Declining
R&D productivity is a big problem for all the pharma giants.
AstraZeneca believes it has found the answer in China where it plans to invest $100m in R&D over the next three years.

At
first sight, the announcement seems to be another twist to the China
versus India outsourcing debate. While China's attractions as a
low-cost manufacturing centre are well known, the country wants to move
up the value chain and compete with India in attracting white-collar
outsourcing work such as software development and pharmaceutical
research.

In recent years, India has been the
preferred destination for pharma multinationals seeking a more
cost-effective way to do R&D, particularly for drugs aimed at
emerging markets. For example, AstraZeneca's three-year old Bangalore
facility is focusing on tuberculosis.

But AZ plays
down the competition angle and says its new Chinese “Innovation Centre”
— its location is still to be decided — is different from its other
R&D facilities because it will focus on the needs of the local
market, developing knowledge about Chinese patients, biomarkers and
genetics. It will initially concentrate on cancer.

In
announcing the new centre, AZ could not help but mention the problem of
intellectual property protection, despite the conciliatory noises on
this topic from Beijing. Fake drugs are not quite as endemic as fake
DVDs but they are a growing problem in China — and a potential killer.

AstraZeneca,
which has 2,200 employees in China, claims it was first big pharma
company to include China in large-scale international multi-centre
trials and establish a clinical research centre in the country.

China's pharmaceutical market is estimated at $13bn a year and is considered an attractive target by international companies.

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