- Pfizer will invest $350 million in a new biotechnology hub in China, the first such center in Asia for the pharma giant and a major bet on the growing Chinese drug market.
- Located in Hangzhou, China, the plant will eventually produce biosimilar drugs for both China and the global market, the company said Tuesday. Pfizer expects to complete work on the center sometime in 2018.
- As part of ongoing reforms to its healthcare system, China's drug regulator has sent signals it plans to accelerate the country's often lengthy approval process—a potential boon for foreign drugmakers. But that may be tempered by China's efforts to lower drug prices.
The Hangzhou plant, which Pfizer broke ground on Monday, will be the company's third biotech center globally.
Pfizer aims to produce biosimilar drugs, or nearly identical copies of biologics, when the facility eventually comes online and said it would work with Chinese regulators to ensure the drugs reach markets as soon as possible.
Although drug utilization and spending has increased in China, biologics are still underutilized, according to Bloomberg.
"The local production of high-quality, affordable biosimilar medicines will have the potential to significantly improve the lives of patients not only in China but across the world," said Tony Maddaluna, president of Pfizer Global Supply.
Pfizer will also locate its China division for Biosimilars and Biologics Quality at the Hangzhou site, along with commercial manufacturing.
Manufacturing will be supported by an advanced modular facility made by GE Healthcare. Pfizer said the single-use technology can increase production speed while reducing costs by between 50% and 75% compared to traditional facilities.
Pfizer's investment in biosimilars in China comes at an inflection point for the country. Chinese drug spending is predicted to grow to between $150 billion and $180 billion by 2020, up from a current $115 billion, according to IMS Health. Although growth rates are expected to come down, international drugmakers are understandably eager to expand their presence in that market.
But the pharmaceutical industry has also struggled with China's lengthy regulatory processes and compliance lapses among domestic partners. China's government has recently moved to improve the speed at which drugs are approved, although it also scrutinizing rising drug prices at the same time.
Pfizer noted the improving regulatory environment as one reason the company was eager to pour $350 million in investment.
"We are encouraged by a series of important reforms introduced by Chinese government that will further stimulate the industry to meet emerging health challenges, such as the rising incidence of non-communicable diseases and an aging population; as well as attract both domestic and foreign investment in healthcare and R&D," said John Young, group president of Pfizer Essential Health.
But Pfizer won't be alone. Novartis recently opened its major R&D facility in Shanghai, delivering on its commitment to invest $1 billion in its capabilities in China. And AstraZeneca has also expanded its presence in China.