Biopharma projects will receive billions. Credit: c40/ZUMA Press/Newscom

The Chinese government is pouring an estimated 16 billion yuan ($2.4 billion) to shore up drug development while introducing policies to promote the biotech sector. The new policies—designed to boost seven emerging strategic industries, from sustainable energies to biotech—came under a resolution issued by the State Council, China's cabinet, on September 8. China's key new drug R&D scheme was launched in 2009. In its first stage, which will last until 2011, central government will invest nearly 6 billion yuan ($882.5 million) to support more than 900 drug development projects as well as several innovative technology platforms. This is followed by a second stage, running from 2011 to 2015, with an expected 10 billion yuan ($1.47 billion). The biopharma sector is expected to be one of the main beneficiaries of this funding push, although the government's recent announcement did not provide a breakdown of the investments. Central government plans to couple this financial support with moves to strengthen intellectual property protection, and promote favorable taxation and lending policies. Zailin Yu, chairman and CEO of Tianjin-based protein drug developer SinoBiotech, who is funded by the scheme, says there is no preference for biologics or chemical drugs, as long as the proposals are strong. Mingde Yu, president of China Pharmaceutical Enterprise Management Association, in Beijing, says Chinese firms are unlikely to develop original chemical compounds, and he believes the opportunities lie in developing biotech drugs. But despite this strong governmental support, biopharma researchers complain the money is spread thin among hundreds of projects. The promised funding also arrives late, takes a long time to reach scientists and is too tightly regulated, leaving researchers little flexibility to modify their research plans. In addition, most contract research organizations (CROs) and large international pharma with facilities in China are not invited to participate in the scheme, despite their expertise manufacturing to international standards. “In China, most of the huge government support goes to academics who lack industrial experience and to state-owned pharmaceuticals because of the gap between the public institutions and privately and foreign-owned industries. This is a big loss to innovative drug development,” says Shoufu Lu, founder and CEO of Shanghai's Zhangjiang-based startup Aqbio Pharma. “We CROs charge more, so academics do not accept us. But we are happy to cut our prices in order to be involved in the State-funded projects as long as there is mutual understanding between academics and us,” says the CEO of a leading CRO in Shanghai's Zhangjiang, who requested anonymity.