Sang Guowei

November 30, 2012

Dear Dr. Lechleiter, Ladies and Gentlemen, Dear Friends,

 Good morning！First, I would like to express my sincere congratulations to the 2012 International Summit for Pharma Innovation co-hosted by RDPAC, PhRMA and SINO-PhIRDA and warm welcome to the participants from the worldwide pharmaceutical industry! I am very glad to attend this summit, perform research and discussion about “Pharmaceutical Innovation” together with experts in pharmaceutical area.

 Pharmaceutical industry is a livelihood industry with high importance to people’s health. Pharmaceutical innovation is the core competitiveness and the fundamental driving force to promote the healthy and sustainable development of pharmaceutical industry. To promote medical technology innovation and accelerate the healthy and sustainable development of the pharmaceutical industry has become a global consensus.

 Chinese government has always attached great importance to scientific and technological innovation, including those in pharmaceutical areas. The government has continuously stressed the strategic significance of scientific and technological innovation to the economic and social developments of China. During the National Science and Technology Innovation Conference held in July this year, President Hu Jintao explicitly proposed a strategic task of adhering to independent innovative road with Chinese characteristics in the new era, building an innovative country. His speech gave a comprehensive plan for deepening the reform of the science and technology system, accelerating the construction of a national innovation system. He proposed to make efforts to solve outstanding problems which restrict technological innovation, optimizing innovation environment and effectiveness, strengthening the principal position of enterprises during innovation. The report of recent 18th CPC National Congress also stated clearly that "Science and technology innovation is the strategic support to improve the social productive forces and overall national strength. Thus, it must be placed in the core position within the overall national development." "To assemble the wisdom and strength of the entire society onto the innovation development." China has already clearly selected the pharmaceutical industry as one of the seven key-supported strategic emerging industries.

 Under the joint efforts by government and community, China's pharmaceutical industry has made great progress since the Reform and Opening-up more than 30 years ago. In 2011, China's pharmaceutical industry involved 6154 companies with total assets of 1.3762 trillion Yuan, featuring an annual growth of 23%. The industry had an output value of 1.5707 trillion Yuan with an annual growth of 28.5% in 2011. The pharmaceutical industrial value was added with a growth rate of 17.9% in 2011, which is higher than the overall industry growth rate by 4%.  It is estimated that during the Twelfth Five-Year period, industrial output value of Chinese pharmaceutical industry will feature an average annual growth rate of 20% with a 16% average annual growth of industrial added value.  According to the analysis report by IMS, China has become the world's second largest pharmaceutical market.

 The current macro environment of China is very favorable, in terms of the growth of the pharmaceutical market, the investment of the government in infra structure and basic research, and the availability of talent. The rapid development of Chinese pharmaceutical industry benefited from the favorable factors of innovative drug R&D and market development in China. Since the Reform and Opening-up more than 30 years ago, the sustained and stable development of Chinese economy, the improvement of national income and consumption level, the rapid formation of middle class and aging population, as well as the acceleration of urbanization process, has constituted the objective basis for the development of China's pharmaceutical market. China attaches great importance to people's livelihood with increased investment in new drug innovation, deepening Health Reform, which are the powerful driving force for pharmaceutical innovation and market expansion. Over the past five years, Chinese government published a series of important policies, listing pharmaceutical industry as one of the seven strategic emerging industries with a new growth point, encouraging pharmaceutical innovation, enhancing standards in various fields, including medical care, food and drug safety. The National Major New Drug Innovation program has been set up, which promoted R&D work of China's innovative drugs with independent intellectual property rights and high-quality generic drugs. The National Major New Drug Innovation program is set up to promote the innovation and development of the pharmaceutical industry in China. Since the launching of National Major New Drug Innovation program under the Eleventh Five Year Plan, a number of landmark achievements has been made in the field of pharmaceutical innovation in China. To my delight,  new active targeted small molecule anticancer drug Icotinib for lung cancer developed by SINO-PhIRDA member company Beta Pharma and Linagliptin developed by Eli Lilly for type 2 diabetes are both listed in the “2012 Annual report of global drug development” published by Citeline, the world's largest provider of clinical data.  China also had a number of innovative drugs with obvious characteristics entering clinical trials, independently discovered a number of promising potential drug targets. During the Eleventh Five-Year period, China's application for foreign pharmaceutical patents has an excess of 192% than originally planned, with foreign authorized patents of 125% more than originally planned. 40 new drug certificates or NDA have been granted or submitted, which means a remarkable achievement in the field of new drug innovation.

 In drug research and development work, we need to focus on the ultimate goal of drug development, which is to benefit the patients and meet the growing clinical demand. Meanwhile, we should also concern about the early detection and prevention of diseases, concern the changes in different genders, populations and racial disease spectrum, and develop corresponding prevention and control strategies, as well as drug development plan. Therefore, the focus and strategy of a nation’s drug research and development must be based on evidence-based medicine and coincide with the needs of medical service objects. With the rapid development on translational science, a close connection between laboratory researches, clinical studies, gene technology and pharmaceutical innovation has being formed for disease prevention and control. For example, the results of 11 worldwide hypertension clinical trials showed that the incidence ratio of stroke and myocardial infarction in patients with hypertension is 1.02 – 1.63 in Europe and United States, while the numbers are 5.00 and 6.65 – 13.00 in Japan and China, respectively. This study suggests that stroke is the most important complications of the hypertensive population in China. Therefore, China will not be able to completely copy the hypertension treatment program from Western countries. Instead, the stroke prevention and control strategies for patients with hypertension in China should be adjusted according to our own evidence-based medicine. A Chinese combination product “Enalapril-folic acid tablets” and H-type hypertension treatment personalized gene diagnostic reagents supported by national major new drug program will be able to better prevent and treat hypertension, and may be able to screen out high-risk patients for stroke within existing hypertensive patients, so as to carry out early prevention.

 Looking to the future, the huge demand in the market for affordable biosimilars will be considered as driving force for rapid industrial development. However, lack of the Chinese regulation on biosimilar and the difficulty of R&D and production of biosimilars, as well as its high technical requirements need pharmaceutical companies to overcome various difficulties through continuous investment and technology upgrade, so as to produce qualified products. From the view of generic drug policy, how to simplify the registration process, reduce the time and cost for R&D and clinical research, at the same time, ensuring the consistency of generic drugs for efficacy and safety, will be one of the challenges faced by governments and their drug regulatory departments.

 Looking through the trend of global drug development, the cost increase and NCE reduce of drug R&D have become an objective fact. We are facing a tough R&D productivity challenge. This suggests that blockbuster R&D mode cannot become the most important factors to lead the business development; other new strategies need to be explored. We are in great need of attention to the re-positioning of existing drugs, which is also the R&D strategy for the development of new indications of existing compounds. The re-positioning drugs may have characteristics of low risk, low cost and time-saving. For example, aspirin, on the basis of original inflammation and pain indications, was found to treat thrombosis; gemcitabine, on the basis of the original treatment of viral infections, was found to treat cancer, etc. Of course, drug re-positioning is not with no risk. However, the facts continue to prove that the drug re-positioning could be a successful strategy. At present, a large number of drugs have no chance to enter the market and are shelved as the company's assets. It is estimated that a total of more than 2000 failed drugs can be used for re-positioning, with an annual growth rate of 150-200 additional ones per year.

 During the Eleventh Five-Year period, National Major New Drug program established 704 innovative drug research and development projects, including clinical research, preclinical and drug candidate research, involving 40 class 1 drugs. A number of research projects were also established in areas of major category technical improvement, R&D technology platform construction, new drug incubator construction and key technology research, etc. At present, under the joint support and efforts from all aspects, we have successfully completed the tasks of Eleventh Five-Year, achieved the expected goals and obtained a number of landmark achievements. For example, Antofloxacin, China's first Fluoroquinolone antibiotic with independent intellectual property rights was the first class 1 chemical drug. It has an in-vivo half-life of 20 hours with better clinical efficacy and safety comparing to levofloxacin. The anti-inflammatory class 1 new drugs Imrecxib was the first domestic selective cyclooxygenase-2 (COX-2) inhibitors.  The potential drug target-CKIP-1 for treatment of osteoporosis observed a new protein with a specific regulatory feature on bone formation regulation mechanisms. It may become the target candidate for treatment of osteoporosis and establish the first nucleic acid transfer system for specific targeting osteoblast cell. The Shanghai Medicine Institution at Chinese Academy of Sciences has passed the international GLP certification by OECD. At present, we urgently need to establish the commercializing drive mechanism of innovation achievements, on the basis of government guidance and market mechanisms, creating complete biopharmaceutical industry value chain, establishing an investment chain by Angel Fund, government's early investment and research funding, venture capitals for innovative drugs, as well as mutual supports among industry giants, so as to achieve sustainable financial support and industrialization promotion. We need to strengthen the close cooperation among domestic and foreign innovative enterprises, as well as production and marketing enterprises, so as to promote innovative enterprises moving from R&D success to market success. The cost and risk of drug R&D will further promote cooperation between enterprises, especially between Chinese enterprises and multinational pharmaceutical groups. The overall objective of National Major New Drug program is to build China into a nation with strong pharmaceutical industry by 2020, so as to meet the need of our people’s health, maintaining national strategic security and social stability.

 Chinese government has always been committed to building a good policy environment beneficial for the innovation and development of pharmaceutical industry, improving national healthcare level, so that all citizens can share the fruits of development. Over the past years, China built a relatively complete pharmaceutical policy system in areas of drug registration review, drug pricing and bidding, intellectual property protection, etc., greatly guaranteeing and promoting the development of pharmaceutical industry. Currently, the policy system still has some problems and challenges to be further solved, in order to better protect the innovative enthusiasm of market players and to ensure that medical science and technology innovation can better serve the public health and benefit people's livelihood. Pharmaceutical innovation is not only the business of pharmaceutical enterprises. It also needs the industry, academic, research, medical doctors, media and government to make great efforts together. The social value of drugs should be ultimately reflected in the clinical efficacy. Translational medicine and the model based drug development will be the main mode of development of innovative drugs in the 21st century. The basic medicine and clinical medicine should always be attached together; pharmaceutical research should also meet the clinical needs. At the same time, pharmaceutical innovation should be in line with the market environment. In Health Reform, quite a number of policies have been constantly perfected during adjustments. We are pleased to see that relevant departments of Chinese government is increasingly concerned about the registration, pricing, health insurance, investment, financing and other aspects of innovative drugs. Relevant departments are working carefully to study the specific relevant policies and to promote the development of innovative drugs. We should be confident on this development trend.

 While building domestic pharmaceutical innovation environment, we should also strengthen exchange and cooperation with international colleagues. To strengthen the exchange and cooperation with global leading enterprises is an important way to improve the R&D and production standard of domestic pharmaceutical companies. As mentioned by CPC General Secretary Xi Jingping on the press conference of the new Politburo Standing Committee that "China needs to learn more about the world; while the world also needs to know more about China." I am very pleased to see that SINO-PhIRDA has done a great work in this area, and established a strategic cooperative partnership together with PhRMA. Since 2009, the two associations have successfully held Sino-U.S. Pharmaceutical Industry Summit for three years, and achieved a number of positive results with more and more wide influences. The summit built a good platform for the exchange between domestic and international pharmaceutical industries. I hope that this summit can unremittingly do so, making efforts on the width and depth, while absorbing more and wider representatives to discuss more practical and meaningful issues, such as translational medicine forum, pharmaceutical CEO forum, etc. Experts from the BRIC countries, the European pharmaceutical associations, WHO, UNICEF and other international organizations can also be invited to share their ideas and reach consensus. During the exchanges between Chinese and foreign pharmaceutical industries, the two sides should improve each other and learn from each other, further improving their ability and level.

 Dear Friends, health is one of the basic human rights, expressing the mankind's yearning for a better life, while the pharmaceutical industry is an important support to build the better life. Just as Chinese leader Xi Jinping, General Secretary of CPC, recently pointed out that "The fruits of development should more equally benefit the entire nation." Innovation and development of the pharmaceutical industry should also benefit the entire nation. Therefore, the innovation and development of pharmaceutical technology carries the historic mission for human health and happy life. The pharmaceutical innovation and R&D should always target human health as the ultimate goal. I sincerely hope that the worldwide pharmaceutical industry will make joint efforts and contributions to improve the global market environment for the pharmaceutical innovation and promote the development of global pharmaceutical innovation, improving the level of human health protection! I hope the summit a great success!