and development functionality in Shanghai, China. In a new partnership with the Shanghai Institutes for Biological Sciences, the company will work on drug discovery in the areas of cancer, diabetes and neurological disease, and will put a new biometrics facility in Beijing. The facility in Shanghai has been there since June of 2005 and functions in the full spectrum of drug discovery.

The new facility in Beijing, which it hopes will be in full operation by year's end, will be more specialized, handling specifically data management, study design and statistical analysis.

"A comprehensive development program for vaccines is already on-going in China and we are looking forward to its expansion in the near future," said Dr. Michel DeWilde, Senior Vice President, Sanofi Pasteur R&D.

- read Sanofi's release

Pharma's new favorite outsourcing spot: China

Tracy Staton — Fri, 03 Oct 2008 10:23:43 -0400

Quality-control fears notwithstanding, China has knocked India off the catbird seat as pharma's favorite spot for outsourcing. According to a new report from PriceWaterhouse Coopers, China beats every other Asian country as an investment and contracting destination, followed by India, Korea and Taiwan. The countries all were evaluated by cost, risk, and market opportunities.

And it's not just low-cost production that's luring pharma to Asia, either. The report found that the region is growing in stature as a source for innovation and discovery. Plus, local markets are burgeoning, giving pharma the potential for lots of new emerging-market sales.

The various countries have different strengths, with China and India the primary drivers of pharma growth in the region. Singapore, on the other hand, is considered more of an R&D specialist, while Korea and Taiwan are emerging as competitors for pharma investment and business. What's contributing the the region's magnetism? Greater attention to intellectual property protections, for one. Cheaper clinical trials, of course. And an explosion of growth in certified contract manufacturers. In India, for example, there are more than 100 FDA-approved pharma plants, the largest number in any country outside the U.S.

- read the outsourcing release

Olympics spawned API shortages

Tracy Staton — Fri, 05 Sep 2008 10:11:38 -0400

Like some drugs, the Beijing Olympics has had adverse side effects. As you know, China shut down an entire swath of industry to clear the air over Beijing for the games. Among the shutdowns were plants that churn out raw materials for drugs and active pharmaceutical ingredients. During the games, Indian drugmakers were finding active ingredients scarce, and costly, too. And now South African pharma companies are complaining of Olympics-based raw materials shortages.

The problem is particularly acute in South Africa, which sets fixed prices for drugs. Though some ingredients have tripled in cost, local drugmakers have had to take the hit. And according to one pharma exec, the Olympics problem has been exacerbated by rising fuel prices and an increase in costs for commodities such as starch that are used in making many drugs. Some small drugmakers have even discontinued certain products because of ingredient shortages and rising prices, putting meds such as antidepressants, diuretics, penicillin, and brochodilators in short supply.

- read the Business Day article
- here's more on South Africa's problems

Big pharma in big China

Christe Bruderlin-Nelson — Wed, 13 Aug 2008 06:18:12 -0400

While many are jumping on the China bandwagon for less expensive manufacturing and research and development, the country is also developing low-cost medicines that seriously undercut U.S. prices and might just transform the U.S. drug industry entirely. Report

Schering-Plough buys China partners

Christe Bruderlin-Nelson — Wed, 13 Aug 2008 06:13:15 -0400

Although the company is staying tight-lipped on the details of the deals, here's a mouthful: Schering-Plough announced yesterday that it purchased Shanghai Pharmaceutical Industry and Shanghai Pharmaceutical Group, and will establish Shanghai Shering-Plough Pharmaceutical as a wholly owned operation in Shanghai.

The buyout comes after a longstanding relationship with the companies, which Schering-Plough has been working with to dispense allergy and skincare products with since 1994.

- see the Schering-Plough release
- read the story at CNN Money
- see what Business Week says
- find the PharmaLive blog post
- get the latest at Forbes

Chinese pharma leapfrogs ahead

Tracy Staton — Fri, 01 Aug 2008 11:50:03 -0400

As if to bolster Big Pharma's recent turn toward emerging markets for growth, a new study has pegged China as the fifth largest pharmaceutical market by 2010. With Chinese pharma sales growing at the rapid clip of 20 percent per year, annual revenues could top $24 billion by that time.

Just to put those numbers in perspective, the U.S. pharma market stood at $286 billion in 2007 sales, according to IMS Health. But given the fact that China represented only 5 percent of the worldwide drugs market in 2003, moving up to the fifth-largest market would be quite a leap.

- read the story at PharmaLive

Bayer eyes 20% annual growth in China

Tracy Staton — Tue, 08 Jul 2008 10:09:10 -0400

Like its Big Pharma brethren, Bayer is casting a gimlet eye on the drug market in China. The company says it's aiming for 20 percent-plus annual growth in China for each of the next five years. Most forecasts show Chinese healthcare growing at a 20 percent clip yearly, and the German company means to expand there faster than the market does to keep its market-share lead there.

Bayer currently operates four manufacturing plans in China and has plans to finish a $39 million expansion of one facility in Beijing that makes aspirin, diabetes meds, and other drugs. Last week, the company wrapped up its $156 million buyout of over-the-counter cough and cold meds from China's Topsun Science and Technology Quidon Gaitianli Pharmaceutical. And yesterday after its Chinese growth pledge--but not only because of it--ING reiterated its "add" rating for Bayer stock.

- check out the post at Pharmalot
- see the story at Trading Markets

Microbix teams with China on vaccine plant

Tracy Staton — Tue, 24 Jun 2008 10:08:01 -0400

More evidence that Asia is the place to be these days: Canada's Microbix Biosystems is plotting a $200 million flu vaccine plant in Hunan province. The cooperative deal puts Microbix in partnership with the Hunan government, which will put up $100 million of the funding. The rest will come from Microbix's licensing partners.

Considering the growing importance of Asian markets, the steady drumbeat of avian flu news, the fact that flu viruses tend to emerge first in Asia, and the burgeoning vaccine market worldwide, Microbix could find itself perfectly positioned when the plant is up and running in 2013. The plant will be capable of churning out 100 million doses of flu vaccine annually using Microbix's proprietary Virusmax technology, for which it garnered a Chinese patent last month.

In a funny little quirk, the deal includes a "token of goodwill and friendship" for the Chinese people onsite: a full-scale replica of the birthplace of Dr. Norman Bethune, a Canadian doctor who became a hero in China for his medical work with the communist army resisting Japan in the late 1930s.

- check out the Microbix release
- see the Canadian Press article

AZ's expanded China focus pays off

Tracy Staton — Fri, 13 Jun 2008 10:49:51 -0400

Big Pharma has been talking a lot lately about pushing into emerging markets, seeing as that's where the biggest growth prospects lie. But how, exactly, does a drugmaker go about doing that? The Wall Street Journal lifts the curtain on AstraZeneca's forays into China, particularly beyond the typical commercial strongholds in Beijing and Shanghai. AstraZeneca hired a local sales force--now 2,000 strong--and sent them into the hinterlands to spread the company message to hospitals and doctors.

The focus on fringe cities, such as Urumqi in in the far Western province of Xinjiang, proved fruitful. China sales mushroomed to $435 million last year from $85 million in 2001, making the company No. 1 in the Chinese market. And this foundation in China could position AstraZeneca to capture more than its share of the multibillion-dollar growth expected in China's prescription market. Don't think AstraZeneca's competitors haven't noticed; Novartis, for one, has beefed up its sales force and expanded the number of Chinese cities it targets.

- read the article in the WSJ

Six die after Chinese antibody injections

Tracy Staton — Mon, 02 Jun 2008 10:42:02 -0400

Just as the heparin hoopla was starting to settle down, now China is reporting that six patients in Jiangxi province have died after injections of immunoglobulins. All the injections came from a single batch made by Jiangxi Yabo Bio-Pharmaceutical, which has been ordered to stop producing the drug. China's State Food and Drug Administration has launched an investigation. Penalties for pharma-tampering are severe in China; last month, five officials of a company that sold a tainted antibiotic were sentenced to seven years in prison.

- read the AFP story
- check out the Associated Press article

Bureaucracy slows FDA offices in China

Tracy Staton — Tue, 27 May 2008 09:17:28 -0400

Easy to announce you're opening offices in China. Not so easy to actually do it--especially when you're wrestling with Chinese red tape. That's what the FDA is discovering as it struggles to establish a presence in Beijing, Shanghai, and Guangzhou. Apparently, China's health ministry is expressing support for the new offices, which will employ 13 people. But the foreign ministry has yet to give the required stamp of approval. And once the office itself gets the OK, then the FDA workers will all need visas--yet another round of red tape.

Next on the FDA's list of overseas locations: India, according to HHS Secretary Michael Leavitt. After that, its Central America. Good thing the Senate approved $275 million in additional funding for the agency last week.

- see the Wall Street Journal story

Big Pharma changes rules in emerging markets

Tracy Staton — Wed, 21 May 2008 11:04:31 -0400

If that well-meaning advice-giver in The Graduate were speaking to pharma today, he might well say, "Two Words: Emerging Markets." That phrase is getting more and more traction these days, as drugmakers wake up to the fact that the coming growth areas on the globe aren't found in North America or Europe. And as the importance of countries such as India, China, and Brazil grows more evident to Big Pharma, so is the fact that the strategies that work in the super-industrialized world won't serve in countries where the middle class is just now growing by leaps and bounds.

We all know that the pharma majors are moving into R&D in places like India and China, and that more and more are outsourcing their manufacturing to emerging countries. But to sell products there, on the ground, they're trying things that they'd never do elsewhere. "Differential pricing," for one thing, which takes into account per-capita income in setting prices; soon, there might even be different prices for middle class Indians, for instance, and the subcontinental poor. Standard arguments against it--that these cheaper meds will get resold on the black market, for instance--are falling by the wayside. What else might Big Pharma do to gain a major foothold? We'll have to watch and see.

- see the story in The Economist

Generics makers face Chinese threat

Wed, 14 May 2008 06:59:57 -0400

In an interesting twist on the usual generics news, it's the copycat makers who are predicted to suffer as competitors undercut their products. The source of this competition? None other than China, where generics companies are gearing up to supply finished products--rather than just pharma ingredients--for the first time. IMS Health is predicting that the Chinese manufacturers will "undercut all others on price." The result? Pain for international generics companies and, in trickle-up fashion, brand-name players, too.

Meanwhile, Goldman Sachs has downgraded its outlook for the generics sector as a whole, citing weak-to-mixed first-quarter results and fewer big new copycats on the horizon as some brand-name drugmakers ironed out their differences with generics challengers. The only two companies Goldman still favors are Teva and Mylan.

- see the China news at Pharmalot
- check out the downgrade story at CNN Money
- find the Goldman note at Barron's