Biotechnology goes East

1. Biotechnology goes East • Peter Singer • Senior Scientist and Professor of the McLaughlin-Rotman Centre for Global Health • Email: • peter.singer@mrcglobal.org

2. Innovating on Behalf of the World’s Poor China and India as R&D-based innovators, and their contributions to global health Professor Peter A. Singer MD, MPH, FRCPC, FRSC

3. Evolving Indian and Chinese Biotech Industry China's biopharmaceutical market totaled ~$4.2 billion, annual growth of 24%, in 2006 India’s biopharmaceutical market totaled $1.45 billion, annual growth of 26%, in 2006 Nat. Biotechnol. 25 (4), 403-417 (2007) Nat. Biotechnol. 26 (1), 37-53 (2008)

4. Business Models in China and India 1. Domestic price competition • Incremental innovation leads to affordability 2. Distribution • Indian Immunologicals, 2,700 Abhay Clinics 3. CRO’s • WuXi Pharmatech, NYSE 4. Shifting to innovative product development • Transition from ‘made in China’ to ‘made by China’ 5. Transition to nonlocal markets • High-volume, low-cost strategies for health needs in other developing regions 6. Entering the global phase • Shifting focus to disease areas in developed countries

5. Policies encourage biotech, but not necessarily for global health • Indian biotech policies • National Biotech. Dev. Strategy: $1.6 billion • Biotech. Industry Research Assistance Council: interface academia & industry • Chinese biotech policies • The 11th Five-Year Plan: prioritize public health • 863 High-Tech R&D Program: strong commercialization focus, $52 million allocation • Challenge • Both governments committed millions to support growth of their biotech industries, but have no clear reward structure for investments made for global health innovations or innovations for ‘diseases of the poor’

6. What governments can do • Identify health priorities, provided dedicated financial support • Create regulatory fast track • Provide explicit incentive packages • Example: U.S. Orphan Drug Act • Principle of cost reducing “PUSH” + revenue-enhancing “PULL” • PUSH: funding for building up research capacity & innovative R&D • PULL: provide revenue incentives such as guaranteed market through public procurement programs

7. Policies encourage global health, but not necessarily India and China • PDP’s • 15 established with more than 50 pipeline products backed by $3 billion • 25% MNC, 45% SME (<10% developing countries firms) • AMC’s • Pays only for success • Pneumococcal vaccines pilot backed byCanada, Italy, UK, Russia, Norway and Gates Foundation ($1.5 billion, launch mid-2008) • Challenges • Sustainable funding for scaling up • Lack resources to conduct Phase III trials • Cost of AMCs for major global diseases: >$10 billion • Some PDP efforts with China and India, but primary drivers are still MNC’s in U.S. and Europe.

8. What PDPs and AMCs can do Turn to Chinese and Indian companies to develop solutions for global health needs • Cost saving  accessibility & sustainability • Growing capacities for innovative R&D • Better understanding of diseases in developing markets • Limited window of opportunity before companies start to shift focus to develop products for more profitable markets in developed countries

9. Main Argument • With evolving research and innovation capabilities, China and India have the potential to be high-quality supplier and innovator for global health needs. • However, international donors and local governments must create better incentives to mobilize these emerging companies before they shift focus.

10. Thank You Additional funding partners for the McLaughlin-Rotman Centre for Global Health can be found at www.mrcglobal.org