Although the United States remains the world leader in biotechnology with the highest level of new drug development, a new national strategy would like to turn China into a world leader in the field, the ITIF argues
The Chinese government has devised a comprehensive national strategy to advance the innovativeness of its biotechnology industry, which it views as crucial for economic growth and national competitiveness. The plan aims to turn China into a world leader in the industry. The strategy includes subsidies; financial incentives; the initiation of national reimbursement for innovative therapies; the establishment of high-tech science parks, start-up incubators, and public-private partnerships; talent recruitment initiatives; reforms to expedite drug review, especially for domestic products; and efforts to enhance IP protection to foster innovation.
Chinese biotech companies are increasingly establishing global footprints.
This is according to a recent study by the Information Technology & Innovation Foundation (ITIF), a U.S. think tank.
China used to be considered a laggard in biotech. But with a comprehensive national strategy and extensive resources now supporting the industry, it is becoming more innovative. In fact, several indicators suggest it is narrowing the innovation gap with global leaders in the West.
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China’s biopharmaceutical industry is starting to show signs of innovation, including a surge in the volume and quality of biotech-related scientific publications, a rise in the number of novel Chinese drugs and out-licensing deals from Chinese biotech companies, and an increase in clinical trials taking place in China.
According to the National Science Foundation (NSF), value added output of China’s pharmaceuticals industry increased its global share from roughly 5.6 percent in 2002 to 24.2 percent in 2019.
But despite China's progress in biotechnology, the country still faces several challenges. Many Chinese start-ups are founded by scientists, which presents difficulties for commercialization because scientific research capacity is very different from commercial processing capacity.
These are the key points of the study:
Recent Chinese government policies have emphasized domestic biotech innovation. A new national strategy has been crucial to the sector’s growth;
Several factors are spurring growth, including subsidies, financial incentives, science parks, start-up incubators, talent recruitment schemes, public-private partnerships, and reforms to expedite drug review and enhance IP protection;
Indicators suggest Chinese biotech is becoming more innovative. For example, the U.S. FDA approved three new Chinese drugs in 2023;
China’s out-licensing deals grew from 15 in 2019 to 33 in 2023, with the largest increase being in oncology. These deals consisted of a range of therapeutic modalities, involving both small molecule and biologics;
Clinical trial activity in China more than doubled from 2,979 trials in 2017 to 6,497 trials in 2021. In oncology, Chinese trials grew 146 percent from 1,040 in 2017 to 2,564 in 2021, the highest for any country;
China still lags behind in its ability to turn science into products. America remains ahead, leveraging its sophisticated ecosystem of national funding sources, VC start-up funding, pharma R&D investment, robust IP, and strong commercialization ability;
China increased its global share of value-added pharmaceuticals output from roughly 5.6 percent in 2002 to 24.2 percent in 2019.
China views biotech as a key emerging industry critical to the country’s global competitiveness, and has developed a national biotechnology strategy to bolster its industry’s innovation capabilities.
According to a McKinsey Biocentury report, China has seen the recent emergence of four leading biotechnology clusters: the Bohai Rim Cluster, located in Beijing, Tianjin, and Jianin; the Yangtze River Cluster, located in Shanghai, Suzhou, and Hangzhou; the Mid-West Cluster, in Wuhan and Chengdu; and the South China Cluster, located in Shenzhen, Guangzhou, and Xiamen. Over 8,500 biotech and biopharma companies are found in these leading biohubs.
The U.S. Role
The United States remains the world leader in biotechnology, with the highest level of new drug development in the world.
The United States owes its biotechnology leadership to several factors, including strong research universities and institutions such as the National Institutes of Health (NIH) and the Advanced Research Projects Agency for Health (ARPA-H) that fund basic research; supportive science policies such as the Orphan Drug Act of 1983 and the Prescription Drug User Fee Act (PDUFA) of 1992 that aim to incentivize innovation; a robust IP protection regime, including strong patent rights and enforcement that encourage innovation; and the existence of supportive innovation clusters of collocated universities, companies, and incubators. These clusters facilitate knowledge and resource sharing, playing a critical role in transforming scientific ideas from the laboratory into commercial products such as novel therapeutics.
The United States has a sophisticated biopharmaceutical ecosystem, not only for life sciences research and development, but also for commercialization of biotechnology and bioengineering innovations and strong intellectual property protection. "
For China to become a world leader in biotechnology, it will be critical to create comprehensive ecosystems, including stronger protection of intellectual property rights, ethical use of technologies such as gene editing, and technology transfer from research to industry to improve commercialization capabilities.
What is biotechnology?
Biotechnology can help advance human health in different ways. It can support precision medicine by tailoring therapeutics to individual patients, making them more effective and reducing side effects. Methods such as genetic sequencing and molecular diagnostics help identify specific genetic mutations associated with disease to determine the most suitable therapies based on individuals’ unique genetic profiles.
The biotech industry also enables the production of biologics, drugs derived from living organisms or their components, such as therapeutic proteins, monoclonal antibodies, and vaccines. Biologics provide targeted treatments for serious diseases such as cancer and autoimmune disorders, inflammation-related conditions, hemophilia, and diabetes, among others.
Biotech also has applications in gene therapies. Gene editing technologies such as CRISPR-Cas9 enable scientists to modify cells’ DNA, which could help treat genetic disorders by correcting disease-causing gene mutations. These examples illustrate the range of applications of biotech in healthcare, and the ways in which its outputs are critical to improving human lives.
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