“It’s hard to not be impressed by the progress that has been made in China over the last few years,” he said in April.

Some Western governments have been publicly decrying the threat of “economic coercion” from China, with countries including the US scrutinising Chinese investment into its biotech centre. However, for AstraZeneca, the geopolitics of the situation is secondary to the market potential.

“When you are a global company like AstraZeneca you have always to cope with geopolitical risk and you have to try to manage that without getting too involved,” Michel Demaré, the company’s new chair, told the Financial Times. As long as there were no legal or sanctions issues, he added, “you just try to take care of your patients and try to reach the most patients you can”.

AstraZeneca is the largest overseas pharmaceutical company by sales volume in China. A large, ageing population with chronic illnesses due to environmental and lifestyle issues ensures that China is a target market for many drug makers. AstraZeneca, however, is also interested in the scientific expertise in China and the financial support available. “The innovation power has changed,” Demaré told the FT. “It is no more ‘copy, paste’. They really have the power to innovate and put all the money in. There’s a lot of start-ups and we are a part of that.”

In 2021, AstraZeneca opened a major R&D centre in Shanghai and launched a health tech incubator in Wuxi the year before that. And last month, it signed a partnership worth up to US$ 600 million (£484.5 million) with Shanghai-based LaNova Medicines for the global licence for a potential cancer drug.

“When you are a global company like AstraZeneca you have always to cope with geopolitical risk and you have to try to manage that without getting too involved”

Since Soriot took over the company a decade ago, AstraZeneca has continued to invest in research and development in China and seen its success grow. Global executive vice-president Leon Wang, who joined in 2013, has also been credited for his innovative approach and has overseen the building of thousands of centres within hospitals to deliver AstraZeneca’s Pulmicort, a drug for asthma and chronic obstructive pulmonary disease.

Soriot said that AstraZeneca’s presence in China enables it to “tap into this innovation and help those companies develop and commercialise their products globally”.

AstraZeneca is not seen as a purely foreign company in China because of the sheer number of acquisitions and partnerships with local companies, and they create incubators that support local start-ups.

The Chinese approval process for getting new medicines onto shelves has reduced significantly in recent years, and the regulatory changes regarding insurance coverage have also helped pharmaceutical companies find success in China. Moreover, AstraZeneca’s ability to operate with freedom in China without restrictions from head office has enabled it to act in many ways like a local company. And without the distraction of geopolitics, AstraZeneca is going from strength to strength.

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What is the I-Campus exactly?

I·Campus is a one-stop incubation platform for life science innovation companies. It will land, incubate, accelerate, and scale up both domestic and overseas life science companies with support from government, industry, academia, research institutes, medical institutions and capital.

Jointly managed by Wuxi Municipal Government, Wuxi National Hi-tech District and AstraZeneca, the I·Campus plans to leverage AstraZeneca’s global network, its strong relationship with local government, and its commercial platform.

AstraZeneca has always been dedicated to building an open, collaborative, and international innovation ecosystem to promote patient-centric innovations. On April 28 this year, we welcomed 10 innovative domestic and overseas companies to move in and start business operations in I·Campus.

I·Campus will provide domestic and overseas market insights, product concept validation, cooperation opportunities for commercial innovations, licensing, co-promotion, and contracted sales through AstraZeneca’s end-to-end commercial platform.

It will also facilitate these incubator companies’ international expansion by using AstraZeneca’s global network to support Chinese companies to go abroad and international companies to enter the Chinese market.

The companies at I·Campus will also have access to investment from the billion-dollar Global Healthcare Industrial Fund co-founded by AstraZeneca, China International Capital Corporation and other capital partners.

I·Campus has five strategic partners, ten AstraZeneca overseas joint innovation centres, 17 resident companies, and expects to host over 50 innovative enterprises within the next three years.

The long term plan is for I·Campus, along with China Healthcare IoT Innovation Center, and the Healthcare Industrial Fund, to create a huge engine, promoting healthcare sharing and connectivity in both China and globally.

The I-Campus promotes patient-centric innovations

How has the pharma and medical supplies business changed in China in recent years?

The Chinese government has been using a systematic approach to resolve the huge demand for better healthcare service and is taking steps towards its goal of providing people with access to affordable modern healthcare services.

For example, in recent years, China’s central government has announced a series of healthcare reforms to establish a basic, universal healthcare system that can provide safe, effective, convenient and low-cost health services. The reform affects most facets of healthcare delivery, including health insurance, primary care, hospital management, medications and public health.

Policies released by the government have removed hurdles to allow new medicines and the benefits of health innovations to reach more Chinese patients faster. The Chinese government is also taking effective measures to improve the speed of new drug approval. For example, establishing a ‘green channel’ for innovative drugs, and accelerating the review for urgently needed drugs. This will help global pharmaceutical companies to significantly shorten the time-to-market interval of innovative drugs at home and abroad to better meet clinical needs and drug accessibility.

What has become easier, harder or not changed as you might have hoped or expected?

In the past few years, the investment environment in China has been increasingly open, and the business environment in China is improving. These changes provide multinational companies with vast space for their development in China. AstraZeneca entered China in 1993, and now China has become AstraZeneca’s second-largest market in the world.

The continuous growth of AstraZeneca’s business in China benefits from the Chinese government’s on-going opening-up policy, optimisation of the business environment, and protection of foreign investment in China. All these have helped us better serve Chinese patients with innovative drugs and solutions and realise better business growth.

China has made significant achievements in improving people’s life and health during the past years in various aspects. Take the ‘Healthy China 2030’ Initiative for example. There have been major reforms going on in the industry during the past years as the government has sought ways to increase the fairness, affordability and accessibility of medical and healthcare services for its people, and encouraged companies to provide better products and services as well.

Companies at I·Campus will also have access to investment from the billion-dollar Global Healthcare Industrial Fund

The recent Covid-19 virus will certainly shift the nature of healthcare in China. What major changes can we expect going forward?              

This unique period that has affected every country on earth so badly, requires international cooperation in the field of life sciences, and the quick development of digital technology to enable further collaboration across sectors.

The growing demands on the healthcare industry have provided new opportunities in digital healthcare, industrial integration and internationalisation.

We’ve already seen a trend in China to accelerate the transformation of the healthcare industry by focusing on holistic disease management supported by smart healthcare.

The epidemic will certainly accelerate this transformation and the Chinese government has put an emphasis on online medical care, especially for chronic disease management. I believe the evolving connections between healthcare and cutting-edge technologies such as big data, AI and IoT, will make more innovative practices in healthcare a reality.

Will this provide new opportunities for AstraZeneca and others in this field?

The growing healthcare demand brought by the epidemic is sure to bring further opportunities for the healthcare industry as a whole. And as a truly local MNC here in China, AstraZeneca will seize the opportunity to benefit more patients in China and worldwide.

For the increasing need for smart healthcare, we are expanding cooperations regarding digitalised promotion, retail pharmacy marketing, as well as collaborations with internet healthcare platforms and e-commerce platforms to guarantee drug supply and holistic disease management for our patients.

We have partnered with cross-sector forces to promote online pharmaceutical retail, hospital appointment registration, online diagnosis and prescription. These practices can guarantee the accessibility of drugs to our patients, but at the same time prevent them from the risk of getting cross-infected while they are at the hospital.

We also believe that people will now be more willing to embrace big data, 5G, AI and IoT as well as other new-generation technologies, which will provide opportunities for life science innovation here in China. AstraZeneca has also joined the efforts in accelerating innovations in those areas – hoping to contribute to the upgrading of healthcare services in China and facilitating to the realisation of “Healthy China 2030”.

Inside the I-Campus incubator

One of the challenges facing British businesses in this industry is the length of time it takes to get product registration. Is this something that you have encountered and has the virus led to new legislation that might speed this up?

The Chinese government has been optimising and speeding up the approval process for imported drugs and new drugs by creating a green channel for first-class innovative drugs and accelerating the evaluation on urgently-needed drugs for patients, thus enabling Chinese patients to use the world’s leading innovative drugs as soon as possible.

For AstraZeneca, our innovative oncology drug, Tagrisso, was approved within only seven months in 2017. Last year, Roxadustat, China’s ‘global first’ innovative drug treating patients with renal anaemia, was also approved by the NMPA through priority review. As we’ve seen Chinese government efforts in bringing in global innovative drugs for Chinese patients more quickly, we are expecting another 55 approvals for new drugs and new indications in the near future.

Intellectual Property and forced technology transfer is also still a concern in this sector. How do you negotiate these challenges with the government, local partners and so on, and how do you protect your business?

Actually, we have witnessed the improvement of Innovation and IP protection having been encouraged by the Chinese government. In recent years the Chinese government has released several policies regarding strengthening the protection on intellectual property to encourage innovation.

We are encouraged by the government’s innovation-driven development strategy and believe that a continued focus on IP protection will only encourage more investment, collaboration and ultimately benefit patients and society. Adhering to our patient-centric core value, AstraZeneca is committed to accelerating the introduction of our pioneering medicines into China. We will are also dedicated to improving China’s R&D capabilities and introducing innovative medicines developed by our partners from China and overseas.

Michael Lai began his career as a medical doctor in the US, and then as a management consultant serving at the Boston Consulting Group in Shanghai. In 2010 he joined Sanofi to become Head of Strategic Planning for Asia, where he led the development of the “Next Billion Consumers” country market strategy. He subsequently went on to become the Head of Biosurgery BU and VP of Oncology BU. Prior to joining AstraZeneca China as VP, Head of Cardiovascular, Renal and Metabolic Diseases (CVRM) Business Unit in June 2017, he was VP of Sanofi China’s Diabetes BU. Michael holds a Doctor of Medicine (M.D.) from the University of California, San Francisco, a Master of Public Health from the University of California, Berkeley and a Bachelor of Art in Biological Sciences from Harvard University.

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We are always learning as China is rapidly evolving. As new challenges and opportunities continually drive AstraZeneca’s objective to reshape healthcare in China, one important aspect we have learned is to lead change in tandem with our partners.

While we continue to focus on understanding and tackling the critical unmet health needs in China, recent positive changes in the regulatory environment have likewise enabled accelerated review of new medicines that address these needs. One such example is Tagrisso (osimertinib), a new medicine for patients with lung cancer that is available today in 75 countries worldwide. It was the first new medicine to be approved through China’s new Priority Review Pathway and is a great example of how the Chinese Government is improving access to key treatments for patients in China.

Today we are the second-largest MNC in the Chinese pharmaceutical sector, with more than USD $750 million invested in extensive research and development (R&D), manufacturing and commercial operations networks. Our commitment to be in “in China for China” has continued since entering the country 25 years ago in 1993, and we’re still learning and evolving in how we deliver on that commitment for patients and in partnership with local Government.

An ageing population and rising income levels have seen China’s healthcare industry grown rapidly, how has this influenced your China strategy?

There are significant unmet health needs in China, within a large and ageing population with increasing affluence and demand for quality healthcare. AstraZeneca has paid close attention to aligning with and supporting key government strategies in China, and therefore the Healthy China 2030 policy (establishing health as a national priority with the need for innovative solutions to increase patient access to healthcare), and the Made in China 2025 policy (representing China’s efforts to develop a modern, innovative economy) have significantly influenced our strategy – innovation, expansion and partnership to address China’s unmet medical needs. AstraZeneca will continue to invest in developing its business as part of China’s pharmaceutical industry ecosystem.

You have a major R&D centre in Shanghai, what made you choose China as a location?

As part of AstraZeneca’s global business strategy, we have increased our proximity to bioscience clusters by co-locating skills, knowledge and capabilities around three strategic R&D centres in Sweden, the UK, and the USA, as well as laboratories in California, Boston, Osaka, and Shanghai. Our strategic choice of China as a location for a major R&D centre allows us to both contribute to the development of China’s local pharmaceutical innovation ecosystem and to deliver medicines that address unmet medical needs more effectively and efficiently. We are currently developing several innovative molecules locally that have the potential to be approved in China before any other market globally.

How important is the China region to your global growth strategy?

We continue to see strong sales growth in China and we expect this trend to continue with innovative medicines playing a key role in future growth. The economy is moving more to one based on innovation. The Government is working hard to facilitate and accelerate the approval of new medicines. And China is fast becoming integrated into the global network for regulatory approval and the development of new pharmaceutical products.

Added to this, our product portfolio and pipeline investments aim to help address the critical unmet health needs in China, plus a hugely talented local team and significant presence with capabilities across the value chain. We are also encouraged by the Government’s strong commitment to improving access to innovative medicines for patients in China, while the China FDA continues to improve processes and support bringing new medicines to the market. It is very encouraging across the board for AstraZeneca in China.

Which partners are you working within China and how have you found them?

Through our “in China for China” strategy we are committed to working with the Chinese government at municipal, provincial and national levels to realise our ambitious and shared agenda, to which end AstraZeneca has made every effort to build local partnerships. We are encouraged by recent policy developments including accelerating the innovative drug review and approval process to facilitate faster patient access to medicines, and implementing a pilot on reimbursement negotiation to increase the affordability of innovative medicines.

We also work closely with provincial and municipal government partners, which include Shanghai and Pudong, which support AstraZeneca’s headquarters and new drug discovery centre. In Jiangsu Province, we work with Nanjing, Wuxi, and Taizhou on innovative R&D centres, manufacturing sites, and new scientific partnerships. With support from the Wuxi Government, in 2017, we established an innovative joint venture with the State Development Investment Corporation, which will enable us to accelerate R&D in China and more effectively deliver medicines to local patients. A collaboration with FibroGen will hopefully allow us to deliver roxadustat, an innovative medicine for patients with anaemia in chronic kidney disease, first in China.

There are significant unmet health needs in China, within a large and ageing population with increasing affluence and demand for quality healthcare

With Tencent, we’re looking at security and addressing counterfeiting by tracking medicines at the patient level through a pilot that will run in the next 12-18 months. With Alibaba, we have started work in diabetes, delivering customised messages to patients. Ultimately to change how patients are treated for the better and ensure product supply is secure.

What are the key things to be aware of when working in China?

The significant opportunities for partnership and the integration of updated processes, in particular where driven by new technologies. We continue to learn how digital health technologies can help to create new future for patients in China, evidenced by our strategic digital partnership with the government to develop “Internet of Things” (IOT)-based healthcare solutions. This is one example of how AstraZeneca can help to advance ideas and processes sustainably, which is possible as we have built the right culture.

We also welcome the commitment made by government to support the protection of intellectual property, which is fundamental for the industry. It means China is a good place to do innovation and to invest in healthcare.

You are attending this month’s Oncology Congress. Can you tell us about your role at the Congress?

It presents an excellent opportunity for AstraZeneca to join with academic and industry experts from the UK and China to tackle the global challenge posed by cancer. Premier Li’s recent announcement of reduction of tariffs on imported anti-cancer drugs to zero, a follow-up to his original comments on this matter at the Two Sessions in March of this year, represents China’s commitment to increasing the supply of cancer drugs for patients. AstraZeneca is encouraged by these developments and believe events such as the China UK Oncology Congress represent important events to collaborate with all stakeholders to help China in its fight against cancer.

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