Opportunities for contract development and manufacturing organisations (CDMOs) in China continue to grow but many questions remain over what the future of the sector will look like in the world’s second largest pharmaceutical market.
At present, there are three main areas driving CDMO opportunities in China.
First of all, the Chinese healthcare sector has undergone monumental changes over the past few years. This vast country has an aging population of over 1.4 billion people and a fast-growing aspirational middle class which, in some circumstances at least, is prepared to pay more money for healthcare, thus fueling demand for medicines.
The rapidly growing monoclonal antibody (mAB) sector is evidence of this: over 100 biopharma companies operating in China are in need of biologics expertise and talent and CDMOs are the natural fit to provide it.
Secondly, on the regulatory front, recent changes to China’s Drug Administration Law have introduced a set of measures including a market authorisation system similar to those in the US and EU
that should in theory make it easier for both domestic and international CDMOs to operate within the country.
In December 2019, a major, comprehensive revision of China’s Drug Administration Law was passed. One of the key changes in the law was the implementation of the Market Authorisation Holder (MAH) programme, which had been piloted in ten Chinese provinces from 2015-2019.
The MAH system, which is now applicable to all companies wanting to register pharmaceutical products in China, has essentially removed several regulatory hurdles for commercial scale contract manufacturing of drugs. The MAH has handed biopharmaceutical companies the option to either manufacture their drugs themselves or use a contract manufacturer, whereas previously in-house manufacturing was mandatory in order to hold a marketing authorisation.
On the face of it, this sea change has thrown open a potentially lucrative market to CDMOs which beforehand they had no legal access to.
Boehringer Ingelheim was the first biologics CDMO to enter the Chinese market and successfully apply the MAH system through its collaboration with BeiGene for the monoclonal antibody, tislelizub.
Thirdly, but no less important, is the fact that many Chinese pharma companies are keen to tap into international markets and CDMOs can be the logical bridge to this aspiration, given their expertise and experience in bringing products to the global market, where prices are often much more attractive than those in the Chinese domestic market.
Change is afoot in China, and via interviews with industry experts, this trend report seeks to explain how recent regulatory reform has impacted the pharmaceutical and biopharmaceutical outsourcing sector in the country and whether the government’s newfound emphasis on innovative products will transform how CDMOs are perceived in this complex but potentially lucrative market.
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