China Just Around the Corner

August 2, 2006
Pharmaceutical Technology, Pharmaceutical Technology-08-02-2006, Volume 30, Issue 8

Returnees and home-grown talent aim to make China a pharmaceutical powerhouse.

Like the Rest of the West, I've just visited China, to attend CPhI-China and see a little bit of the pharmaceutical industry in Shanghai.

Shanghai was a revelation. Actually, Pudong was a revelation: Pudong is to Shanghai what Pesht is to Buda or St. Paul is to Minneapolis or Brooklyn was to New York. Twenty years ago, the land was rice paddies, and folks headed across the Huang Pu River to Shanghai and said they were going into the city. Today, it is new condos, new offices, and new universities, and new technology parks.

Douglas McCormick

And new people. Many of the folks building the new pharmaceutical industry are returnees, a few of the thousands of Chinese who left the country decades ago for school, work, and opportunity in the United States, and are coming back—for the opportunity to build something new in China. They bring back with them not only an entrepreneurial spirit, but also practical experience in turning science into business. It will be extremely interesting to see what happens.

Explosive growth. The sprawling exhibition at the Shanghai New International Expo Center offered 1132 exhibitors (all but 137 of them Chinese) in four halls, and drew an estimated 19,000 visitors, up about 20% from the previous show.

Traditional Chinese Medicine (usually referred to as TCM) is fully accepted as part of the pharmaceutical industry, so at CPhI-China one saw booths boasting supercritical fluid extraction of ginkgo biloba alongside folks doing sophisticated catalytic fluorochemistry to produce novel small-molecule active pharmaceutical ingredients alongside companies that have made high-quality human growth hormone since the '90s.

Our host, Minghua Lu—publisher of the eChinaChem.com chemical industry directory and CEO of Pacific Genuity (San Carlos, CA and Shanghai, www.pacificgenuity.com)—organized a press briefing and tour. Among the data we picked up:

  • China is the world's fastest growing large economy, with annual pharmaceutical sector growth of 22%.

  • Total Chinese pharmaceutical activity, including domestic consumption and exports of both finished products and ingredients, will total about $62 billion by the end of 2006, according to China Pharmaceutical Association figures.

  • China supplies some 60 active pharmaceutical ingredients to the world market, including 70% of the world's penicillin, 50% of its aspirin, and 35% of its paracetamol (acetaminophen), generally at prices 35–65% lower than Western suppliers, exporting about $6.1 billion in pharmaceutical products and ingredients in 2005.

  • The Chinese government is tightening enforcement of good manufacturing practice standards, driving marginal producers off the market. In 1998, more than 7000 companies supplied pharmaceutical products and intermediates. By the end of 2005, that number had shrunk to a still substantial 5300, of which 3959 have been certified GMP-compliant.

On the exhibition floor, a German who is building pharmaceutical plants for Chinese companies asked me, "Can you feel the power here?"

I could.

One long afternoon. Even the flight was a revelation, and not merely because Air Canada wound up detaining my luggage in Toronto for an extra day: We came over the pole. Over Labrador, Greenland, the ice cap, Siberia, and, I think, a corner of the Gobi Desert. For half a day, I looked down on the most desolate landscapes I've ever seen, from the frozen turbulence of Greenland's glaciers to the heaving ice of the Arctic Ocean.

In a weird sort of symbolism, we made the entire flight in a single, unbroken afternoon, with the sun hanging at the same height from the horizon for the entire trip. When we arrived, I flipped open my bottom-of-the-line, two-for-the-price-of-one Verizon Wireless phone, and immediately got a dial tone. I didn't even have to reset my watch. It seemed not so much that the world was flat, or that I'd flown half way around it, but more like I'd leapt over a dreamscape to come down just around the corner.

Douglas McCormick is editor in chief of Pharmaceutical Technology, dmccormick@advanstar.com

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