Can CMOs Solve China’s Biopharma Staffing Shortages?

The past decade has witnessed robust growth in China’s biopharma industry due to rise in gross domestic product (GDP), expansion of China’s middle class, greater coverage of the national healthcare, as well as a rapidly aging population and massive urbanization. In 2014, the market was approximately US$5.0 billion, projected to be the second largest biologics market globally by 2020 (1). This represents a compound annual growth rate (CAGR) of approximately 20%.

Although the past couple years have shown signs of a cooling domestic economy, China’s biopharma industry has remained strong, as manufacturers both domestic and abroad make long-term investments. BioPlan Associates’ study of domestic Chinese bioprocessing capacity shows that both domestic Chinese and multinational pharma investments have dramatically grown since 2008 (2).

Analysis of the largest facilities indicate growth in both liters capacity and staffing for production of biologics. In addition, global companies continue to invest in construction of biomanufacturing facilities. Boehringer Ingelheim’s contract manufacturing facility in Shanghai and Pfizer’s biologics center in Hangzhou (3) are two prominent examples. Many more domestic companies, however, are moving in the same direction. Many of the established biologics makers, including China National Biotech Group Company, the biggest vaccine maker in China, are expanding and upgrading their existing biomanufacturing facilities. The group is also supporting one of its subsidiaries, the Chengdu Institute of Biological Products Co., Ltd., to become the first in China to get World Health Organization (WHO) prequalification with a patented Japanese Encephalitis vaccine. Newcomers in the biopharma industry also broke ground for new bio-manufacturing facilities. Teruisi Pharma, for example, is building its 24,000-L antibody manufacturing facility, and WuXi Biologics began construction on a new $150-million biologics manufacturing facility. When complete, this new facility will be the largest mammalian cell-culture manufacturing facility using disposable bioreactors in the world. This makes the facility the largest biomanufacturing facility of any kind in China. In addition, several Chinese biologics facilities are under active construction.

The growth in market size also requires a more innovative biologics pipeline. According to data from China’s regulatory authorities, as of February 2017, China had 171 monoclonal antibody (mAb) therapeutics under clinical development, from 82 biologics manufacturers. In 2016 alone, 32 new projects entered clinical trials (3). Though China started commercialization of antibody drugs relatively late compared with the United States and Europe, and currently has only granted a new drug application (NDA) to fewer than 10 ‘made-in-China’ mAb therapeutics, more launches are expected in the next few years.

Staffing challenges

Over the past decade, China has been fixing problems related to funding, pipeline development, quality management, and facility upgrades. But what’s more difficult to fix is the looming shortage of talented staff to support the increase in capacity and quality production. This is likely to become a real bottleneck, as domestic biomanufacturers move ahead and target international, more regulated markets.

And, capturing market share internationally is clearly something Chinese manufacturers expect to be doing over the next decade (4). In a BioPlan Associates’ study, nearly 90% of responding Chinese biologics managers indicated their company currently plans to target global distribution of GMP-produced biologics within 10 years. Further, nearly half of respondents indicated the need for more ‘scientific/technical expertise’ to succeed (4).

In another recent analysis of training in China, BioPlan interviewed more than a dozen experts and high-level biopharma industry managers in China. Many industry insiders lament that current degree programs from academic organizations in China are relatively out of touch with industry and are not designed to meet the evolving demands of biomanufacturers. 

While multiple bioprocessing vendors (including GE, Sartorius, and Pall) currently offer product training seminars, many core bioprocessing staff regard these as too general, or not comprehensive enough to meet their operational training needs. Vendor courses may also not fit systems provided by competitors. Those who need training most are new/entry level staff in bioprocessing; yet due to high turnover rates in China, many companies are reluctant to make investment in training. As in the US/EU, many companies must rely on existing experienced staff to train entry level new staff. But industry insiders agree that such real expertise in bioprocessing-those capable of training new core staff-can only be found in the EU/US or in returnee scientists.

Some companies are hiring consultants overseas to give training courses, and others have developed internal courses to meet needs. Manufacturers find quality control (QC) and formulation to be two specific areas where in-depth training is needed the most, and they are willing to make investments. Currently, there are training companies offering courses in drug formulation, QC, etc. Others are considering sending staff to US universities.
 

Overcoming talent shortages in China

With almost 100 Chinese companies developing mAb therapeutics at some stage, training staff and attracting returnee scientists to enable efficient, GMP-grade biomanufacturing in the near future may be just too challenging for some smaller and early-stage biotechs. A short-term alternative may be to avoid building biomanufacturing facilities, and training internal bioprocessing teams. Outsourcing manufacturing to contract manufacturing organizations (CMOs) may be the only option for some. China is already home to several technically advanced CMOs, such as JHL Biotech, WuXi Biologics, and Boehringer Ingelheim in Shanghai. Each has in-depth technological know-how in biomanufacturing and a team of bio-processing professionals with industry experience from Western countries. JHL Biotech, which kicked off operation in 2016, has already entered agreements with BeiGene, Ltd. for a new biologic. The company also announced a strategic alliance with Sanofi to collaborate on the commercialization of biologics in China. In 2016, Zai Lab of Shanghai and Boehringer Ingelheim (BI) also signed a cooperation agreement under which BI will provide manufacturing services in its Shanghai facility for a mAb from Zai. 

China is currently reforming its rather restrictive CMO regulatory environment with a pilot program in Market Authorization Holder (MAH) in certain provinces, to allow a drug developer to outsource manufacturing to a CMO. These changes are likely to expand in the future.

Although recent regulatory reforms have opened the door for CMO operations, many domestic biomanufacturers plan to build internal manufacturing capability. To staff such facilities, employers are actively seeking standardized programs applicable across multiple systems and multiple vendors; for both entry level and core staff.  Potentially a supplier/industry association collaboration from Sino-US joint education programs to develop certificate programs in bioprocessing to address current and future needs.

Hiring difficulties in China vs. US/EU

There are no significant differences in the challenges faced by US/EU facilities and their Chinese counterparts in terms of staffing challenges (2). Of the 222 qualified global industry executives, over a third cannot fill upstream or downstream process development positions (5). The magnitude of the problem is likely to be even greater in China as facilities rapidly expand (see Figure 1).

Figure 1: Areas where hiring difficulties exist in biopharmaceutical operations (Selected areas). (Figure coutresy of author)

This ongoing hiring challenge will further confound the growth of manufacturing capacity to levels needed to support China’s domestic manufacturing. The industry can expect a capacity crunch due to hiring challenges as more biologics facilities compete for a limited pool of staff talent. While CMOs and others will likely alleviate some of this demand, manufacturing capacity may be at a premium in coming years, as available staff keep busy.

References 

1. IMS Health, IMS Projection of Biologics Market, accessed 2014.
2. BioPlan Associates, Top 60 Biopharmaceutical Facilities in China (BioPlan Associates, Inc., Rockville, MD, March 2017).
3. Biologics Industry, mAb therapeutics under development in 2017, original data from Center for Drug Evaluation, CFDA.
4. BioPlan Associates, “China’s Advances in Global Biopharma and Bioprocessing: A 10-year projection in need for innovation and quality improvements, January 2017,” White Paper Survey of 50 Chinese Biopharmaceutical Executives 
(BioPlan Associates, Inc. Rockville MD), www.bioplanassociates.com.
5. BioPlan Associates, 13th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production (BioPlan Associates, Inc., April 2016), 
www.bioplanassociates.com