The pain of R&D in Chinese pharmaceutical companies

At present, the shift in the mode of economic development has been on the agenda. For China's pharmaceutical industry, how to achieve successful transformation is faced with many difficulties and obstacles. Since the pharmaceutical industry is a knowledge-intensive industry, the level of research and development has fundamentally determined the international competitiveness of the entire industry. Therefore, how to fully enhance the research and development capabilities of pharmaceutical companies has become the most crucial proposition.

In the past few years, I have visited many domestic pharmaceutical companies. One of the most direct impressions is that most companies have focused their attention on sales growth and profit growth, and not on the improvement of R&D investment. Many companies have not. R & D department or relatively fixed R & D personnel. A common-sense question then emerged: How would a pharmaceutical industry that lacks a true R&D foundation achieve a true structural transformation?

According to the international average, in the global scope, pharmaceutical companies invest 8% of their sales revenue each year in R&D, while developed countries in Europe and America reach 15-16%, and even some companies even reach 20%. the above. From the point of view of industrial economics, the R&D capabilities of a company are generally measured from the perspective of human and financial input, ie, the proportion of scientific and technical personnel and R&D expenses. From the initial level, the proportion of scientific and technical personnel in China's pharmaceutical manufacturing industry is 4%, which is far below the international advanced level benchmark of 20%, and the proportion of research and development expenses is less than 2%, which is far below the international average. In the past ten years, although the total output value of our pharmaceutical industry has grown by double digits each year, both of these indicators have grown slowly, which is in contrast with the large favorable situation. In order to illustrate the issues more clearly, we can see from the figure below that many of our leading companies still have considerable distances in terms of R&D investment from the international average, especially the advanced level.

There is also a set of data. In 2005, the internal R&D expenditure of the Chinese pharmaceutical industry was only 4.34 billion yuan. In the United States, Pfizer’s R&D investment reached US$7.442 billion in the year. The R&D investment of this company is about 12 times that of all industries in China. In the pharmaceutical industry, one of the most important indicators of technological competitiveness is the number of innovative drugs that companies have. According to statistics from the Shanghai Institute of Pharmaceutical Industry, from 2003 to 2005, there were more than a dozen major countries in the world. The number of innovative drugs is 261, 199, and 290, respectively, and China has yet to develop truly innovative drugs. In 2006, the R&D personnel of 60 large-scale pharmaceutical companies in China accounted for only 33.8% of the total number of R&D personnel in large and medium-sized pharmaceutical enterprises, and the proportion of R&D personnel in the industry was even lower. This trend has not substantially improved in recent years. The R&D personnel of 39 PhRMA member companies in the United States accounted for 72.8% of the total US R&D personnel, which means that R&D personnel have a high degree of concentration among large enterprises.

The research level of China's pharmaceutical companies is seriously low, which makes China's pharmaceutical industry a “big giant”. The reason is, I think, mainly in the following aspects:

First, the long-term lack of effective policy environment support for Chinese pharmaceutical companies. Although in developed countries such as Europe and the United States, there has been no clear concept of industrial policy, but in fact governments at all levels have various forms of support for R&D-type companies. For example, in the United States, many state governments provide tilting policies on bio-pharmaceutical companies in terms of fiscal tax, financing, and so on. In the United Kingdom, the government provides preferential policies for companies' R&D activities, including VAT exemption after product listing, and reimbursement of funds for international market development activities. Recently, I had the opportunity to contact the staff of the Scottish International Development Agency in China. I learned that the local governments in Scotland annually provide greater financial subsidies to pharmaceutical R&D companies in the region, especially small and medium-sized enterprises, to encourage them to increase technological innovation. . In contrast, although China has introduced a lot of encouraging policies, the relevant departments such as the National Development and Reform Commission and the Ministry of Science and Technology are required to provide a considerable amount of funds each year to match them. However, due to the usual practice of using pepperoni, the targeting is poor. The promotion of R&D capabilities of enterprises is not in place and it is difficult to achieve results. In addition, apart from Beijing, Shanghai, and some developed regions, many local governments do not differentiate between R&D and general production companies. R&D companies do not have special treatment in taxation, price, and expense compensation, and their enthusiasm is inhibited. In recent years, dozens of life science parks and high-tech development zones led by local governments have emerged in China. However, most of them are due to the official-oriented factors, especially their focus on face engineering, ignoring their individual development needs and the construction of public service infrastructure. Flow in form, it is difficult to form a real industrial cluster effect, just a simple accumulation of industries, on the contrary has caused unnecessary redundant construction.

The second is that the chain of production, education, and research has been severely fragmented. Unlike foreign companies, which are R&D entities, the research and development bodies of our pharmaceutical industry are research institutes and colleges and universities at all levels. Enterprises only play an auxiliary role. Due to the disconnection from the market, these research institutes that are independent of enterprises are not aware of or sensitive to the latest market demand, lack the motivation and pressure for innovation, and lack the necessary conditions for the transformation of scientific and technological achievements, as well as internal institutional reasons. Play an effective role. At the same time, related research institutes are subordinated to different government departments, and the division is more serious, resulting in the decentralization of scientific research forces, and inefficient deployment of talents, funds, and hardware equipment. The dislocation of the main body of innovation has led to a structural contradiction, that is, basic scientific research results are more than applied results, and there is a great deal of information asymmetry between companies and research institutes. Although the national "10th Five-Year Plan" and "Eleventh Five-Year Plan" have clearly stated that it is necessary to establish an effective national innovation system, the actual situation is not satisfactory.

Third, the intermediary institutions are immature. At present, there are very few platforms for the transformation of technological achievements in the pharmaceutical industry in China, and it is impossible to achieve effective transfer and grafting of good technical results at home and abroad. For R&D-based companies, a series of related specialized services such as clinical trials, registration certification, marketing consultation, and property rights transfer are very much needed. Specialized intermediary services are urgently needed. Recently, the author personally took part in a project of transferring foreign anticancer drugs to China for property rights. He deeply understood the complexity and arduousness of the work, and felt that it was necessary and important to establish a specialized intermediary service system. Sex.

Fourth, poor financing channels. In developed countries, the research and development costs of a major new molecular compound are as high as nearly one billion U.S. dollars. The investment cycle is long and the capital is consumed. If there are no smooth financing channels, it is very difficult for companies to engage in this huge project. From an international perspective, the sustainable development of biopharmaceutical companies is still supported by developed financial markets. To date, no other more reliable support has been found. In China, there are many small and medium-sized enterprises in R&D enterprises. However, because of financing difficulties, the effectiveness of R&D activities has been greatly reduced. In October last year, the listing of the GEM had brought new hope to SMEs, but it seemed to be coming too late.

Fifth, it is closely related to the seriousness of the entire enterprise's living environment. China's pharmaceutical industry has a low degree of concentration, and SMEs have a considerable number of them. These enterprises have few advantages and resources and have weak anti-risk capabilities. Although the entire industry has shown more rigid growth than other industries, few people have taken into account the difficulty of the survival of the current small and medium-sized pharmaceutical companies, such as the sharp drop in external demand caused by the international financial crisis, the pressure of RMB appreciation, the general rise in raw material prices, and labor. The implementation of the contract law, such as increased operating costs, often leads companies to choose survival between survival and development. Quick success and short-term returns have been forced to become the norm, creating a general helplessness in the industry.