On March 2, 2021, the China Pharmaceutical Innovation and Research Development Association (PhIRDA) and the R&D-based Pharmaceutical Association Committee (RDPAC) jointly released "Building China's Pharmaceutical Innovation Ecosystem-Part One of the series research reports: 2015-2020 Development Review and Future Prospects" (hereinafter referred to as the "Report"). The series reports on "Building China's Pharmaceutical Innovation Ecosystem" aim to proceed from the top-level design, thoroughly analyze the impact of key elements such as basic research, policy, market (such as access, payment and procurement), capital on the improvement of China's pharmaceutical innovation capabilities. It finds out the weak links and challenges in the entire industry chain at this stage, and proposes constructive suggestions of substantial significance from multiple dimensions, with a view to building an internationally oriented ecological environment suitable for the sustainable development of China's bio-pharmaceutical innovation and making a positive contribution to China’s successful transformation into a strong power in pharmaceutical innovation. Since the launch of the project, authoritative experts in the industry and related fields have been specially invited to form an "advisory committee" (see the report for the list) to direct and guide the research framework and content of "Building China's Pharmaceutical Innovation Ecosystem" as a whole.
2020 represents the final year of the major scientific and technological projects in "Major New Drug Development"; 2021 represents the beginning year to further implement the innovation-driven development strategy during the "14th Five-Year Plan". The state has clearly listed the strengthening of strategic scientific and technological capabilities as the key work in 2021, and "consistent pursuit of innovation-driven development" will become China's core strategy in the next five years and even in the medium and long term. Today, when the self-developed COVID-19 vaccine becomes a weapon to protect the health and safety of the Chinese people and even the people of the world, it means China is able to march towards a powerful country in pharmaceutical innovation. The world is observing China's rapidly rising pharmaceutical innovation strength and potential contribution to global public health from a new perspective, which makes keywords such as "health", "innovation" and "cooperation" become the focus of attention. In such a special historical period, it is necessary to review and summarize China's pharmaceutical innovation capabilities and overall strength in the past five years, thereby providing guidance and reference for future "14th Five-Year Plan", for transformation and upgrading of China's innovative drug and China’s gradual move toward international cooperation and competition.
"2015-2020 Development Review and Future Prospects" is part one in the series research reports of "Building China's Pharmaceutical Innovation Ecosystem". Focusing on reviewing the construction of China's pharmaceutical innovation ecosystem in the past five years, it summarizes progress in policy environment, capital investment, and innovation body capacity building, concludes the output of China's pharmaceutical innovation from the two aspects of "quantity" and "quality", and makes a preliminary outlook on the construction of China's pharmaceutical innovation ecosystem in the next five years. The highlights are presented as follows.
1. Looking back on 2015-2020: China's pharmaceutical innovation ecosystem has achieved remarkable results
It is points out in the report that since the reform of the drug regulatory system and drug review and approval mechanism in 2015, the policy environment has been significantly improved as reflected in the top-level design of China's pharmaceutical innovation ecosystem and the introduction and implementation of a series of specific policies. Moreover, government funding and policy support have also driven social capital investment, which strengthens China's innovation capabilities, so that China's pharmaceutical innovation ecosystem has been initially formed, with pharmaceutical innovation industry flourishing and continually integrated with the global innovation industry chain.
i. With definite top-level design and simultaneous implementation of all measures in all links, the pharmaceutical innovation policy environment is significantly improved
From the determination of the top-level design of China's pharmaceutical innovation ecosystem to the introduction and implementation of a series of specific policies, including the reform of the drug review and approval system, the management of clinical trial institutions, increased protection of drug payment, encouragement of basic research, and strengthened protection of drug intellectual property rights, etc., overall consideration is given to the various elements of pharmaceutical innovation and development. Through multi-departmental coordination and orderly implementation of various policies, the policy environment for China's pharmaceutical innovation has been significantly improved, which is specifically reflected in: (1) Efforts to focus on reform of the drug regulatory system, perfect the review and approval mechanism and capacity building, enhance quality and efficiency, guide innovation. (2)Efforts to strengthen the management of clinical trial institutions, release clinical resources, and facilitate innovation. (3) Efforts to optimize the medical insurance catalog adjustment mechanism, build a multi-level medical security system, improve the payment guarantee for innovative drugs, and feed back innovation. (4) Efforts to strengthen basic research on innovative science and technology, promote the "trilogy" of transformation of scientific and technological achievements, and encourage innovation. (5)Efforts to improve legislation, introduce drug patent period compensation system and patent link system to protect innovation.
ii. Environmentally friendly policies and government funding support drive social capital investment, and jointly promote innovation and development
China's pharmaceutical innovation policy environment has been greatly improved, and the role of government funding and support cannot be ignored. The major science and technology project of “major new drug development” has been implemented since 2008 to support more than 3,000 projects. The central government has cumulatively invested a total of 23.3 billion yuan, achieving fruitful results in independent innovations in the field of 10 major diseases. It is precisely because of the environmentally friendly policy and the stimulating effect of government funds that the global capital market has been actively investing in China's innovative drug with sustained enthusiasm. With it, the number and amount of financing continually grows, with social capital investment significantly increased. The "China Pharmaceutical Innovation and Investment Conference" sponsored by the China Pharmaceutical Innovation and Research Development Association has been successfully held for five sessions, which has greatly promoted the cooperation and exchanges between pharmaceutical innovation and social capital. In addition, the continuous increase in the number of listings and market value of local innovative pharmaceutical companies in recent years also reflects investors' recognition of China's pharmaceutical innovation capabilities and potential.
iii. Local pharmaceutical companies strengthen R&D, multinational companies adjust their layout, and various innovation entities collaborate to drive innovation
Faced with China’s new medical reform trend, multinational pharmaceutical companies consecutively adjust their strategies in China, promote the enhancement and re-upgrading of the innovation capabilities of both parties amid the competition and cooperation with local pharmaceutical companies in the field of innovative drug, focus on developing and marketing new drugs in the disease areas with the highest burden and the highest growth rate in China, and jointly implement the "introduction" and "going out" of innovative drugs to meet the urgent clinical needs of Chinese patients. (1) Local pharmaceutical companies have increased their R&D investment by building an independent R&D system. Many pharmaceutical companies have reached the international advanced level in investment intensity. By carrying out international multi-center clinical trials, more innovative Chinese drugs have been recognized by the U.S. Food and Drug Administration (FDA), thus realizing the gradual internationalization of local innovative drugs. Many large pharmaceutical companies have an average annual R&D expenditure of more than 1 billion yuan, with R&D investment accounting for more than 10% of operating income. (2) Since the beginning of this century, multinational pharmaceutical companies that have re-examined the role and contribution weight of the Chinese market in global development strategies have gradually shifted from registering new drugs for marketing purposes to viewing China as an innovation base for innovative drug research and development synchronized with Europe and the United States. Multinational pharmaceutical companies have established and upgraded Chinese R&D centers, extensively cooperated with international research institutions, experts in various fields, and local pharmaceutical companies, cultivated a large number of local R&D talents in China. China has increasingly more participation in clinical research on innovative drugs, gradually implementing the model of introducing new drugs through participation in global simultaneous development. (3) In 2020, the number of cooperation projects between multinational pharmaceutical companies and local companies exceeded 80, recording unprecedented heights in both scale and quality.
iv. The inevitable result of ecosystem construction: China's pharmaceutical innovation has achieved remarkable results, with its global contribution ranked in the "second echelon"
The achievements of China's pharmaceutical innovation are inevitable results of the construction of China's pharmaceutical innovation ecosystem. At present, judging from the number of pharmaceutical innovations and their contribution to the world, China has moved from the "third echelon" to the "second echelon". According to the report, as of February 2020, the global contribution rates of the number of innovative products under development in China and the number of new drugs newly launched in the world were 13.9% and 6%, respectively, while the contribution rates were only 4.1% and 2.5% in 2015. Seen from the number of innovation pipelines, China has steadily ranked first in the second echelon in 2020, showing a smaller gap with the United States in the first echelon (the United States contributed to 49.3% in 2020). However, in terms of the number of new drugs on the market, there is a significant gap from the United States (67.6%) ranked the first, and Japan (13.3%) ranked the second.
At the same time, the report believes that the quality of China's pharmaceutical innovation needs further improvement, and there are phenomena such as agglomeration of targets and homogeneous innovation in research and development. The main reasons are the constraints from insufficient local originality capabilities and the influence of capital investment preferences.
2. Looking to the future, China's innovative pharmaceutical ecosystem will be more dynamic and more internationally competitive
In the next five to ten years, the burden of chronic diseases such as cancer, cardiovascular and cerebrovascular diseases, diabetes, and respiratory systems will become heavier; and the outbreak of the COVID-19 epidemic once again reminds us that the threat of infectious diseases will persist for a long time. Therefore, better prevention and treatment of cancer, chronic diseases, and infectious diseases will effectively improve the health of the whole people.
In the face of complicated domestic and international environmental changes, the COVID-19 epidemic has pushed China's innovative drug to the international stage. China's pharmaceutical industry has assumed an unprecedented role in the world. The opportunities and challenges faced by pharmaceutical innovation are also unprecedented. In the future, China's pharmaceutical innovation industry should take "Healthy China 2030" as the goal and "Four Orientations" as the guiding spirit to adhere to the innovation-driven development strategy, further consolidate and improve the construction of China's pharmaceutical innovation ecosystem.
In this context, the development of China's pharmaceutical innovation ecosystem in the next five years should focus on three key points: The first is to enhance the competitiveness of the pharmaceutical innovation industry with "marketing of new drugs" as the core. There is need to achieve higher-quality development through deeper reforms and higher levels of openness, changing from the previous "follow-up" in the third echelon to the "running side by side" in the current second echelon, and then to the "leader" of the first echelon in the future. The second is to improve the accessibility of innovative drugs with "patient benefit" as the core. We should increase investment in hygiene and health, increase the efficiency of capital use, use innovative drugs with high clinical value, contribute to people’s healthy life, strengthen early diagnosis and prevention of diseases to achieve a higher return on capital investment, and reduce burden of cancer, chronic diseases, and infectious diseases. The third is to guarantee sustainability of the industries with "returns on innovation" as the core. We should ensure capital and continuous R&D investment of pharmaceutical companies, and benefit patients with more breakthrough innovations.
In the past five years, China has established a vigorous pharmaceutical innovation industry based on the advanced concepts of the innovation ecosystem, top-level design vigorously promoted from top to bottom, fair competition and highly integrated innovative enterprises. China is now at an important historical node for the transition from a large manufacturing country to a strong pharmaceutical innovation country. Looking forward to the next five years, we still need to take a far-sighted view, take advantage of the situation, achieve higher-quality development through deeper reforms, higher levels of openness, and international cooperation, promote and achieve the ambitious goal of building a "human hygiene and health community" with the posture of a strong country in pharmaceutical innovation.
[Additional words] China's pharmaceutical industry is facing a great opportunity to achieve leapfrog high-quality development. The development direction and plan for the next five years are crucial to China's construction as a pharmaceutical innovation power. What are the weak links in the construction of China's pharmaceutical innovation ecological environment at this stage? What will be the future development direction? How to improve China's current weak links? How to integrate the efficiency and quality of research and development with international standards? How to construct the innovation-oriented diversified payment guarantee system? Please refer to the content of the follow-up series reports on China's pharmaceutical innovation ecosystem.
China Pharmaceutical Innovation and Research Development Association
Established in 1988, China Pharmaceutical Innovation and Research Development Association (PhIRDA) is a non-profit national 4A social organization registered with the Ministry of Civil Affairs. Adhering to the tenet of “innovation, industrialization, and internationalization”, guided by clinical needs, PhIRDA has long been committed to the close integration of “industry, university, research, and funding” to promote the innovation and development of pharmaceutical industry. It has become a pharmaceutical innovation industrialization promotion platform composed of pharmaceutical innovation research and development enterprises, scientific research institutions, clinical research institutions, innovation service institutions and pharmaceutical investment institutions, currently with 151 member units. The association has established professional committees for drug research and development, drug clinical trial research, pharmaceutical policy, pharmaceutical innovation investment, innovative research and development services, cardiovascular drug clinical research, international innovative drug supervision, clinical research on anti-tumor drugs, clinical research on neurological drugs, and compliance of pharmaceutical companies, forming a full-chain organizational structure covering drug R&D, production, use, investment and financing with innovation as the core and innovation promotion as the goal. Moreover, it continues to expand international exchange channels as a member of the International Federation of Pharmaceutical Manufacturers Associations (IFPMA).
RDPAC
The R&D-based Pharmaceutical Association Committee (RDPAC) is a non-profit organization composed of 44 multinational pharmaceutical companies with research and development capabilities, which is affiliated to the "China Association of Enterprises with Foreign Investment." As of June 2020, RDPAC member companies have set up 47 factories and 25 R&D centers in Mainland China. From July 2015 to June 2020, RDPAC member companies have cumulatively introduced more than 206 innovative drugs to the Chinese market. RDPAC members share the same aspiration with the Chinese government and local pharmaceutical companies, that is, hoping that China will become a major power in pharmaceutical innovation. RDPAC looks forward to working together and developing collaboratively with the Chinese government, realize this wish and enable innovative drugs to benefit more Chinese and global patients.
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