Cost Benefits and Considerable Scientific Expertise Provide China Strategic Advantage

With fast-paced advancements in genomics, combinatorial chemistry, and high-throughput screening, China has emerged as a major location to which drug discovery is being outsourced. China has the advantages of scientific expertise and comprehensive infrastructure, which are critical for drug discovery activities.

Apart from India, China is also regarded as a lucrative market able to help pharmaceutical companies to improve drug discovery at a reasonable cost. The rise of overhead costs in the United States and European countries has led companies to opt for outsourcing of drug discovery to low-cost countries, such as India and China.

New analysis from Frost & Sullivan, Drug Discovery Outsourcing Market in China, finds that the market reached $315.0 million in 2009 and is expected to grow at a compound annual growth rate (CAGR) of 23.0 percent from 2009 to 2016.

"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 nurture the domestic pharmaceutical and biopharmaceutical industries. The R&D sector in China has largely benefited from these initiatives, which include tax relief, direct funding opportunities, and development of numerous technology/biotechnology parks, especially in Shanghai.

Although the prospects for the market look upbeat, there are some challenges clouding its landscape. With economic reforms and the expected inflation in China, labor and raw material cost is increasing. The impact is not likely to be felt immediately. However, in the near future, cost is bound to witness a hike. Companies are expected to be scouting around for alternative locations that can offer more cost-effective options.

Apart from this, data security and intellectual property (IP) protection in China have caused some angst for large international pharmaceutical and biotechnology companies. The Government is stepping up efforts to address IP issues; however, it is likely to take a while before these problems are ironed out.

Pharmaceutical companies have displayed a preference for a single outsourcing company instead of multiple providers for a project. This helps eliminate dealings with numerous outsourcing companies and enables optimal leverage of the knowledge obtained during the early stages of R&D process within the same organization.

As the environment encourages companies to conduct vigorous R&D in this space, they must strive to move up the value chain and attain global standards at par with large western pharmaceutical companies. "Multinational companies as well as local sponsors perceive overall service quality as the uppermost priority in the selection of an outsourcing partner," says Singh. "In addition, factors such as price, ability to recruit trial participants, speed of project turnaround, as well as reputation of the drug discovery firm are also the major decisive factors."

Companies that have capitalized on the available resources for drug discovery are also keen to broaden their business horizons and build up sales in the Chinese market. Thus, new opportunities are unfolding for the development of drugs especially relevant for the Chinese market.

If you are interested in more information on Frost & Sullivan's latest research on the Drug Discovery Outsourcing Market in China, please send an e-mail to Katja Feick, Corporate Communications, at This email address is being protected from spambots. You need JavaScript enabled to view it., with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

Drug Discovery Outsourcing Market in China is part of the Pharmaceuticals & Biotechnology Growth Partnership Services program, which also includes research in the following markets: CEO 360 Degree Perspective: Global Drug Discovery Technologies and Overview of the European Drug Discovery Market All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

Most Popular Now

Pfizer's elranatamab granted FDA Breakthrough Ther…

Pfizer Inc. (NYSE:PFE) announced its investigational cancer immunotherapy, elranatamab, received Breakthrough Therapy Designation from the U.S. Food and Drug Administrati...

Vividion Therapeutics names Jenna Goldberg as Chie…

Vividion Therapeutics, Inc., a biopharmaceutical company utilizing novel discovery technologies to unlock high value, traditionally undruggable targets with precision the...

Bayer with continued strong performance

The Bayer Group maintained its strong business performance across all three divisions in the third quarter. "Despite rising inflation and global supply chain problems, we...

Pfizer and BioNTech receive positive CHMP opinion …

Pfizer Inc. (NYSE: PFE) and BioNTech SE (Nasdaq: BNTX) announced a booster dose of their Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine (COMIRNATY® Original/Omicron ...

Sanofi and GSK's next-generation COVID-19 booster …

After the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for VidPrevtyn® Beta, the vaccine was approved by t...

Sugar molecules as a target in cancer therapy

Cancer cells use sugar molecules on their surface to disable attacks by the body's immune system. Researchers at the University of Basel now report on how this mechanism ...

COVID vaccination improves effectiveness of cancer…

Patients with nasopharyngeal cancer are often treated with drugs that activate their immune system against the tumor. Until now, it was feared that vaccination against Co...

Making melanoma immortal: Pitt scientists discover…

Scientists at the University of Pittsburgh School of Medicine have discovered the missing puzzle piece in the mystery of how melanoma tumors control their mortality. I...

GSK announces positive Phase IIa study results for…

GSK plc (LSE/NYSE: GSK) announced positive results from a Phase IIa study demonstrating that GSK3036656, a first-in-class investigational antitubercular agent, was well t...

New drug shows promise for fighting both COVID-19 …

While vaccination can provide life-saving protection against COVID-19, scientists are still searching for ways to treat severe infections, including in people who cannot ...

Machine learning can help predict patient response…

Predicting which patients will respond well to treatment is a quandary that has plagued the field of cancer immunotherapy for more than four decades. Now, researchers at ...

Study reveals vaccine confidence declined consider…

A new study suggests that, despite the success of the COVID-19 vaccination campaigns, vaccine confidence has declined significantly since the start of the pandemic. Re...