Yet there is cause for optimism on all fronts. Scientists are quickly gaining experience, and the government has outlined plans to boost regulatory efficiency. In August, only a month after the former head of the SFDA was executed, the agency pledged to spend $1.2 billion to upgrade drug and food oversight. The SFDA is also working to cut review time to approve the sale of priority drugs in China.

 

As China’s domestic drug market has expanded and its scientific and regulatory environment improved, foreign drug companies have been accelerating their investments in R&D. In the late 1990s and early 2000s, leading drug makers initiated research in China via a few low-key, small-scale partnerships with academics or government-run scientific institutions. More recently, they’ve begun to offload chemistry assignments on a growing scale to an emerging crop of CROs. For the most part, these have been discrete projects involving relatively straightforward work that is considered unlikely to lead to big innovations. Yet the stakes are now getting higher as some firms funnel cash into standalone research centers and embark on more sophisticated relationships with local research groups.

 

Lilly’s two flagship R&D partnerships include a five-year-old exclusive collaboration with CRO Shanghai ChemExplorers and, as of August 2007, a deal with Shanghai-based Hutchison MediPharma to study targets involved in cancer and inflammation. By collaborating with an existing firm rather than building its own R&D facility, Lilly gains greater flexibility in its research. And Hutchison can offer capabilities that Lilly may not have, Zhu says.

 

GlaxoSmithKline is outfitting a Shanghai-based R&D center to direct its global discovery and development in neurodegeneration. In the first three years the center will focus mainly on building up drug discovery capabilities related to disorders such as multiple sclerosis, Parkinson’s disease, and Alzheimer’s disease. It will then start scaling up clinical development. The center, expected to become one of GSK’s bigger facilities when it is completed, eventually will encompass drug-target identification to late-stage clinical studies. Jingwu Zang, head of the Shanghai R&D center, predicts that in a decade it will employ more than 1,000 scientists.

 

GSK’s plans reflect an increasingly common theme: China as a venue for research of global relevance. Most foreign drug makers conducting R&D are investigating treatments for diseases commonly seen in both the West and Asia.

 

There are a few exceptions. For example, Novartis has identified as one of its main research areas the hepatitis viruses that cause liver cancer and which have had a particularly damaging effect in China. About one-third of the 400 million people infected with hepatitis B worldwide live in China. Likewise, AstraZeneca initially plans to focus its research on cancer, especially the liver and gastric cancers that have such high incidences in China.

 

However, the diseases prevalent in China today increasingly mirror those seen in the West. An unfortunate byproduct of China’s economic success is the growing number of mainlanders suffering from obesity, diabetes, and cardiovascular disorders, the so-called “diseases of affluence” common in the West. According to the World Health Organization, China has the world’s second-highest number of deaths from coronary artery disease.