Skip to content

Lack of Capital Investment Makes Development of New Drugs Difficult

Science and Technology Daily published an article on the challenges that China faces in new drug research and development. The long development cycle, the high investment that is required, and the high failure rate are cited as the three major points of difficulty in the development of new drugs, especially in clinical trials. The article reported that the lack of a long-term investment mechanism, especially the imperfection of the capital market, has made the research and development as well as the marketing of new drugs problematic. Most of the small and medium-sized pharmaceutical companies rely on self-raised funds for R&D. The R&D investment accounts for 4 to 8 percent of the total sales while some investments could be as high or higher than 20 percent. Also, pharmaceutical companies are reluctant to invest due to the imperfect intellectual property protection system. Investors fear either the high risks or the lack of focus in new drug research and development.

The article stated that fundamentally solving the difficulties in the research and development of new drugs in China requires the progress and maturation of China’s pharmaceutical industry at all levels, including the improvement of the company’s own research and development capabilities, the improvement of the regulatory system, a real understanding of the long-term, high-risk new drug development, and long-term capital market support.

Source: Science and Technology Daily, October 29, 2018