
For years, leading life sciences companies have looked to Asia as the next frontier. While a popular & almost necessary strategy for any global organization in the life sciences, to date most significant investments in China or India have been measured only by unrealized potential.
Still, the move makes sense for a number of reasons. First, employee cost is low. While the talent market in China remains challenging and competitive, it is improving. Secondly, the markets are simply too big to ignore. While underdeveloped and fraught with risk, the population volume dictates the future potential of the region as healthcare matures and the patient base grows exponentially in the coming decades.
Until very recently, China was not always the obvious bet. A westernized culture, a friendly government and an advanced infrastructure made Singapore the pick for most Asia Pacific headquarters. But again, the growth in northern China and the improvements in the supporting business environment in places like Shanghai have turned the tide. While many companies maintain their Asia Pacific HQ in Singapore, almost all understand the necessity to be in (not just near) northern China.
Announcements last week by two of the life sciences industry’s largest employers again validated the life sciences industry’s ongoing curiosity and commitment to operations in China.
Novartis plans to pump a billion dollars into its R&D operations in China over the next five years, expanding its scientific ranks in the Asian economic powerhouse from 160 to 1,000 as the pharma giant constructs a new research complex designed to rival centers in Europe and the U.S.
The strategy includes expanding its Institute for BioMedical Research in Shanghai and a global ‘technical center’ for research and manufacturing in Changshu. These moves easily make Novartis the largest biopharma R&D operation in China.
In the same news cycle, Pfizer announced its own plans to expand R&D operations in central and western China, specifically, a new R&D centre in Wuhan and expansion of its existing R&D facility in Shanghai. According to Allan Gabor, Pfizer’s Regional President in China, Pfizer’s R&D operations in Wuhan will support global clinical drug development programs while Shanghai will remain the operations hub of Pfizer’s R&D in China.
For most of us working in the US or Europe, these announcements come across as ‘a world away’ and literally they are. Still, the globally diverse workforce of the future that is sure to evolve in the coming years for true multinational life sciences companies includes a signficant presence in China. As Novartis CEO Dan Vasella said it best on a recent trip to Shanghai: “You have to ask yourself where do you need to be down the road, and clearly it is here.”