"Now, many pharmaceutical companies in the United States have begun to consider outsourcing business in China, because China's market environment is getting better and better." April 17th, Beijing Oriental Bit Technology Co., Ltd. (Health Network) and the United States Agno Pharmaceutical Co., Ltd. Held the Fourth China Pharmaceutical International Forum and Global Pharmaceutical Outsourcing Conference. Dr. Simon Sellers, CEO of Bioavailability Systems LLC in the United States, provided exciting news to the Chinese pharmaceutical industry. In fact, around the outsourcing business of multinational companies, not only the R&D outsourcing and production outsourcing that China's enterprises are already engaged in, but also a raw material drug company in China that has not been widely considered: the supply of raw materials in the clinical period.
New Business Opportunities in Outsourcing Markets In recent years, many multinational companies are facing drug patent expiration and follow-up product scarcity. The ever-increasing cost of drug development has made transnational corporations more and more inclined to outsource pharmaceutical production and R&D to developing countries with cost advantages. As a result, a pharmaceutical outsourcing market including R&D and production has gradually emerged on a global scale. .
For example, Pfizer Inc., the world's largest pharmaceutical company, has been adjusting its global layout through restructuring during the past three years. It is reported that by the end of this year, Pfizer will shut down or sell 45 of its 93 global factories, and its outsourcing business will increase from 10% three years ago to 17%. It is estimated that by 2010, the proportion of Pfizer's outsourcing business will increase to 30%.
Pfizer's business trajectory is a microcosm of the development of the global pharmaceutical market. With the slowing down of research and development speed of global new drugs and rising costs, the pharmaceutical industry chain is forming a strong outsourcing impulse. According to statistics, at present, the global pharmaceutical outsourcing business is increasing at an annual rate of 30%. It is estimated that by 2010, the market capacity of only contracted R&D outsourcing (CRO) will exceed US$30 billion.
For the Chinese pharmaceutical industry, actively conducting international certifications and undertaking foreign production orders and R&D orders have become the consensus of many companies, and some companies have achieved good results. However, for outsourced drug outsourcing in the clinical period, most Chinese companies are still unfamiliar.
So, what is the raw material drug in the clinical period?
It is understood that according to the different stages of development of the drug life cycle, the outsourcing business is generally divided into three types: outsourcing of pharmaceutical intermediates, pharmaceutical raw materials and pharmaceutical preparations.
According to Dr.James J.Chen, president of Agno Pharmaceuticals in the United States, the drug substance during the clinical period is simply a drug substance used in the clinical period. Dr.James J.Chen provides a clear picture of the phase time and dosage of drug substances in the clinical phase: preclinical trials generally take 18 months, when the amount of raw material drug is very small, in grams; clinical trials Phase 3 (phase 3), with an average time of 5 years, the demand for raw material drugs is gradually increasing, in kilograms, which is generally 50 to 100 kg; the third phase is the phase of patented commercialized drug substances, and the quantity requirement for APIs is rapidly increasing. From 50 kg to 100 tons, the entire process needs 100 million U.S. dollars, and the profit rate of raw material drugs is more than 50%. The high capacity and low value of raw material drugs and pharmaceutical intermediates and non-proprietary pharmaceutical raw materials in the clinical stage have become clear. Compared.
The high profitability of bulk drugs during the clinical period largely derives from the desire of pharmaceutical companies for new drugs.
According to Dr. Kerry Spear, executive director of the American Sepracor Corporation, the global pharmaceutical market last year had a total capacity of more than US$700 billion, a growth rate of 4.6%, but the growth was mainly driven by developing countries. Last year, the U.S. pharmaceutical manufacturing revenue was US$286.5 billion, a growth rate of only 3.8%, which is the lowest growth year since 1961. The reasons for this trend are manifold: Last year, the US$17 billion brand drug market lost its exclusivity due to the expiration of patents, while new drug sales were only US$400 million; at the same time, sales of drugs were reduced due to drug safety issues. The income is reduced by about 10%. From 2006 to 2011, 29 "bomb bomb" drug patents worldwide have expired, but in recent years, the number of new drugs has substantially decreased.
Dr. Kerry Spear used the “R&D cadre†to describe the difficulties faced by US pharmaceutical companies in recent years. In 2007, the research and development expenses of the pharmaceutical industry in the United States reached US$4.3 billion, but there were only 14 new molecular entity drugs studied, which is the same as the number of new drugs produced in R&D costs of US$3.2 billion in 1983. At present, the cost of research and development for a new drug has reached 1.2 billion U.S. dollars, and the time has been extended to 15 years.
"It is precisely because of the continuous rise in research and development costs of new drugs and the depletion of research and development capabilities that have formed a pharmaceutical outsourcing market. The pharmaceutical outsourcing discussed here is different from commissioned processing, which includes CRO (Contractual R&D Outsourcing) and CMO (Contractual Contracting). Among them, the rapid development of CRO has brought about changes in the downstream production areas,†said Wu Huifang, general manager of Beijing Dongfang Bit Technology Co., Ltd.
China has the conditions to enter the high-end market. It is understood that at present, the production of APIs in the global clinical period is mainly concentrated in North America, the European Union and India. The production of patented commercial APIs is mainly concentrated in North America, EU, Puerto Rico, and Singapore. The APIs in China are also Only stay in the field of non-patent drug substances. In this regard, Dr.Kerry Spear said that the main concern of European and American companies to China was the environment of intellectual property protection. Now, China's market environment is becoming more and more standardized, and Chinese raw material medicines also have the conditions to enter the high-end field. Dr.James J.Chen also believes that China has been manufacturing pharmaceutical intermediates for 20 years, and it has also been manufacturing non-proprietary APIs for 10 years, and pharmaceutical chemistry has also had 5 years of experience. China now has Ability and technology to produce clinical drug substance. He said that this is not only what the Chinese pharmaceutical industry is going to do now, but also what it is still doing in the coming years.
According to reports, the outsourcing business in the world is now dominated by small companies. The reason is that in the past 15 years, almost all new discoveries and new inventions in the pharmaceutical industry have come from academia and biotechnology companies, not from companies in the industry. Discoveries and inventions. According to statistics, about 50% of new chemical entities (NCE) in the world are discovered by small R&D companies. In the world, there are more and more small-scale R&D companies engaged in the early development of drugs. These small R&D companies are forced to outsource business due to practical pressures such as cost pressures and shortened R&D cycles.
Since 1996, some large foreign CRO agencies have been stationed in China. Quintiles, which ranks first in the field of global pharmaceutical clinical research, has set up branch offices in Beijing; the second largest CRO company in the world, Corvins, last year In August, a central laboratory was established in Shanghai Zhangjiang Medicine Valley. Dr.Kerry Spear said that in the face of increasingly difficult drug research and development, European and American pharmaceutical companies pay more attention to their own core strengths and pay attention to cost control. They hope to make R&D faster and more flexible through outsourcing business. He believes that China's current R&D costs, especially at the clinical research stage, are relatively low-cost. At the same time, it has a large number of talents who have received professional education in Europe and the United States, and intellectual property protection is also becoming more and more standardized. These have created great appeal for European and American companies.
At the same time, China's domestic pharmaceutical R&D outsourcing service companies have mushroomed in recent years. There are currently more than 100 companies specializing in such services.
The rapid development of R&D outsourcing services will undoubtedly increase the market demand for APIs during the clinical period.
CHL Pharmaceuticals UK is a company responsible for global procurement, and outsourcing is also part of their business. According to Zhu Yushu, director of purchasing and sales of the company and a member of the British Marketing Association, during the preclinical period, outsourcing companies valued cost and R&D speeds, and product quality was not very important during this period. When R&D enters the second phase, the clinical trial phase, the outsourcing company will pay great attention to the speed of supplier's R&D, especially the choice of path. At the same time, suppliers may be required to place their products under cGMP conditions, but since more target compounds will be selected at this stage, outsourcing companies will generally accept higher product cost estimates from suppliers. Bills. By the third stage, the stage of patent commercialization, the outsourcing company will put very strict product quality requirements to suppliers because they will face the supervision of drug administration themselves. "Overall, in the clinical period, the production of APIs is moderately regulated, and the United States does not require API manufacturers to pass FDA certification during the clinical period."
Chifeng Ai Ke Pharmaceutical Technology Co., Ltd. is an earlier domestic company involved in the clinical period of raw material drugs, its deputy general manager Li Xiaoguang said that the clinical outsourcing market is indeed very large, Ai Ke Pharmaceutical can receive 1 to 2 orders a year, this Orders are very tight to the production time, usually within one month after the order is received, but the production technology is not too complicated and the profit rate is high.
According to Dr.James J.Chen, the outsourcing companies' requirements for API suppliers in the clinical period mainly include the following aspects: they have the proof to deliver quality products in a timely manner; they hope that the management team will have technical personnel with European and European backgrounds; and they have excellent R&D capabilities and advanced equipment; rigorous intellectual property protection procedures; preferably with FDA-approved equipment.
According to Zhu Yushu, according to Zhu Yushu, the requirements of the outsourcing company for the appropriate suppliers at different stages will also be different depending on the company and the type. However, the following aspects are usually the main considerations of the outsourcing company. First, the scale of production . From the scale of the laboratory's production to the scale of small-scale production, to the scale of commercial production across the board, they will select suppliers with corresponding production advantages at different times. Second, the level of chemical expertise. Third, the factory GMP level and production hardware level, such as the safety of the process flow. Fourth, analyze the level of chemical expertise, such as the improvement and innovation of analytical methods, the ability of daily analysis work. Zhu Yushu said that large outsourcing companies do not always choose large manufacturers as their suppliers. They mainly choose the suppliers that they believe are most suitable under the current conditions based on actual needs. Therefore, as long as domestic small and medium-sized manufacturing companies can carefully understand the outsourcing details and processes of European and American companies, identify key links, and approach customers at the right time, they can get some outsourcing orders from world-renowned pharmaceutical companies.
Far-reaching significance for the extension of the industrial chain In fact, outsourcing to the Chinese pharmaceutical industry is not just a $30 billion market, but more importantly, it can accelerate the internationalization of the Chinese pharmaceutical industry by undertaking outsourcing orders. The outsourcing of APIs during the clinical period also provided opportunities for Chinese APIs to participate in the development of high-end value chains for new drugs. Wu Huifang said that if a company passes international relevant certifications and produces drug substances for clinical applications for multinational companies, it may be a matter of a few years later that the company will become a supplier of patented pharmaceutical raw materials for multinational companies, with market exclusivity compared to a few years ago. The characteristic raw material medicine developed in our country is more practical.
Before and after 2004, China's coastal raw material pharmaceutical enterprises represented by Hisun Pharmaceutical and Huahai Pharmaceutical had taken a different path and taken the path of characteristic APIs, that is, before the patent protection of patented drugs expired, R&D could be used for the production of the patented pharmaceuticals. The drug substance, once the patent expires, can quickly become a generic drug supplier for such drugs. However, because large numbers of production companies entered the same field after the expiration of the patent, the profits of such generic drug raw materials fell rapidly. Therefore, companies are required to continue product excavation. It is reported that the representative of the raw material medicine Hisun Pharmaceutical has encountered bottlenecks in development.
However, the development prospects of characteristic APIs and clinical APIs are not the same. "If a company wants to become the only supplier of proprietary drugs, it must pass international certification, and it must have enough patience to wait for the new drug to go public. This waiting time may be several years, maybe more than ten years, and perhaps never wait for anything. - Because not every clinical new drug can eventually be industrialized," said Li Xiaoguang.
New Business Opportunities in Outsourcing Markets In recent years, many multinational companies are facing drug patent expiration and follow-up product scarcity. The ever-increasing cost of drug development has made transnational corporations more and more inclined to outsource pharmaceutical production and R&D to developing countries with cost advantages. As a result, a pharmaceutical outsourcing market including R&D and production has gradually emerged on a global scale. .
For example, Pfizer Inc., the world's largest pharmaceutical company, has been adjusting its global layout through restructuring during the past three years. It is reported that by the end of this year, Pfizer will shut down or sell 45 of its 93 global factories, and its outsourcing business will increase from 10% three years ago to 17%. It is estimated that by 2010, the proportion of Pfizer's outsourcing business will increase to 30%.
Pfizer's business trajectory is a microcosm of the development of the global pharmaceutical market. With the slowing down of research and development speed of global new drugs and rising costs, the pharmaceutical industry chain is forming a strong outsourcing impulse. According to statistics, at present, the global pharmaceutical outsourcing business is increasing at an annual rate of 30%. It is estimated that by 2010, the market capacity of only contracted R&D outsourcing (CRO) will exceed US$30 billion.
For the Chinese pharmaceutical industry, actively conducting international certifications and undertaking foreign production orders and R&D orders have become the consensus of many companies, and some companies have achieved good results. However, for outsourced drug outsourcing in the clinical period, most Chinese companies are still unfamiliar.
So, what is the raw material drug in the clinical period?
It is understood that according to the different stages of development of the drug life cycle, the outsourcing business is generally divided into three types: outsourcing of pharmaceutical intermediates, pharmaceutical raw materials and pharmaceutical preparations.
According to Dr.James J.Chen, president of Agno Pharmaceuticals in the United States, the drug substance during the clinical period is simply a drug substance used in the clinical period. Dr.James J.Chen provides a clear picture of the phase time and dosage of drug substances in the clinical phase: preclinical trials generally take 18 months, when the amount of raw material drug is very small, in grams; clinical trials Phase 3 (phase 3), with an average time of 5 years, the demand for raw material drugs is gradually increasing, in kilograms, which is generally 50 to 100 kg; the third phase is the phase of patented commercialized drug substances, and the quantity requirement for APIs is rapidly increasing. From 50 kg to 100 tons, the entire process needs 100 million U.S. dollars, and the profit rate of raw material drugs is more than 50%. The high capacity and low value of raw material drugs and pharmaceutical intermediates and non-proprietary pharmaceutical raw materials in the clinical stage have become clear. Compared.
The high profitability of bulk drugs during the clinical period largely derives from the desire of pharmaceutical companies for new drugs.
According to Dr. Kerry Spear, executive director of the American Sepracor Corporation, the global pharmaceutical market last year had a total capacity of more than US$700 billion, a growth rate of 4.6%, but the growth was mainly driven by developing countries. Last year, the U.S. pharmaceutical manufacturing revenue was US$286.5 billion, a growth rate of only 3.8%, which is the lowest growth year since 1961. The reasons for this trend are manifold: Last year, the US$17 billion brand drug market lost its exclusivity due to the expiration of patents, while new drug sales were only US$400 million; at the same time, sales of drugs were reduced due to drug safety issues. The income is reduced by about 10%. From 2006 to 2011, 29 "bomb bomb" drug patents worldwide have expired, but in recent years, the number of new drugs has substantially decreased.
Dr. Kerry Spear used the “R&D cadre†to describe the difficulties faced by US pharmaceutical companies in recent years. In 2007, the research and development expenses of the pharmaceutical industry in the United States reached US$4.3 billion, but there were only 14 new molecular entity drugs studied, which is the same as the number of new drugs produced in R&D costs of US$3.2 billion in 1983. At present, the cost of research and development for a new drug has reached 1.2 billion U.S. dollars, and the time has been extended to 15 years.
"It is precisely because of the continuous rise in research and development costs of new drugs and the depletion of research and development capabilities that have formed a pharmaceutical outsourcing market. The pharmaceutical outsourcing discussed here is different from commissioned processing, which includes CRO (Contractual R&D Outsourcing) and CMO (Contractual Contracting). Among them, the rapid development of CRO has brought about changes in the downstream production areas,†said Wu Huifang, general manager of Beijing Dongfang Bit Technology Co., Ltd.
China has the conditions to enter the high-end market. It is understood that at present, the production of APIs in the global clinical period is mainly concentrated in North America, the European Union and India. The production of patented commercial APIs is mainly concentrated in North America, EU, Puerto Rico, and Singapore. The APIs in China are also Only stay in the field of non-patent drug substances. In this regard, Dr.Kerry Spear said that the main concern of European and American companies to China was the environment of intellectual property protection. Now, China's market environment is becoming more and more standardized, and Chinese raw material medicines also have the conditions to enter the high-end field. Dr.James J.Chen also believes that China has been manufacturing pharmaceutical intermediates for 20 years, and it has also been manufacturing non-proprietary APIs for 10 years, and pharmaceutical chemistry has also had 5 years of experience. China now has Ability and technology to produce clinical drug substance. He said that this is not only what the Chinese pharmaceutical industry is going to do now, but also what it is still doing in the coming years.
According to reports, the outsourcing business in the world is now dominated by small companies. The reason is that in the past 15 years, almost all new discoveries and new inventions in the pharmaceutical industry have come from academia and biotechnology companies, not from companies in the industry. Discoveries and inventions. According to statistics, about 50% of new chemical entities (NCE) in the world are discovered by small R&D companies. In the world, there are more and more small-scale R&D companies engaged in the early development of drugs. These small R&D companies are forced to outsource business due to practical pressures such as cost pressures and shortened R&D cycles.
Since 1996, some large foreign CRO agencies have been stationed in China. Quintiles, which ranks first in the field of global pharmaceutical clinical research, has set up branch offices in Beijing; the second largest CRO company in the world, Corvins, last year In August, a central laboratory was established in Shanghai Zhangjiang Medicine Valley. Dr.Kerry Spear said that in the face of increasingly difficult drug research and development, European and American pharmaceutical companies pay more attention to their own core strengths and pay attention to cost control. They hope to make R&D faster and more flexible through outsourcing business. He believes that China's current R&D costs, especially at the clinical research stage, are relatively low-cost. At the same time, it has a large number of talents who have received professional education in Europe and the United States, and intellectual property protection is also becoming more and more standardized. These have created great appeal for European and American companies.
At the same time, China's domestic pharmaceutical R&D outsourcing service companies have mushroomed in recent years. There are currently more than 100 companies specializing in such services.
The rapid development of R&D outsourcing services will undoubtedly increase the market demand for APIs during the clinical period.
CHL Pharmaceuticals UK is a company responsible for global procurement, and outsourcing is also part of their business. According to Zhu Yushu, director of purchasing and sales of the company and a member of the British Marketing Association, during the preclinical period, outsourcing companies valued cost and R&D speeds, and product quality was not very important during this period. When R&D enters the second phase, the clinical trial phase, the outsourcing company will pay great attention to the speed of supplier's R&D, especially the choice of path. At the same time, suppliers may be required to place their products under cGMP conditions, but since more target compounds will be selected at this stage, outsourcing companies will generally accept higher product cost estimates from suppliers. Bills. By the third stage, the stage of patent commercialization, the outsourcing company will put very strict product quality requirements to suppliers because they will face the supervision of drug administration themselves. "Overall, in the clinical period, the production of APIs is moderately regulated, and the United States does not require API manufacturers to pass FDA certification during the clinical period."
Chifeng Ai Ke Pharmaceutical Technology Co., Ltd. is an earlier domestic company involved in the clinical period of raw material drugs, its deputy general manager Li Xiaoguang said that the clinical outsourcing market is indeed very large, Ai Ke Pharmaceutical can receive 1 to 2 orders a year, this Orders are very tight to the production time, usually within one month after the order is received, but the production technology is not too complicated and the profit rate is high.
According to Dr.James J.Chen, the outsourcing companies' requirements for API suppliers in the clinical period mainly include the following aspects: they have the proof to deliver quality products in a timely manner; they hope that the management team will have technical personnel with European and European backgrounds; and they have excellent R&D capabilities and advanced equipment; rigorous intellectual property protection procedures; preferably with FDA-approved equipment.
According to Zhu Yushu, according to Zhu Yushu, the requirements of the outsourcing company for the appropriate suppliers at different stages will also be different depending on the company and the type. However, the following aspects are usually the main considerations of the outsourcing company. First, the scale of production . From the scale of the laboratory's production to the scale of small-scale production, to the scale of commercial production across the board, they will select suppliers with corresponding production advantages at different times. Second, the level of chemical expertise. Third, the factory GMP level and production hardware level, such as the safety of the process flow. Fourth, analyze the level of chemical expertise, such as the improvement and innovation of analytical methods, the ability of daily analysis work. Zhu Yushu said that large outsourcing companies do not always choose large manufacturers as their suppliers. They mainly choose the suppliers that they believe are most suitable under the current conditions based on actual needs. Therefore, as long as domestic small and medium-sized manufacturing companies can carefully understand the outsourcing details and processes of European and American companies, identify key links, and approach customers at the right time, they can get some outsourcing orders from world-renowned pharmaceutical companies.
Far-reaching significance for the extension of the industrial chain In fact, outsourcing to the Chinese pharmaceutical industry is not just a $30 billion market, but more importantly, it can accelerate the internationalization of the Chinese pharmaceutical industry by undertaking outsourcing orders. The outsourcing of APIs during the clinical period also provided opportunities for Chinese APIs to participate in the development of high-end value chains for new drugs. Wu Huifang said that if a company passes international relevant certifications and produces drug substances for clinical applications for multinational companies, it may be a matter of a few years later that the company will become a supplier of patented pharmaceutical raw materials for multinational companies, with market exclusivity compared to a few years ago. The characteristic raw material medicine developed in our country is more practical.
Before and after 2004, China's coastal raw material pharmaceutical enterprises represented by Hisun Pharmaceutical and Huahai Pharmaceutical had taken a different path and taken the path of characteristic APIs, that is, before the patent protection of patented drugs expired, R&D could be used for the production of the patented pharmaceuticals. The drug substance, once the patent expires, can quickly become a generic drug supplier for such drugs. However, because large numbers of production companies entered the same field after the expiration of the patent, the profits of such generic drug raw materials fell rapidly. Therefore, companies are required to continue product excavation. It is reported that the representative of the raw material medicine Hisun Pharmaceutical has encountered bottlenecks in development.
However, the development prospects of characteristic APIs and clinical APIs are not the same. "If a company wants to become the only supplier of proprietary drugs, it must pass international certification, and it must have enough patience to wait for the new drug to go public. This waiting time may be several years, maybe more than ten years, and perhaps never wait for anything. - Because not every clinical new drug can eventually be industrialized," said Li Xiaoguang.