Chinese pharmaceutical companies need to strengthen their research and development capacity before they can reach the standard of their overseas counterparts, industry officials said.

According to a report by David E. Webber, a senior official with the International Federation of Pharmaceutical Manufacturers Associations, an influential global industry association, China is the most promising emerging market to develop an R&D-based pharmaceutical industry.

At present, most domestic drugmakers try to eke out a profit from manufacturing generic drugs. They are weak in R&D and don't have enough funding for research work to make innovative medicine, even if they have such ambitions.

"It generally takes 15 years to introduce a new drug," said Feng Danlong, a senior official with Pfizer Pharmaceuticals' China branch. "However, Chinese firms don't spend enough time and money on research."

At present, there are around 6,800 drugmakers in the country and only a handful of them are committed to R&D.

In the United States, about 20 percent of a drug company's sales revenue goes to R&D, according to Feng. In China, the figure, on average, is a paltry 2 percent.

The long period of research on chemicals in laboratories and the huge amount of investment have dampened the enthusiasm of some drugmakers.

To introduce a new drug on the market, five years of laboratory testing is required while another 10 years is needed to finish the three-phase clinical trials in hospitals.

However, a newly invented drug does not necessarily translate into profit. Only about one-third of new drugs bring returns to drugmakers, according to Li Zhengda, senior director in charge of public affairs of Wyeth-Ayerst (China).

Some Chinese domestic drugmakers were focusing on their existing strengths, such as the bio-pharmaceutical sector, as a means to building into an R&D-based pharmaceutical country.

Shanghai has committed to set up a bio-pharmaceutical valley. The city is to invest more than 70 million yuan (US$8.4 million) annually over the next two years at least, to support the development of the State-Shanghai Bio-pharmaceutical Industrial Base. The "drug valley" is located in the Zhangjiang High-Tech Park in Pudong New Area. As of 2002, the base had attracted 120 start-up biopharm companies .

Liu Zhenxian, president of Beijing Novartis Pharma, Novartis' main China joint venture, said it was very hard for domestic drugmakers to invent new drugs on their own. For them, the first step is to find ways to enhance their capabilities to effectively mimic patented drugs invented by their overseas counterparts and then make innovations later.

China's drugmakers need to team up with their multinational counterparts as a way to strengthen their R&D business, industry officials added.

(eastday.com September 25, 2003)