Big Pharma Needs New Drugs. China Has Them

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

K. Oanh Ha (0:09)

Every summer, doctors, researchers and drug executives from around the world descend on Chicago to attend an important medical conference.

Robert Langreth (0:18)

This is like the world's biggest cancer conference with 20 or 30,000 people in attendance.

K. Oanh Ha (0:23)

That's Bloomberg senior reporter Robert Langreth. He's been covering biotech and health care for 30 years.

Robert Langreth (0:29)

It's called ASCO and this is one of the biggest forums for new drug studies to come out in cancer.

K. Oanh Ha (0:35)

This year, one of the most talked about drugs came from the American pharma giant, Merck.

It already makes the world's best-selling cancer treatment, and the drug company has a new product in development that it thinks could become one of its most important cancer medicines yet. It's called SAC-TMT.

Robert Langreth (0:53)

That drug has become one of the cornerstone drugs it's testing. It's testing in 17 late-stage trials in lung cancer and breast cancer and other tumors.

K. Oanh Ha (1:03)

Merck is betting that SAC-TMT could treat a range of different types of cancer.

But there's something unusual about it. Merck didn't discover the drug. A Chinese company did.

Amber Tong (1:15)

Merck licensed SAC-TMT from a Chinese company called Tsuchuan Colon Biotech.

And this is a drug that is already approved in China. In fact, one of the reasons why Merck was so excited about it is because of all these clinical data that they already saw come out of China that they believed offered evidence that the drug does work and is safe.

K. Oanh Ha (1:40)

Amber Tong covers Asia's biopharma industry for Bloomberg. She and Robert say China has become one of the hottest places in the world for finding promising new medicines.

Novel drugs from Chinese companies now make up around a third of the development pipeline globally.

Robert Langreth (1:56)

Think of some of the big US drug companies. They're sort of like Netflix, they're kind of an insatiable need for new content. They found in recent years that China is a great place to go to to buy early stage drugs at a lower price.

K. Oanh Ha (2:11)

A lot quicker too.

Robert Langreth (2:12)

What one of the drug company executives said to reporters at one point is that they said, literally, you can go twice as fast at half the cost in China.

K. Oanh Ha (2:32)

Every week we take you inside some of the world's biggest and most powerful economies, and the markets, tycoons and businesses that drive this ever-shifting region. Today in the show, why an explosion of new drugs are being developed in China, and what this could mean for the US dominance in biotech.

Merck's experimental cancer medicine, Sac TMT, isn't the first breakthrough to come out of China. In 2024, a Chinese biopharma company called Akiso surprised the world with a new lung cancer medication. In a Chinese trial, it outperformed one of the most successful and profitable drugs on the market, Merck's Keytruda treatment. And Robert says at the Big Cancer Convention this year, the innovations Chinese biotech companies are making were front and center.

Robert Langreth (3:30)

For one of the first times a drug exclusively tested in China in a phase three trial was one of the featured presentations there. It was a drug from Summit Therapeutics that was licensed from a company in China called Akizo. And so the exploding number of drugs coming out of China was just a very big focus and topic of conversation at the conference this year.

K. Oanh Ha (3:52)

For decades, the biggest breakthroughs in medicine largely came from drug makers in the US and Europe. Chinese pharmaceutical companies were better known for making generic medicines and supplying ingredients for larger firms overseas.

But Robert and Amber say that's changing.

Robert Langreth (4:09)

The companies there historically, not too many years ago, working on generic drugs, been working on like, they call it API, active pharmaceutical ingredients, the raw chemicals that go into some of the finished products, they wait on the value chain. But China is rapidly moving up the value chain.

Amber Tong (4:25)

If we look at the whole universe of experimental drugs that are being developed around the world, depending on how you count, between a third to a half of the pipeline came from China. So there's just a lot of innovation going on, there's a lot to choose from.

K. Oanh Ha (4:41)

Amber says the biggest turning point for China's biopharma industry came in 2015

Amber Tong (4:46)

China essentially overhauled its regulatory system for drugs and aligned China's standards more closely with international standards, streamlines drug reviews and kind of enforced quality control to really level the playing field for local drug developers.