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.
