BY JACK DINI – Pfizer may be the first American company to respond to China’s demand that they move their R&D to China in order to do business with the Chinese government. The company announced early in February that it will shutter US and British labs and move its antibiotic research program to new facilities in Shanghai. About twenty-five percent of Pfizer’s scientists will be let go in the process. (1)

Industry analysts say Pfizer’s actions would be the first wholesale move of a major US pharmaceutical research unit to China. Previously, US firms had relied on China mostly for support functions rather than high-level discovery work. (2) However, with Big Pharma determined to seize any possible savings it can find in research and the entire industry focused on emerging markets, it probably will not be the last such relocation.

One benefit could be that placing a major research unit in Shanghai would garner favor from Chinese officials, giving Pfizer more ready access to the huge potential drug market in China. The move could also be a way to skirt the strict regulatory guidelines of the FDA. (2) And speaking about the FDA, the American Council on Science and Health (ACSH) suggests that it is important not to blame Pfizer for the decision.

Dr. Elizabeth Whelan asks, “Why are we being angry at those who are the victims of too much regulation and litigation?” The dismantling of American pharma repeats the pattern we saw in Europe in the 1980s and 90s. Dr. Gilbert Ross of ACSH notes, “Pharmaceutical research was an enormous business, but it was driven by EU over-regulations to the US where it’s now a huge source of jobs. And due to the rise in our own regulatory burden and windfall-oriented plaintiffs bar, research is rapidly moving to Asia. But it won’t just be jobs we’ll be losing. Life-saving drugs will take longer to create.” (1)

Still reeling over the public health threat posed by tainted Heparin imported from China in 2008, in which 140 people died, the FDA’s acting Principal Deputy Commissioner Dr. John Taylor announced recently that the agency is unprepared to handle similar threats from imported food and drugs. Dr. Taylor believes that without major FDA reforms, similar events will probably occur again. Currently, 40 percent of the drugs consumed in the US and 80 percent of their ingredients come from other countries, while food imports have been increasing by ten percent each year for the past seven years. The irony of the FDA’s warning in light of the agency’s increasing trend towards more stringent pharmaceutical regulations is that the FDA appears to be complaining about drug manufacturers moving overseas, yet they were the ones who, in part, drove them there, and now they want the help of the pharmaceutical companies. (3)

ACSH’s Dr. Josh Bloom says that with the Pfizer change, there will be a significant loss of skill and knowledge. “Doing research aimed at developing new antibiotics isn’t like making a toaster,” he says. “It’s art and science. There’s a lot involved in just getting the bugs to grow, let alone in finding new drugs to stop them. This will stall their antibiotic program, probably for years.” (1)

So the question to be answered is, does China have the smarts needed for developing new drugs? Lawrence Solomon provides some insight into China’s scientific success. “In the last century, China has won only one Nobel Prize, tying it with nations such as Burma, Ghana, Mauritania and Nigeria. Even China’s one Nobel, a peace prize awarded last year, went to a dissident, imprisoned for his desire for democracy for China. Ethnic Chinese  outside mainland China who are exposed to more independent thought do win Nobels—10 in all over the last century—but even here the numbers do not stand out. Americans, in contrast, have claim to more than 300 Nobel prizes, by far the greatest number by country. Patents are another measure of innovation.

While China has been applying for patents at an increasing rate, it nevertheless logs relatively few in foreign countries into which it sells its technology. Only two Chinese firms appear in the World Intellectual Property Indicators lists of the top 50 companies applying for patents in 2009, and no Chinese academic institutions appear in the top 50.” (4)

By contrast, Chemistry World recently reported that China ranks second in publication of biomedical research articles. (5) So perhaps Pfizer will not have to move many of its staff to Shanghai. Regardless, once again the US loses another piece of its technology base.

Lastly, let’s look at how China has operated in the past. In many cases, including desktop computers, solar panels and wind technology, Chinese companies acquire the latest Western technology by various means and then take advantage of government policies to become the world’s dominant low-cost supplier. (6) Is Big Pharma next on the list?

On a recent trip from Chicago to Cleveland, I passed numerous abandoned steel mills and other manufacturing plants in the Gary, Indiana area. In one place a casino was the new ‘industry’ on the block. As we send more and more of our manufacturing and now science jobs to China where will the future jobs come from? In spite of all the rhetoric about ‘green jobs’ these are still an elusive dream. Are we destined to become a nation where the only jobs will include working for the government at national, state or local levels? If so, we are on a serious downward spiral.

References

1.”Pfizer shifts research to China: Is anyone to blame?” American Council on Science and Health, February 8, 2011

2. “Pfizer to gradually move antibacterials operations to China,” centerwatch.com, March 16, 2011

3. “FDA unfit to handle problem it helped create: Tainted drugs from overseas,” American Council on Science and Health, March 16, 2011

4. Lawrence Solomon, “The failure of Chinese mothering,” Financial Post, January 14, 2011

5. Rebecca Trager, “America’s scientific lead remains on the brink,” Chemistry World, September 27, 2010

6. Keith Bradsher, “To Conquer Wind Power, China Writes the Rules,’ The New York Times, December 14, 2010

Comments

comments