The biopharmaceutical industry is at the edge of the "low-end vortex"

The reporter recently conducted research on the biomedical industry in Beijing, Shanghai, the Soviet Union, and Guangdong, and found that in recent years, multinational pharmaceutical companies have stepped up their efforts in China's layout. Affected by the impact, Chinese SMEs have mostly shifted to second-tier cities. At the same time, domestic biopharmaceutical industry clusters have many parks, scattered companies, difficulties in financing, and low level of standardization, affecting the healthy development of the industry.

Multinational pharmaceutical companies have stepped up their efforts to deploy biopharmaceuticals as one of the fastest growing emerging industries in the world. The pharmaceutical industry in China has developed rapidly in recent years. In the year 2010, the pharmaceutical industry has achieved a total output value of 1,242.7 billion yuan. During the "Eleventh Five-Year Plan" period, the country invested nearly 20 billion yuan in special projects such as "the creation of major new drugs". New products and new technologies have achieved remarkable results, and a large number of large-scale enterprise groups with comprehensive strength have emerged. At present, China can basically produce all commonly used drugs, vaccines, and biologics, but there is still a big gap between developed countries and developed countries in the areas of R&D and industrialization of new drugs.

In recent years, many multinational pharmaceutical companies have begun to implement the strategic layout of the entire industry chain in China. Zhou Zeqi, a deputy head of the Tianjin International Biomedicine Joint Research Institute, who is the chief scientist of Bayer and Wyeth, pointed out that almost all of the top ten pharmaceutical companies in the world have invested in setting up factories or establishing R&D centers in China. The means are already from traditional prescription drugs. Sales change to a strategic full-industry chain layout. In 2011 alone, Novartis acquired an 85% stake in Zhejiang Tianyuan for US$125 million. Pfizer invested US$295 million in a joint venture with Hisun Pharmaceutical. Merck acquired Simcedar Pharmaceuticals, and GlaxoSmithKline converted Haiwang Integrity into a Its sole proprietorship.

The industry believes that China's bio-pharmaceutical industry needs to be vigilantly caught in the “low-end whirlpool” suppressed by foreign companies. Yang Chun, general manager of the largest biopharmaceutical portal “Bio Valley” in China, pointed out that foreign companies’ occupation of Beijing, Shanghai and other industrial highlands directly raised the cost of talents. Some domestic companies had to retreat to Tianjin, Suzhou and other surrounding areas. And in the long run, it is prone to the situation that “no prospects are squeezed out and prospects are acquired”, which causes Chinese enterprises to stagnate at the low end of the industry chain.

Small and scattered reporters interviewed by the park’s enterprises learned that domestic biopharmaceutical industrial clusters are being formed in recent years, but there are many areas in the city where there are many enterprises scattered, less venture capital financing, and low standardization, which is not conducive to industrial development.

According to incomplete statistics, there are more than 4,000 large and small pharmaceutical companies in China, and no one company can enter the Fortune 500. There are more than 20 bio-industrial parks under the banner of national level in China, and there are more than 100 bio-industries in national-level hi-tech development zones, economic and technological development zones, and torch plan bases. The provincial-level development zones are related to bio-pharmaceuticals. There are more than 300 expected. Yu Xuefeng, chairman of Tianjin Consino Biotech Co., Ltd., frankly stated that the industrial park is blooming all over the country. However, it feels that it needs more policies, less work, and more scientific research and less industry.

Yu Dechao, president of postdoctoral researcher Xinda Biopharmaceuticals Co., Ltd. of the University of California, told reporters that there are high investment, high risks, and high returns in the biomedical field, and most of them are venture capital investments. After returning to China, companies are not profitable, and neither can obtain bank loans nor go public. It takes at least 10 years for a new drug to go from R&D to sales. Domestic venture capital favors faster profitable and more profitable circulation, which directly results in Financing Difficulties. Many small businesses are targeting the field of biological reagents or instruments that have low barriers and quick results in order to survive, giving up the development of new drugs.

In addition, the low degree of standardization makes “going out” blocked. Wang Zhengye, senior vice president of Borui Biomedical Technology (Suzhou) Co., Ltd., which has a number of patents at home and abroad, said that in order to maintain R&D, some companies must provide support for foreign companies and go out to train their industries. However, due to the lack of trust between the international market and the Chinese pharmaceutical industry, some companies in China are unable to meet the standards for CGMP (dynamic drug production management) that are only recognized in certain countries. For example, Borui can only export to India in the form of raw materials or semi-finished products. Most of the profits are earned by Indian OEM.