Made in China a Possibility for China Life Sciences?
Will the “Made in China” label ever be applied to innovative life sciences products? Over the past eighteen months Benjamin Shobert has been working with the National Bureau of Asian Research (NBR) to try and answer that question. Today they have announced the publication of NBR Report #56, The Rise of Chinese Innovation in the Life Sciences. This report the first-ever comprehensive evaluation of the Chinese Life Science sectors plans for emerging onto the world stage with “Made in China” innovative products.
In addition to Benjamin Shobert’s contribution, the NBR Special Report #56 is co-authored by Professor Joseph Wong and Xiaoru Fei.
Professor Joseph Wong is the Ralph and Roz Halbert Professor of Innovation in the Munk School of Global Affairs at the University of Toronto, where he is also Professor and Canada Research Chair in Political Science, and is widely regarded as one of the world’s topmost experts on China’s biotech industry. Xioaru Fei is a Research Fellow at the Innovation Policy Lab in the Munk School of Global Affairs at the University of Toronto.
Bullish on the Future of Domestic Chinese Life Science Innovation
The report is composed of two essays.
Professor Wong’s and Ms. Fei’s essays discusses key aspects of China’s life sciences ecosystem and the supportive role played by government. One of their conlcusions is that although in the near-term the outlook for China’s life science sector is positive, in the long- and medium-term the sector does not pose a serious challenge to existing global biotech leaders.
That being said, the authors see China’s reforms in the biotech and life science sectors are more free-market oriented than government orientation oriented, which is a good sign for the sectors continued development. And to be truly successful, the authors view continued and enhanced collaboration with global innovation networks in the life science field as a priority. (For more on one form of global cooperation, see Ben’s Forbes write-up on China life science leader Waterstone and its “Seaturtle” CEO).
Benjamin Shobert’s Essay, Priming the Pump: Applying Lessons Learned from High-Tech Innovation to the Life Sciences in China, explores the parallels between China’s approaches to clean technology and the life science sector in order to better understand the potential impact of “Made in China” drug development on the global life sciences industry.
Benjamin’s report draws the parallel between the rise of clean technology and life sciences because China was actually able to not only close the gap between itself and Western clean technology firms, but it was actually able to become a global clean tech leader.
Questions That China’s Innovation Raises for Western Pharma Companies
For Benjamin clean-tech’s “Made in China” success raises two questions:
- Will government-backed push in the life sciences sector will inevitably lead to China’s domestic drug innovation industry taking off?
- And, if not, What obstacles and challenges unique to life sciences generally and to Chinese regulation and incentive structures locally will determine a different path for the rise of “Made in China” pharmaceuticals?
What’s unique and very valuable in Ben’s essay is his focus on the very intimate relationship between China’s life science sector and Western companies and governments. Ben’s argument holds that life science community generally requires “a unique ecosystem”, global in scope, in order to thrive. That ecosystem involves a combination of “government funding, strong intellectual property laws, academic research…mature healthcare reimbursement systems.” And when a major market like China doesn’t have many of those components in place, the entire industry suffers, be it from regulatory risk, public relations issues, or a reduction of market potential due to dampened production of innovative products.
Consequently, Ben argues that Western companies and governments should use this early moment in China’s history to pay attention to China’s domestic reforms to ensure that their respective markets remain globally competitive, but also to help China develop a healthy life science ecosystem. Positioning one’s company to be competitive with the future wave of Chinese innovative products is surely important, but neglecting to help develop a healthy Chinese life science sector could pave the way for a global Chinese life science industry that will create tensions in global trade, for a list of reasons that Ben details in his analysis.
To understand more about the Made in China future of domestic Chinese life science and biotech products, download NBR Special Report, The Rise of Chinese Innovation in the Life Sciences.