Chinese prospects for drug discovery outsourcing look good
Market will grow at a CAGR of 23% to 2016, says Frost & Sullivan
Although prospects look good for the drug discovery outsourcing market in China, a lack of data security and intellectual property protection is alarming many international pharmaceutical companies, according to a study by Frost & Sullivan.
In its report, Drug Discovery Outsourcing Market in China, the researcher finds that advances in genomics, combinatorial chemistry and high-throughput screening have led to China emerging as a major location for drug discovery. The region also has the advantages of scientific expertise and a comprehensive infrastructure.
Apart from India, China is also regarded as being able to help pharmaceutical companies improve drug discovery at a reasonable cost.
The drug discovery outsourcing market in China was worth US$315m in 2009 and will grow at a compound annual growth rate (CAGR) of 23% to 2016, the report predicts.
‘Expired patents and the rise in diseases are expected to fuel the growth of the Chinese drug discovery market,’ says Frost & Sullivan research analyst Amritpall Singh.
‘China offers a large talent pool in the field of pharmaceutical research and development, including an increasing number of western-educated graduates or researchers having international working experience.’
The Chinese government has been providing strong incentives to grow its domestic pharmaceutical and biopharmaceutical industries by offering tax relief, funds and by building numerous technology/biotechnology parks, particularly in Shanghai.
But with economic reforms and forecasted inflation, labour and raw material costs are expected to increase in the near future, the report says. Companies will therefore start seeking alternative locations that can offer more cost-effective options.
Although the Chinese government is stepping up efforts to address IP issues, Frost & Sullivan says it is likely to take time to resolve them.
