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.