To Promote R & D Outsourcing Service & To Build Global Science & Innovation Center
Source: View: 254 Date: 2015-07-02

The new round of revolution of industrial layout in global has provided a strong driven power of rapid growth for China’s R & D outsourcing service market. In recent years, R & D outsourcing service has rapidly transfered into Asia and other locations; and China has become the biggest undertaking country.

In high-tech industries, because CRO has become the most common performance in R & D outsourcing service, the industry in China has developed as a new emerging high-tech service industry, and become important component of chemical medicine and biological medicine industries. The CRO of China mainly gathers in Beijing, Shanghai, Nanjing, Suzhou, Wuxi, Chengdu, Guangzhou and Shenzhen; among them Shanghai has perfect biological medicine innovative system and industrial groups, the city also is the most centralized, strongest innovative ability and the most outstanding base for gathering R & D institutions in China’s biological medicine area.

Although there are more and more outsourcing businesses undertaken by CRO from China, the industry is still totally in the primary stage of “labor-intensive”. To some extent, “R & D outsourcing” can be seen as “production outsourcing”; many enterprises can’t get rid of difficult situation of “do hard work & earn little money” that only can earn 10% of additional value from hi-tech products. It is difficult for local CRO to breakthrough high-end market; because they are not familiar with innovative process in industry, have not enough strength to undertake business; therefore some orders with high add-value are always grasped by India.

In fact, the innovative abilities of local CRO is stronger, it can undertake more high-end R & D outsourcing. Different degrees of R & D outsourcing have different organization forms: the operating organization form, the knowledge organization form and controlled organization form. Multinational enterprises will choose the operating, the knowledge and the controlled organization forms in turn, when innovative abilities of local CRO increase. Correspondingly, the laborites undertaken R & D from local enterprises also can be divided into following type, contract type and participating type. With improvement of R & D’s abilities, the organization forms undertaking R & D outsourcing from local enterprises in China will go forward one by one.

In national biological medicine area of 11 new emerging markets, these aspects in China from capital, patent, influenced publishing, university ranking in global, clinical research and talent pool are leading all over the world; the industry has become currently the most attractive location for biological medicine R & D. Some local CRO is forming their own abilities those can compare with the world first-class standard; then multinational enterprises no longer ask “What services we can provide?” but will seek “which activities need outsource” Nearly all of multinational pharmaceutical enterprises outsource partly R & D activities or whole R & value chain to China; partly multinational enterprises put far vision to help China’s CRO to rapidly develop innovative abilities. For example, GSK has signed a ten-year contract with Shanghai Institute of Material Medica, Chinese Academy of Sciences. Johnson & Johnson also has cooperated with Wuxi Yaomingkangde New Medicine Development Co., Ltd to make non-clinical safety testing. Yaomingkangde provides toxicology and other services for Johnson & Johnson; while Johnson & Johnson provides GLP system and ability training for its partner.

In spite of this, it is still long way to go for local CRO in China to promote and set up science & innovation center in global. First of all, although China’s government highlights biological technology industry as mainly important support industry in plan of “The 12th Five Years”, the total investment amount of R & D in biological medicine industry is still not enough only accounting for 5% of investment in America. The second one is that multinational pharmaceutical enterprises still face many cost problems from incomplete contract, exclusive knowledge, not completely replace of accumulative innovations when they outsource R & D to local CRO in China. Because of disadvantages of relative laws and regulations, multinational pharmaceutical enterprises worry about these problems such as high cost of R & D from local CRO in China and weak protection of IP.

How to improve service abilities and contributions of CRO for constructing science & innovation center in global?

From micro level, although there are many CRO in China, most of them are small & middle enterprises lacking of leading big enterprises. There are more than thousands of CRO in China, especially the number of clinical CRO rapidly increase. However most of these CRO are only registered and applied and have different degrees of service quality; so they can’t provide a comprehensively clinical testing service. Therefore, how to support main CRO enterprises in China to become international giants of CRO has become an urgent mission.

Although scientists trained from the West and cooperation relationship in global can improve R & D intelligence of CRO in China, for reserve teams needed by cultivating basic research and new medicine R & D, China has still a long way to go. For example, China now has not universities and research institutions to open teaching practices with adventurous and trial & error spirits; but the adventurous spirits is promoting power for life science area to innovate in USA.

From medium level, although the abilities of CRO in China has expended to each part of R & D value chain, there is still a little of CRO can provide comprehensive service of new medicine R & D. Because unreasonable structure centralized in new medicine discovery and preclinical studies area or in clinical research area, relatively simple services have become short boards for CRO enterprises. Therefore it is necessary to perfect industrial structure of CRO as soon as possible, to do identified work of certificate. Because pharmaceutical enterprises only willing to cooperate with formal and strong CRO; it is also necessary to perfect certificate identification system of CRO as soon as possible.

Actually, in order to improve creative abilities of CRO industry in China, it is necessary to solve ecosystem problem. That requires further development of whole medical system and medical care system; to construct inspiration and to absorb new drug regulatory system, IP protection system and medical care system with new technologies.

From the macro level, because currently regulatory and regulation in China still have long way to catch up with international standard, long examination and approval time; those reasons let China less undertake international MCT compared with neighboring countries like India. MCT only occupies small part of clinical testing each year in China, but it represents the highest level of medicine clinical research development. Besides that, the law and regulatory environment of preclinical research and clinical research in China still have differences with the West; therefore it is necessary to perfect relative laws & regulatory environments.

It needs explain that although CFDA has great improvement in providing regulatory structure and encouraging innovation; because FDA has thousands of people to manage medical projects while China has not 100 people, it still a young institution need to enrich employees and to improve abilities.

Devott Publications
The Selection of the TOP Global Outsourcing Destinations – China TOP 15 (TGOD China TOP 15) Ended and Its Rankings and Research Reports are Now Available Worldwide