China Opportunity

With nearly 1.4 billion citizens, China’s population is larger than North America, South America and the European Union combined. Its economy has expanded exponentially. The per capita increase in GDP has increased 30 fold in the last 35 years. China’s economy is second only to the United States and leads the world in attracting foreign investment.

If you’re a Western-based pharmaceutical company, you must be in China.

Even though per capita expenditure for health care is a fraction of the West, increasing affluence and attention to public health is on the rise. Government policies are seeking to level the playing field between urban and rural areas, the latter of which have historically suffered from a lack of access to modern medicine and conveniences.

The confluence of rising affluence, growing health awareness, and political support has created the fastest growing market for pharmaceutical products in the world — 21 percent annual growth from 2007-2012 — and it is projected to grow at multiple digits for the foreseeable future. At the current rate of growth, China’s pharmaceutical market will reach equivalency to the United States, in value, as early as 2021.

The China pharmaceutical market expansion comes at a time of stagnant, and in some cases, contracting growth in the United States and Europe, where increasingly maturing product markets, combined with the political reality of paying for the health care of an aging population, threaten traditionally strong sales.

Expansion into high growth markets like China will be essential for all United States and European Union-based pharmaceutical companies that want to maintain a strong balance sheet. Although many multinationals have already expanded commercialization activities in Asia, downstream manufacturing efforts are almost exclusively limited to solids and oral dosage forms. This despite the fact that for many key products and promising pipeline projects, the primary route of administration is increasingly some type of injectable formulation, a dosage presentation requiring highly technical and critically demanding parenteral aseptic fill-and-finish manufacturing process. Aseptic fill-and-finish manufacturing is conducted almost exclusively in the United States and Europe, and is subject to import licensing by government authorities, presenting an unpredictable and expensive variable for sourcing the product to market.

For growth-seeking multinational pharmaceutical corporations, manufacturing in China offers:

  • Unprecedented potential
  • Significant economies of scale, from upstream manufacture through downstream commercialization
  • Sino-influence in export to developing regional countries, thus allowing rapid market penetration to Southeast Asian region
  • Optimization of in-country logistics on a consistent cost basis
  • Minimization of foreign exchange risk
  • Allows corporate financial hedging with a top five currency, which is not exchangeable on the open market
  • Potential to capitalize on the imminent expansion of the biosimilars market in a country which is a late adopter of biological/large molecule products

PaizaBio has an existing and proven position in the Chinese aseptic fill-and-finish contract-manufacturing sector. We are your contract-manufacturing portal in China, for the Chinese market, to your standards. Let’s talk.

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