AstraZeneca is to invest £127m in a new Chinese factory as the pharmaceutical maker increases its stake in the fast-growing market.
The site represents AstraZeneca’s largest investment in a single manufacturing facility globally. It will make both intravenous and oral solid medicines for the company’s China business and will help AstraZeneca meet growing demand for its products in the country.
With its burgeoning middle class and increasing government investment in improving healthcare, China’s pharmaceutical market has grown from $10bn to 2004 to $41bn in 2010 and, according to research group, IMS, is expected to grow to more than $100bn by 2015.
As a result, China is one of the most important battlegrounds for drug companies, which are facing pricing pressure and increased competition from cheaper generics in Western markets.
AstraZeneca itself is facing a steep “patent cliff”, as patents expire on some of its established brands, paving the way for generic rivals. Britain’s second-biggest drug maker has therefore focused on increasing sales in emerging markets, and aims to generate a quarter of its sales in these countries by 2014.
AstraZeneca first established a presence in China in 1993 and its sites include a manufacturing and supply facility at Wuxi in Jiangsu province and a research centre in Shanghai. Last year, AstraZeneca’s turnover in China was more than $1bn.