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Jun 1, 2009 (Vol. 29, No. 11)

China Increases Healthcare Investment

Government Largesse Opens up Opportunities for Domestic and Multinational Companies

  • Research Efforts

    The government is not only subsidizing a wider range of vaccines, but it is also racing to invest in its own R&D. In 2006, The National Development and Reform Commission made new vaccine development a priority. The Ministry of Science and Technology has been providing funding for vaccine research via the National 863 Vaccine and Antibody program, the Pillar Program, and the National Innovative Drug Development Mega Project. 

    The National 863 program alone is putting nearly $30 million into vaccine R&D, and the Pillar Program is going to fund key platform technologies for vaccine manufacturing.

    Recent success include approved vaccines against Helicobacter pylori and bird flu, and two late-stage therapeutic vaccines for hepatitis B. Progress has also been reported on vaccines against HIV, for which Phase II trials were initiated in March.

  • Distribution and Manufacturing

    Click Image To Enlarge +
    Five-step production of cell culture flu vaccine

    While the vaccine market is growing and research efforts are stepping up, concerns remain over manufacturing and distribution. Moving to a more market-oriented model for vaccine distribution has had a generally positive effect on the industry, but it makes regulation and quality control of the distribution process more difficult.

    As vaccine distribution demands strict cold-chain logistics, some worry that certain distributors may disburse the vaccines  under room temperature and certain end-users may purchase from unqualified distributors to cut cost. The media is also becoming more sensitized to vaccine-related deaths, which are raising concerns over quality in vaccine manufacturing and distribution.

    Industry insiders say that China faces a dilemma—concentration of distribution in the CDC system could lead to corruption while a loosening up of control may result in quality problems. With recent crackdowns on distributors related to vaccine scandals, China is expected to find a balance via trial and error.

    Large-scale vaccine manufacturing in China is plagued with bottlenecks. Among the more than 50 domestic vaccine producers, only two are using bioreactors and these are relatively small (<100 liters). The rest of the industry is using roller-bottle manufacturing. The projected high growth of the vaccine industry in the next few years is expected to boost demand for bioreactors as well as services like cell-specific media development.

    China’s vaccine industry is expected to flourish as new healthcare reforms put more emphasis on preventive care. With strong government commitment, greater purchasing power, and market-oriented reforms, the vaccine industry in China is entering a phase of robust growth. Growing pains will accompany the process, but the modernization of the industry will likely benefit the Chinese population as well as domestic and MNC pharmaceutical companies seeking opportunities in the sector.

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