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In 2002, when German pharmaceutical firm Boehringer Ingelheim decided to set up its first factory in China, Shanghai's Pudong District was its top choice because of the ready availability of land. The firm now has two manufacturing sites, two labs, and one research center in Pudong. But when Yin Xuelin first came here, there was almost nothing.
Zhangjiang Drugs Valley, on the outskirts of Shanghai, is now home to more than 600 pharmaceutical firms. As of the end of last year, they made a total of more than 72 billion yuan. About 66 percent of Pudong's total revenue came from the medical industry. A new sub-district dedicated to biopharmaceutical products alone is targeted to reach 20 billion yuan in value by 2025.
"At the time, the only foreign drug makers here were Roche and us. It was nearly empty. I still remember the metro station was just set by the road, and it was the terminal on the line. When you got off the station there was no one else around," said Yin Xuelin, vice president of Human Pharma Supply China and general manager of Boehringer Ingelheim Shanghai Pharmaceutical Co., Ltd.
Boehringer Ingelheim is one of the earliest companies to set up its China headquarters in Pudong. Zhangjiang Hi-Tech Park was established in 1992, and two years later, a special pharmaceutical area became part of that. Between the late 1990s and early 2000s, a number of drug makers moved in – Roche and Pfizer. Boehringer Ingelheim got its first license for a factory to produce medicines for human use in 2001, but getting that approval was not easy.
"There were still many restrictions at that time, not like now. We had to run through a dozen departments to get just one approval, and many departments needed to review our construction plans," Yin illustrated.
The license in hand meant production was on track. But the company was limited to producing only chemical-based drugs and – importantly – only chemical drugs that the firm itself had developed. China's legislation at the time allowed pharma firms to produce only drugs that they themselves had developed. And that's when Boehringer Ingelheim came up with a new idea.
The idea arrived in 2013 when Luo Jiali, who had nearly 20 years of experience in the medical industry domestically and overseas, joined Boehringer Ingelheim to help set up a new factory in Zhangjiang. And at just that time it was becoming obvious that the old legislation was increasingly unsuitable for the rapid development of Zhangjiang Hi-Tech Park, as more medical firms settled in the area.
"Zhangjiang's strength was on initial RD, but the weakness was on the production side – moving inventions from scientists' offices to the market. When I came here, Zhangjiang was nearly empty in this area. It wasn't balanced. The products being developed needed a manufacturing site. That was the business opportunity," said Luo Jiali, the head of Biopharm CMO Business of Boehringer Ingelheim China.
Luo knew it wouldn't be easy, but beginning in 2013, the huge business opportunity convinced him and his team to begin a lengthy series of trips and meetings with district-level officials and even to meetings with national regulators.
"There was no previous legislative experience to follow in China. And there was the fact that Chinese drug manufacturers had quality problems. Whether the new business model could ensure drug quality was fit for human consumption was an unavoidable issue. We weren't convinced ourselves, but we knew the governments in Shanghai and Pudong wanted to make the changes," Luo further elaborated.
But finally, Luo succeeded. In 2019, after six years of effort, China's new drug administration law took effect, allowing contractual production for the China market. Boehringer Ingelheim's first drug produced on trial for domestic firm BeiGene was already on the market by then. Another domestic drug maker, Wuxi Apptec, soon followed.
Yin Xuelin, who has spent two decades in Pudong, says developments like this were beyond imagining when he first came. But he still remembers what the firm's China CEO said at Boehringer Ingelheim's opening ceremony 20 years ago.
"Our China CEO said to government officials that he hoped the firm would grow as fast as Pudong, because Pudong was growing very fast," Yin added.
2020 marks the 30th anniversary of the establishment of Shanghai's Pudong District. The pharmaceutical sector is one of Pudong's pillar industries and has experienced significant change over the past three decades. Boehringer Ingelheim, one of the world's 20 leading pharmaceutical companies, regards Zhangjiang Drugs Valley as the region's engine of the pharmaceutical sector's growth over the decades.
