Chinese pharma aims to out-compete Big Pharma with new $151M insulin plant

Chinese drugmakers plan to strike back--at foreign insulin makers, that is. Zhuhai United Laboratories plans to invest ¥1 billion ($151.4 million) in a new production base, aiming to compete with foreign companies that now dominate the Chinese insulin market, Chairman Choy Kam Lok told China Business News. And dominate they do: Global drugmakers Novo Nordisk, Eli Lilly and Sanofi-Aventis control more than 90 percent of the market.

The new United Labs facility, once complete, will be the largest insulin production base in the country, People's Daily reports. Chinese regulators have already approved the company's insulin products, and the company is revving up for launch. Choy said that new technology will allow his company to turn out insulin products at lower cost, giving it a 10 percent to 15 percent edge over foreign rivals in pricing.

But foreign drugmakers have big plans for China's soon-to-be $1 billion diabetes market. Novo Nordisk alone is spending $400 million on a new factory for diabetes treatments, while Sanofi-Aventis plans to invest $126 to boost its insulin capacity there. Bayer and Bioton are mulling an insulin-drug partnership that would target China.

Apparently, all this foreign action has Chinese companies looking to defend their turf. United Labs says it hopes to grab 10 percent of the market within two to three years, meaning it will have to steal several percentage points from its Big Pharma competitors. "As [foreign companies] sneak into the Chinese marketing, small space is left for local firms to develop in the field," People's Daily said.

- read the People's Daily story