In its bid to dominate the global marketplace, drug maker Pfizer Inc has to bet on more than just a mega-merger with Wyeth.

Indeed, the world's largest pharmaceutical company is also busy expanding its presence in China to capitalize on the country's growing role in the world's pharmaceutical market.

According to figures from IMS Health, an international consulting services provider in the health care industry, pharmaceutical sales in China are expected to reach a compounded annual growth rate of 16.4 percent from 2004 through 2009, making the country the fast-growing market in the world.

IMS Health estimates that China will become the second-largest pharmaceuticals market worth $109.5 billion by 2020, behind only the United States.

Pfizer recently has been undertaking a series of initiatives in China to tap the expertise of Chinese academics and professionals to enhance its capabilities in the research and development (R&D) field.

Just a few weeks ago, Pfizer announced partnerships with two leading educational institutions.

Pfizer will partner with Fudan University to create a joint graduate program in clinical research.

Pfizer will partner with Shanghai Institutes for Biological Sciences to conduct drug discovery work.

"I've been tremendously impressed with the first-class talent and the quality of science in China," said Martin Mackay, president of Pfizer Global Research & Development.

"Our real challenge is disease, which is tough. The only way to really fight against it is to work in partnership, as Pfizer cannot work alone," Mackay said during an exclusive interview with China Business Weekly in Shanghai.

Apart from contributing to Pfizer's global R&D team, Pfizer's partnerships with Chinese academics and professionals are focusing on local programs targeting diseases more common in this country.

Investing in R&D

Pfizer has grown its work force at its Shanghai R&D center to 342 from the 14 hired in 2005 when the center was established.

R&D in the pharmaceutical industry is expensive and time-consuming.

Yet, even at a time when most companies are tightening their budgets to weather the economic downturn, Pfizer is maintaining its R&D commitments.

"So far, we're not scaling back our R&D budget, which allows us to work on diabetes, cardiovascular disease, infectious disease and the like," Mackay said.

Moreover, Pfizer intends to grow its investment in China, and will continue to look for more partnership with Chinese academics and Chinese companies, Mackay said.

Pfizer spent $150 million on R&D in China from 2005 through the first half of 2009.

Smoking cessation

Now Pfizer is striving for a larger share in the booming smoking-cessation market in China.

China, as the world's largest market of tobacco consumers, has more than 350 million smokers who consume about 30 percent of the world's cigarettes.

To tap into the anti-smoking market, Pfizer launched its smoking-cessation Champix product in late 2008.

Pfizer is not the only pharmaceutical maker to recognize the market potential in stop-smoking pills.

Its rivals, Swiss drug maker Novartis AG and US-based Johnson & Johnson, also introduced their quit-smoking products.

Novartis introduced Nicotineel to China in 2008, and Johnson & Johnnson introduced Nicorette to China this year.

It's estimated by Novartis that the smoking cessation market in China is valued at around 30 billion yuan.

"It's still early to comment on the outcome of Champix, but as far as I know, we don't have anything as good as Champix in the smoking cessation area so far, " Mackay said about his company's product.

Traditional medicine

Pfizer also is exploring potential opportunities in the traditional Chinese medicine (TCM) market.

"There's a place for TCM in healthcare treatment," Mackay said.

But, he added, the different philosophy of TCM versus Western-style medicine led to some early mistakes on R&D in this arena.

"We need to better understand TCM, and our work at present is still very much focused on targets and molecules, but it doesn't mean we wouldn't look for partnerships in the future," Mackay said.

Merger with Wyeth

As for the pending merger with Wyeth, Mackay said the combined company will split its research and development divisions through establishing one fully focusing on small molecules, and another on bio-therapeutics.

"With Wyeth coming in, we will expand our breadth to become a top player in small and large molecules and vaccines. So the acquisition will give us a great boost in R&D," Mackay said.

(China Daily August 10, 2009)