RuiPing Dong

Late last year Merck & Co. announced plans to spend US$1.5 billion to bolster research and development (R&D) in China, one of the industry's largest investments in the country to date. The firm's initial plans include, by 2014, the construction of an Asian R&D headquarters in Beijing and a doubling of their Chinese research staff count to 600 employees. Overseeing the expansion is RuiPing Dong, head of emerging markets R&D. Prior to joining Merck in 2010, Dong headed up Bristol-Myers Squibb's R&D efforts in Asia-Pacific and the emerging markets, and supervised AstraZeneca's oncology programmes. Speaking with Asher Mullard, he explains the strategy behind the Chinese R&D expansion.

What are your current R&D capabilities in China, and how do you plan to expand these?

People have the perception that Merck does not yet have R&D in China, but we actually do. Since 2005, we have had one of our three global data management centres in China. We also have our global biostatistician centre in China, and a China development group that includes regulatory, clinical, operation and pharmacovigilance groups. Overall, we have about 300 R&D staff in China.

By 2014, we plan to have 600 R&D staff. They will work in two key areas. A first focus will be on developing drugs in China for China. Historically, we have had a huge gap between when a drug launches in the United States and Europe versus when it launches in China, and so we need to accelerate our Chinese launches. For this, we will expand our regulatory, clinical research operations, project management and pharmacovigilance teams.

Second, because the environment for innovation has significantly improved in China, we wanted to grow R&D in China so that it can contribute to our global pipeline. Firstly, our researchers will focus on customizing our portfolio for Chinese patients, who have some common diseases in China that are not common in the Western countries. We want to focus on developing drugs for hepatocellular carcinoma and oesophageal cancer, for example.

What other areas do you foresee as potential growth areas for China in terms of innovative R&D?

GlaxoSmithKline has moved neuroscience to China, Lilly has moved diabetes to China, and Pfizer has moved infectious diseases to China. These three areas, as well as cardiovascular disease and vaccines, are forecast to grow in China.

Given the costs of bringing a new drug to market, can novel medicines be affordable in China?

We do have affordability and market access issues in China and in other emerging markets. Because of this, we will work to complement our innovative products with branded generics and innovative branded generics, which might have more convenient dosing or a superior pharmacokinetic profile. But, due to economic growth, we will see in the next few years a growing middle class that will demand, and be able to pay for, innovative drugs.

What lessons have you learnt from earlier expansions into Asia in terms of fostering successful innovative R&D in China?

If you look at Japan 30 years ago, every major US and European pharmaceutical company had a research facility there. But if you look now, there is little basic research anymore. They only have development facilities there. An important lesson I have learnt from this is that it is not enough to just copy what you do in the Western countries and move the same programmes to Asia. You have to ask the question: why do you believe you can do better in China than in the United States and in Europe?

For certain diseases, the answer is that you find more doctors, patients, specialists and resources in China. Not many people do basic research on gastric cancer in the United States or the United Kingdom, for example, because there is not a big unmet need there. But in China it is a top killer and so there is a lot of basic and clinical research.

A second thing that we have learnt is that we need to partner with local companies. In China, for example, we have partnered with BGI (formerly Beijing Genomics Institute), with WuXi PharmaTech and with BeiGene. We hope that through the new R&D Asia Centre we will be able to collaborate with more academic institutes in China.

Many industry watchers argue that key drivers behind the whole industry's investment in China are the need to forge ties with government to ensure market access and its supply of cheap labour. Are these fair points?

No matter where you go, you need to have good communications with local authorities to make sure that you understand local needs and that your development plan will be accepted. If you have an R&D centre that increases your presence in China, it will certainly give you more opportunities to discuss programmes with them.

With regard to cheap labour, it is one of the reasons why a lot of the companies came to China and India. But for our industry it is innovation that matters. And if you really only wanted cheap labour, there are other countries that you could go to that are even cheaper. We didn't come to China for cheap labour, we came here for its talent and ability to innovate.

Can you point to evidence of China's innovative potential?

One example we can see is from publications in first-class journals like Nature, Science and Cell. If you look over the past 10 years, you see a significant increase in the number of papers in these journals in which the first author is from China. These are not Chinese researchers studying in another country, but Chinese researchers who are working in China. This increase in publications demonstrates that there is high-quality science in China.