RE:Big pharma is set to keep signing bigger deals in 2024
McKinsey & Company's Vision 2028 on China reported that : "China-originated biopharmas face many challenges in navigating overseas regulatory systems and institutions. The first challenge is to provide clinical data that meet thresholds that are already in place. Western regulators typically ask for patient populations that reflect their own region’s demographics, which limits the value of China only trials. Another challenge for China-originated biopharmas revolves around data and rigor. The clinical practices and trial data of China-originated biotechs must fully meet the FDA and EMEA’s requirements on data disclosure and data security as well as consider the evolving standard of care in specific indications. In the current geopolitical climate, it remains to be seen whether China’s transition to tighter regulations and global practices will be accepted by overseas regulators and other healthcare ecosystem stakeholders. Another component of integrating with global health systems is understanding the systems of payers, pharmacy benefit managers, physicians, and patients elsewhere. Without this understanding, China-originated biopharmas will not be able to gain broad acceptance for their innovations."
The likelihood of a stunted-impact scenario for China has increased over the past year.
Understanding this scenario is important given its implications for patients worldwide. This scenario would come about if geopolitical relations deteriorate to a point where key enablers, notably regulatory integration, take a step backward. [This appears to be now happening with the passing of the US Inflation Reduction Act (IRA) in January 2022]
[Consequently] China’s access to major global biopharma markets will become much more limited. The FDA or EMEA [has] stopped recognizing China-based trial data, in effect precipitating a return to pre-2017 conditions—that is, when China wasn’t part of the International Council for Harmonisation (ICH) and approvals in China required China-based trials. As a result, other countries might similarly decide not to recognize China-based trial data. VC funding [has begun] drying up , and MNCs significantly scale back their investments in the China market. The development of value chain capabilities for China is becoming constrained to a narrow scope of services, such as the provision of APIs.
This is an adverse scenario, with predictable consequences for each set of China stakeholders: