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Large potential exists for follow-on biologics market in China, but
production costs could present challenge, sources say
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by Jacqueline Kwong in New York and Marc Longpré in San Francisco.
China is a potentially attractive market for follow-on biologics (FOBs), especially with dramatic
healthcare reforms currently being undertaken, sources told this news service. But a number of
hurdles – most notably the high cost of production – could prevent foreign companies from taking
advantage, the sources said.
Regulatory standards for follow-on biologics are generally more liberal than in the United States,
several attorneys pointed out, with the innovator companies lacking the influence they largely
enjoy in the US. And follow-on biologics are already more widely available than they are in
Europe, with more than 20 such products already on the market.
But despite the pressure to introduce FOBs to the Chinese marketplace, production costs and the
fact that successful products in the US may not enjoy the same success in China may hinder entry
to the market, according to Narinder Banait, a partner at Fenwick & West. Banait said the lack of
IP protection also discourages some companies from entering the market.
Still, there is a huge opportunity for follow-on biologics in China, said Stephen Bent, a partner
with Foley & Lardner. Many pharmaceutical companies are moving into China with their branded
drugs, and follow-on biologics will follow, he added.
Recently Dick Clark, CEO of Merck, voiced his intention to continue the company's push into
China, pointing out the company has expanded its sales force there by 60% in the last 18 months.
The company has also recently launched Merck Bioventures in order to compete in the follow-on
biologics market. A number of large pharmaceutical companies are eying the potential Chinese
market, Banait said.
Michael Connelly, a partner with McDermott