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Evolving landscape of pharmaceutical outsourcing in China

22 October 2012  •  Author(s): Xiaorong He, Senior Research Fellow, Boehringer-Ingelheim

China’s economic growth has shocked and awed the world, with its GDP growing at an average rate of 10 per cent for 30 years1. The astonishing economic growth has also spurred rapid growth of pharmaceutical outsourcing business in China. In the past, China had been the major source of raw materials, basic intermediates and commodity bulk drugs for the pharmaceutical industry. Starting five to 10 years ago, China gradually moved up the value chain, providing a wide spectrum of services encompassing drug discovery support, preclinical development, clinical trial and contract manufacturing services to western Pharmaceutical and biotech companies.

PricewaterhouseCoopers ranked China as the most desirable pharmaceutical outsourcing location in Asia when considering the overall scores of cost factors, a range of risks associated with the territory environment and the extent of the market opportunity2. This article analyses key opportunities and risks in pharmaceutical outsourcing to China in the context of changing economic, political and social conditions. Hopefully, this will provide a useful framework to understand how the pharmaceutical outsourcing landscape has been and will be evolving in China.

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