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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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November 6, 2006

Chinese Med-Chem - In China, For Once

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Posted by Derek

If you're one of my industrial-research readers and you're looking for a trend to get worried about, try this one: the number of large companies that are opening med-chem research sites in China. Here's the latest example, from Novartis, and it might be the biggest yet.

There's a huge expatriate Chinese research presence in the US and Europe, and has been for many years. Recently, though, some of them have been moving back to China (or, probably, not leaving at all) because of the opportunities that have opened up there. As with other industries, it started out as we'll-do-your-worst-stuff contract work, and has picked up from there. Now we're to the point where companies can consider doing serious med-chem.

To a first approximation, I guess I'm supposed to be upset about this. But (free-trader that I am), I remember that at one point the US was the offshore research location for European firms. And as China's economy develops, those low-wage jobs that attract this kind of outsourcing won't stay so low-wage. If you're a worried US or European researcher, you pretty much have to hope for China to grow and take off to that point, or you have to root for a collapse. I vote for the former.

Another reason I'm not worried is that research isn't a zero-sum game. There are more pharma ideas to work on than anyone has time, manpower, or money to investigate - there always have been, and there will be for some time to come. Now, not all of these are going to be great ideas. Most of them are going to flop. But there's not much way of knowing which ones those are, so having a chance to put more bets down is a good thing.

"Ah, but research budgets are zero-sum", I hear some of you saying. That's a better point, but I don't see (yet) any evidence that these offshore operations are being used to substitute for current operations. As far as I can tell, they're in-addition-to, on the cheap. After all, no one's sure yet how well these things will work out, especially in these early cases, and given the state of the industry, cutting your research back hard is not a very good decision.

But yes, the competition is there, and will be increasing. As I've said here before, that means that you have to try to offer something that a company can't get in Shanghai. And sitting around wringing your hands about China (and India) instead of coming up with good ideas or improving your skills isn't going to do that.

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