While the recent news concerning China has tended to revolve around the protests in Hong Kong and the ongoing trade war/negotiation between the Asian giant and the U.S., an increasing number of healthcare AI stakeholders have been moving to take advantage of China’s plans as laid out in its ‘Made in China 2025’ program, which was released in 2015.
That’s according to a report from data and analytics company GlobalData, which notes that China, currently the second largest pharmaceutical market in the world, is ramping up investment in AI to help spur even more innovation.
Not surprisingly, no small part of China’s motivation is economic, the company notes, but the country remains hamstrung by internal challenges.
Specifically, explained Priya Nair, business fundamentals associate analyst at GlobalData, “‘Made in China 2025’ will help China detach from the stigma of being a staple in generic drug production and will help it focus more on the research and production of innovative drug entities. China is looking to promote R&D, which is stemmed from AI. However, the rise in chronic diseases from environmental pollution means that China is still heavily focused on the production of low-cost generic drugs for the larger demography.”
Despite those challenges, healthcare companies around the globe have been tapping into China’s tech sector. For example, GE Healthcare recently launched its Edison AI platform in Shanghai and announced partnerships with five software development companies to help them expand AI platforms.
According to GlobalData, a key current focus for China’s pharmaceutical sector is “machine learning algorithms, which help reduce R&D cycle times and costs. This ultimately allows companies to have a strong and sustainable drug pipeline while also increasing trial completion rates.”
Said Priya Nair, “With a simultaneous expanding technological market, it seems logical for China to increase AI investment. Pharmaceutical companies which have previously focused on their Western client bases are now focusing on China.”
At the same time, business with China’s tech sector is far from worry-free, particularly given ongoing concerns about the practice of intellectual property theft. For example, the U.S. federal government’s Committee on Foreign Investment in the United States’ (CFIUS) recently ordered patient social network PatientsLikeMe, whose majority owner is iCarbonX, a Chinese digital health company to find a new buyer, because of concerns about data sensitivity. Similarly, Momenta Pharmaceuticals deal with Chinese investors failed in 2018 reportedly over CFIUS concerns.