Policy of endogenous development of pharmaceuticals in China: lessons for Ukraine

This article provides overview of the programs and plans, tools of scientific and technological, innovation and industry policies for new drug discovery. The authors substantiate that China has a government-led integrated approach to protecting and strengthening pharmaceutical sector. Discovered and proved the fact that the Chinese Government is encouraging R&D in the pharmaceutical sector, with special attention to the biotechnologies and is providing substantial support in the form of subsidies, tax incentives and establishment of special high-tech zones to encourage the production of new products and processes in the pharmaceutical sector. In addition to government support, there is substantial foreign direct investment in production and R&D, which entails transfer of technology and intensifies endogenous innovations in pharmaceutical manufacturing. The authors give special attention to the fact that China’s Government Procurement provides domestic price preference programme and realizes policies promoting indigenous innovation products and technology transfer. Initiatives to create human resources for pharmaceuticals industry and government aid attract foreign specialists and highly qualified Chinese migrants. Government support has raised the level of production localization, and increased employment and value added in the industry. Among the achievements attained due to the political mechanisms created in this country, are scientific and technological competencies and technology development, and high competitiveness of the domestic pharmaceutical industry, protection of intellectual property rights, access to foreign markets, import substitution and lower dependence on imported technologies, pharmaceutical intermediate goods and end-product, and high consumer quality of manufactured goods. It is proven that China’s state-led innovation and investment development model has supported growth over the last 40 years and produced numerous endogenous innovations in pharmaceutical manufacturing. The article presents the authors’ vision of the determinants of success of the Chinese government in building innovation potential of domestic pharmaceuticals industry and of the resilience of the industry in the face of crisis caused by COVID-19.