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China's Forbidden City
China’s Forbidden City

Fresh off launching our company at the CPhI Worldwide Congress in Madrid in October, PaizaBio began business development efforts as the aseptic CMO partner of choice for Western pharmaceutical companies seeking to expand their presence in the burgeoning Chinese injectable market. It quickly became apparent that while the concept of injectable fill-and-finish dosage form manufacture in China to Western quality standards is a very appealing business proposition, PaizaBio’s promise of For China, In China, To Western Standards runs contra to the normal commercial perceptions of many pharmaceutical executives.

Apparently, we have some explaining to do!

Beginning in the 1980’s and continuing through the mid 2000’s, China’s global manufacturing promise was: Quality and volume at an unbeatable low price.

Delivery of that promise to thousands of companies from all over the world helped explode China’s GDP per capita income growth 30 times in almost the same number of years, propelling China from an emerging economy to a global powerhouse as measured by cumulative economic impact and influence.

As a consequence, China no longer serves as a lowest cost manufacturer for multinational corporations nor does the country seek this distinction. Instead, China’s economy is diversifying, and their strategic objective is to move up the food chain by offering higher value-laden exports and thereby increasing per capita GDP to a level that will enhance disposable income for their citizens. This will result in a corresponding increase in domestic consumption, which will serve to insulate China from its historic dependence on exports.

A key aspect of this intentional economic reorientation involves selective targeting of foreign direct investment that adds technology-intensive manufacturing as well as an indigenous fostering of domestic product innovation.

Already, the industrial sector has experienced a tremendous expansion in biomedical research and development level operations, which when coupled with a policy commitment of regulatory oversight to ensure only the highest quality standards are met, lays the groundwork to support an ecosystem required by an emerging innovative pharmaceutical industry.

As part of these policy changes, the Chinese government has just announced plans to implement a pilot program designed to help better provide drug research organizations and companies the opportunity to develop and seek regulatory approval for their new products. One important provision allows for the contracting of large-scale commercial manufacture of their drug products without having to first transfer ownership to the local Chinese manufacturing firm, a critical anomaly that was a major concern of Western pharma.

It was in anticipation of such an important policy change, designed to foster national innovation and investment, that PaizaBio’s business model was formulated and executed.

Back to PaizaBio and our promise, For China, In China, To Western Standards. Our reason for being is to provide pharmaceutical companies with a low risk, fast track entry into the Chinese drug market. The intent is not to produce sterile injectables that meet Western quality standards for export to the United States or Europe, but rather to source the evolving and insatiable Chinese drug market whose potential is larger than North America, South America and the European Union combined. It is this “China Opportunity,” combined with the emergence of injectables as the principal formulation for current and future pharmaceutical products, that PaizaBio will help facilitate for prospective client companies.

China is the oldest civilization in history and presents one of the most complex and dynamic operational business environments for multinational organizations. Just as China is undertaking major changes to their healthcare services, designed to increase access for all Chinese, we at PaizaBio stand ready to assist companies that seek to more fully participate in the unprecedented commercial opportunity that injectable pharmaceuticals afford the astute global company.

In light of China’s new pilot program opening the door for contract manufacturing of pharmaceuticals, our timing couldn’t be better.