Chinese contract manufacturing organizations (CMOs) are increasing in number. Nearly half of...

Chinese contract manufacturing organizations (CMOs) are increasing in number. Nearly half of China's pharmaceutical factories are not being used, and factory owners are taking advantage of this unused capacity. China's manufacturing costs are lower and it has a well-trained, less expensive workforce.

However, CMO development is proceeding slowly. Until 1999, pharmaceutical contract manufacturing was considered illegal The government has since been slowly allowing more types of drugs to be produced. At present, only vaccines, blood products and Chinese herbal injections cannot be manufactured under contract with other nations. As of 2004, all of the drug manufacturers in China are in adherence with GMP regulations following a combined investment of 150 billion RMB ($18.75 billion). The FDA has given cGMP approval to 130 Chinese CMOs, and 50 GMOs have obtained more than 90 Certificates of Suitability from the European Directorate of the Quality of Medicines. Out of the 458 billion RMB ($56.5 billion) generated by the Chinese pharmaceutical industry in 2004, an estimated 13% came from the CMOs. Most of the contract work is for the production of bulk and crude drugs--in 2005, crude drug exports from China reached $7.9 billion--and a few Chinese manufacturers are moving Into finished drugs and biopharmaceuticals.

Source: Contract Pharma