Despite China having one billion more people than the USA, healthcare spending in China equaled about 7.1% of the GDP compared to 19.7% in the US. But China is now set on improving its healthcare system by investing in the latest medicinal innovations. In 2020 alone, Chinese venture capital invested $7 billion into healthcare technology.
With this as the current context for Chinese healthcare, our new portfolio company CS Pharmaceuticals (CSP) is looking to become a trusted and respected partner for western pharmaceutical companies looking to commercialise their products in China.
Chinese market conditions and lack of access
To encourage the development of affordable and innovative medicines, the Chinese government named biotechnology as a Strategic Emerging Industry in the “Made in China 2025 Plan”. This encouraged regulatory reforms by the China Food and Drug Administration to expedite the drug approval process and add 340 drugs to China’s National Reimbursement Drug List to subsidise high priced, innovative therapies.
Changes in China’s healthcare system will bring a number of positive changes, including regulatory easement, shortened timelines, reimbursement coverage, and hospital access. CSP’s mission fits into our healthcare investment theme of Future Pharma, as China’s healthcare market seems set to rapidly grow as the government aims to align the standard of care with the West.
Established in the UK
CSP was established in the UK and has a strong presence in China (in Shanghai and Beijing). This gives the company a unique position compared to competitors typically founded in China. Partners can deal with an expert Anglo/Chinese team - fluent in English, based in the UK and with a team on the ground in China. The contracts are established under UK law, with quality and compliance standards expected in the West. With this in mind, CSP has established itself as a trusted partner for China.
This unique setup looks set to increase the likelihood of successful deal-making with Western partners. It soothes concerns about dealing directly with Chinese companies who may not share Western compliance processes, IP protection or financial transparency.
The CSP team is backed by several high-profile serial biotech entrepreneurs who have personally experienced the problem that CSP is looking to address. With their knowledge, experience and network within the relevant market, we are looking forward to seeing CSP introduce innovations and standards of care from the Western world to patients in China.
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