Nothing To See Here! Just Big Pharma Investments In China
By Louis Garguilo, Chief Editor, Outsourced Pharma
As the U.S. government, the Biotechnology Innovation Organization (BIO), and others warn off the outsourcing to China-based WuXi AppTec (and other China-based service providers by extension), let’s take a random walk through activities running in parallel, but from which eyes seem to be consciously averted.
- AbbVie signs an agreement potential up to $2 billion with I-Mab Biopharma of China, for global collaboration development and commercialization of lemzoparlimab (TJC4), discovered/developed by I-Mab. The partners have the potential to expand the collaboration to additional therapies.
- Eli Llly over the years has actively invested/formed partnerships with Chinese biotech companies via deals estimated in total of ~$1 billion. Lilly continues to expand R&D investments in China to accelerate local pharmaceutical innovations and benefit patients, according to Ben Basil, president and general manager of Lilly China.
- In 2018, Lilly initiated the Lilly China Innovation and Collaboration program to tap into local talent and leverage its resources for drug development.
- Novo Nordisk announces a $556 million investment to increase manufacturing capacity in China; the project is expected to be complete by 2027. “It will further enhance production capacity in China and meet the needs of Chinese patients for innovative drugs,” Novo says. This investment follows a ~$164 million manufacturing expansion.
- How important is China to Novo? see here.
- Novartis announces an $85 million investment to build a new radiotherapy production plant in Haiyan, China – happily reported by the regional government there, it will be operational in 2026. This adds to an existing large oral-drug facility in Beijing.
- Pfizer agrees to a $480 million deal for a 9.9% stake with CStone Pharmaceuticals (a Chinese biopharmaceutical company).
Should we assume the U.S. Congress, BIO and others see no risk of IP transfer to the China Communist Party (CCP) in any of these (and similar) deals, as they now seem to when working with a China-based CDMO?
No concerns here regarding focusing biotech knowhow/jobs in China instead of investing/reshoring in the U.S. or Europe?
Nothing to see here?
At the least, something to consider:
- WuXi AppTec assists U.S.-based biotechs to develop and supply drugs and therapies to U.S. patients.
- Examples above demonstrate Western-based Pharma serves the development of the China industry, the China Communist Party (CCP) by extension, and patients there.
So which is under assault?
Double (Standard) Take
I cast no direct aspersions on any actions of Big Pharma in China.
What is raised here are concerns with the calling out of a currently well-respected and utilized CDMO – without details/proof or due process, and not applying a standard of inquiry across the industry.
Readers might ask, then, if I have been consistent during this long-simmering China vs. U.S. biopharma battle.
I’ll reply yes and no. That should be reassuring.
As editor of OutsourcedPharma.com, my concern with China intensified during the Trump White House reign, when bio/pharma supremacy, supply chains, and outsourcing/onshoring became a national topic. I wrote editorials such as:
President Trump, Communist China, and Pharma Outsourcing
Sign It, President Trump; Don’t Go There, President Xi
Drug Tariffing: How Trade Policy And Politics Manipulate Your Outsourcing
I won’t make you read those. In short, they are (fair but) critical of CCP diktats aimed at industrial coercion, and trade policies forcing foreign companies into Faustian bargains of info-transfer and company ownership for access to its markets.
I hope readers will also agree to my being a balanced proponent of reshoring biopharma capabilities to the U.S., and securing national drug supply chains.
And I experientially understand what U.S.-based CDMOs face when competing with China.
But current events should have us questioning the means to our ends, and the effectiveness of our actions.
Ostensibly, the targeting of China-based CDMOs is to save us from IP landing in the arms of the CCP. The other purpose is to benefit the U.S. biopharma industry, and CDMOs in the U.S.
At the same time, Big Bio and Big Pharma investments in China directly benefit that country and are readily applauded – not least of which by investors.
Follow The Science Facts
Clarity here is essential.
If anyone believes my concerns are overblown because, for example, Congress is limiting legislation at one or two China-based service providers, please see this letter from the Chairman of the Select Committee on the Chinese Communist Party, to the Secretary of the U.S. Department of Defense.
The list of targets will continue to grow.
If indeed any China-based CDMO has or is transferring trade or other IP from any of its customers to the CCP, then actions are absolutely warranted.
Let’s have that substantiated publicly. Now.
Because public accusation without details and some semblance of due process that an organization in any country is transferring a customer’s IP or knowhow to an unauthorized third party, is a damning accusation.
It can severely cripple a CDMO.
And should there actually be solid proof of malfeasance, further government action would not be necessary. It will be swift market reaction that sorts this out.
Back to the beginning of this editorial, those Big Pharma investments, and working and partnering with China and China-based companies, is today an accepted business practice in pursuit of the China healthcare and patient markets.
Could Pharma take a more principled stance? Perhaps.
The reality is Pharma abides by the rules and regulations for drug development, manufacturing, and selling in China, established by the Chinese Communist Party, and its plans for industry supremacy.
Nothing to worry about, I guess.
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Up Next: Chief Editor Louis Garguilo sits down with Richard Connell, U.S. COO, WuXi Apptec.
Earlier editorials:
Is WuXi AppTec An Enemy Of The State?
BIO Expels WuXi, Agrees With U.S. Government
From Ally To Adversary: BIO's Swift Rebuke Of WuXi