ARTICLE: "A novel prescription: A big western company moves into China, but not for the usual reasons," The Economist, 11 November 2006, p. 72.A theme I 've harped on so much it's my signature slogan for my second book: New Core sets the new rules.
Novartis sinks a $100m research facility in Shanghai, despite China not being a global center for Big Pharma R&D and a weak environment for IP protection, and Shanghai offering no costs savings as a location.
Why?
China's got a lot of rising healthcare issues, especially cancer given all that pollution and smoking, so "China offers a huge pool of subjects for study and a promising market for any resulting treatments."
The New Core is most incentivized to push newer and riskier technologies because it's facing the most change over the shortest timeframe and thus experiences the most damaging churn--along with all that wealth creation.
Locate labor where the problems are greatest.
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Comments (3)
I'm guessing there's less red-tape and liability concerns, as well.
I've thought of doing research in China for just these reasons.
Posted by Dan tdaxp | November 20, 2006 2:37 PM
My firm has done quite a bit of work with medical testing firms in China and I am convinced there is a lot more of "this" to come.
There is red tape in that China certainly has various rules that MUST be followed. But China makes a lot of sense for medical research because it has a stable and literate population and, perhaps most importantly, most are not on any medication. The costs of testing in China are generally less than in the West and, for those who use Chinese scientists/researchers/mathematicians to analyze the results, there can be substantial savings there as well.
Not to mention the benefits that can be realized simply by getting into China now.
Posted by China Law Blog | November 21, 2006 11:16 AM
It is my understanding that many Big Pharma drugs are now being produced in China. Putting a research center there, may be a correct business decision.
Posted by J Canepa | November 26, 2006 10:46 PM