AstraZeneca: Never mind China's scandals

Posted by: Bruce Einhorn on July 3, 2007

European pharma company AstraZeneca has chosen an odd time to announce a new China initiative. The headlines these days are full of scare stories about dangerous made-in-China products. If you’re a drug company making a big move into China, this is not the sort of environment in which to reveal that you’re planning to increase the amount of ingredients you buy from the country.

But surprisingly that’s what AstraZeneca has just done. According to ChinaBio, as picked up here by Yahoo, AstraZeneca “will open a sourcing center in China to source APIs [active pharmaceutical ingredients] there, with the goal of placing orders for $100 million of APIs by 2010. Eventually, it expects 90% of its APIs to come from China. According to AstraZeneca officials, the change comes because of the increased protection for Intellectual Property in China and the high quality of manufacturing there.” (My emphasis.)

“High quality of manufacturing” isn’t what comes to mind right now when lots of people think about China. But when it comes to expanding in China, AstraZeneca has been one of the most aggressive pharma companies. AZ last year said it plans to invest $100 million to build up its R&D presence in China. Demand is growing fast for prescription drugs in China, which many people predict is going to be one of the largest drug markets in the world within a few years. So maybe the timing of the AZ announcement is not so odd after all. At a time when people worldwide are beating up on the Chinese, AZ can score some points with the government by expressing confidence in the country’s manufacturing standards.

Reader Comments

Andy

July 3, 2007 2:33 PM

I'm suspicious of the quality complains of Chinese products recently. It seems to me that it is just too coincide with the failure attempts of the US to stop the deficit with China. After all failed attempts, maybe it is time for the US to dig the garbage can.

tony

July 4, 2007 1:54 AM

I am sure that the products made in China are not up to the standards set by Japanese. However, the latest media frenzy to associate “made in China” with bad quality is more China bashing or alarmist fueled by the trade deficit. China exports trillions worth of products or hundreds of thousand of different products. Statistically, the incidents are insignificant. I recall Bridgestone made a nationwide recall and even all mighty Toyota made some recall due to product defects. No one brands them as poor quality. I recall General Mill’s Ecoli-infected food products cause some human fatalities in the country in the 90s. General Mill’s food products are still among the most popular. I am sure all those reports on the incidents are factual. However, we should not generalize.

Majorities of my staff are made in China for past 15 years. I never have any issue with it. Some of them are of shoddy quality and some of them are among the best, e.g. IPod and my IPhone.

lili.chen

July 5, 2007 3:18 AM

I am Chinese,I experience the rapid growth of Chinese market.I really enjoy it,although there are many problems in China's economy.Why not give more time and space for China's improvement?

In my view,so-called standard is just a tool used by those non-chinese producers who want to
impose bad influence on their Chinese competitors
and prevent intenational comsumers abandoning their expensive products.Their worry is their Chinese cometitors will gain more market share from their hand.

Nikolay

July 8, 2007 11:42 AM

Also we need to keep in mind that as the blog entry states, China will be a huge market for prescription drugs so AZ is lining up its capacity to meet that demand. So not all the output from the new investment by the pharma company will go to export...

Katie Li

July 17, 2007 7:13 AM

The food scares is not really a bad thing for China at all. In my opinion, I think it is a blessin in disguise. And now the Chinese government is paying more and more attention to the quality of Chinese products, more monitoring, quality inspections, shut down illegal food stalls and factories, China state owned television CCTV went undercover and discovered the tainted steam buns. The food scare is probably an opportunity for China to improve its product quality and make it to the european standards.

http://english.peopledaily.com.cn/90001/90780/91344/6217601.html

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