China's pharmaceutical market is expected to reach $332 billion (473 trillion won) this year, according to a new outlook. China is nurturing pharmaceuticals as a national strategic industry. Backed by massive government support and a firm grip on the market, China is rapidly catching up with the United States.
Korea Institute of Science & Technology Evaluation and Planning (KISTEP) said this in the report "The rise of China's biopharma and Korea's response strategy," released on Oct. 16. China's biotech technology export (license-out) contracts reached $51.9 billion (74 trillion won) last year, up 27% from the previous year.
A strong, government-led policy is cited as the driver of China's biotech growth. Since 2015, China has pursued a policy to launch 30 new drugs by this year. Securing funding and talent and easing regulations have streamlined clinical trial procedures and lowered the expense.
The Australian Strategic Policy Institute said China has already surpassed the United States in antibiotics and viruses, genome analysis, synthetic biology, and biomanufacturing technologies. China's domestic total expenditure on research and development (R&D) is similar to that of the United States. The report said, "The U.S.-China competition for supremacy in biotech is intensifying," adding, "It affects not only simple industrial competition but also the international community's security strategy."
The report said Korea also needs to actively foster the bio industry. Next year's national R&D budget is 35.3 trillion won, a 19% increase from this year. Noting that government resources are limited, the report proposed the NewCo model, in which pharmaceutical companies and investors establish a new corporation centered on a specific technology.
Chinese biotech firms also began, starting in 2021, to set up entities overseas and attract capital. Moderna, which developed a messenger RNA (mRNA) vaccine for COVID-19, also began with a NewCo model with venture capital, Harvard, and the Massachusetts Institute of Technology. The report said, "Discussion is needed on a K NewCo model."