HONG KONG – China’s economy may be slowing down, but multinationals are positioning themselves to leverage it as best they can while navigating a still-complex regulatory environment. The latest: Pfizer Inc. last week broke ground on a $350 million biotechnology facility in eastern Hangzhou. The Global Biotechnology Center will be Pfizer’s first biotech center in Asia and its third globally.

It will be located in Hangzhou Economic and Technological Development Area (HEDA), a popular investment destination for many foreign companies, about two hours out of Shanghai along the heavily industrialized Shanghai-Nanjing corridor.

“China continues to represent an important opportunity for the pharma industry driven by favorable health polices and increasing demand for better quality health care,” Pfizer public relations manager for Asia Pacific, Loucineh Marisirossian, told BioWorld Asia.

One motivation for the New York-based company is an expectation that setting up a biotech center in China will help it secure faster product approvals. Regulatory hurdles in China have delayed access to medicines. Registering a new treatment can take up to eight years on average compared to four in the U.S.

“Recent reforms are encouraging international multicentered clinical trial application, and supporting simultaneous native and international clinical trials,” said Marisirossian.

In addition to regulatory hurdles, price caps have reduced the growth of the world’s second largest pharmaceutical market to a single digit percentage, a huge drop from 20 percent growth rate recorded four years ago.

However, with the CFDA announcing a new work plan to reform drug registrations last March, things could change, particularly given the pent-up demand for better health care across the country.

“China has seen significant advances in health care reform such as the world’s largest medical health care coverage and introduction of catastrophic disease insurance. The recently adopted 13th Five-year Plan identifies health care as an ongoing priority,” said Mardirossian.

The IMS Institute for Healthcare Informatics estimates China’s annual spending on drugs could reach $190 billion by 2020.

Biologics account for just 4 percent of drugs used in the country, far lower than the 22 percent in the U.S., according Pfizer.

Pfizer said the new biotech center will mostly focus on biologics rather than chemical drugs as well as lower cost biosimilars.

The move to launch the new center may also help the U.S. company address other challenges it faces in China.

Last year, Pfizer’s vaccine business had to suspend its China operations after regulators did not renew the import license for its top-selling Prevenar 7 vaccine for pneumococcal bacteria. (See BioWorld Today, April 5, 2016.)

Pfizer’s new facility will house its biosimilars and biologics quality, technical services, logistics and engineering divisions. In addition to commercial manufacturing, the center will also serve as a process development and clinical supply site. Construction should be completed by 2018.

In order to speed up the process, Pfizer will rely on single-use KUBio modular construction provided by GE Healthcare, which should both cut costs and increase production flexibility by as much as half, according to the company.

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