Novartis to Drop USD 1 Billion on a China R&D Facility

2009-11-05

Swiss drugmaker Novartis AG is investing $1 billion to build the largest pharmaceutical research plant in China, emphasising the importance of developing markets for future growth.

Novartis and other drugmakers are keen to tap into markets such as China as they face slowing growth and loss of exclusivity on key products, including the Swiss group's top-selling blood pressure medicine Diovan. Novartis said it was also investing $250 million in a second research and development and manufacturing facility in Changshu. (Reuters)

This story interested me mostly in what the wire report didn't cover. What I really want to know is:

1. What are they really going to do at that facility?

2. Where will it be located?

3. What kind of sweet deal will they get from the local government at that location (and how many State/national laws will those benefits violate)?

4. What is their IP management/control strategy with the new facility, particularly in light of the new Patent Law and the requirement that China innovations be patented here first?

5. For the Reuters staff: why is it that a huge investment in an R&D facility in a country automatically means that the investor is counting on that country's market for future growth? In the case of China, it is undoubtedly true, but let's face it, Novartis could have set up an R&D facility in a lot of other countries. Strange logic here — R&D is not the same thing as manufacturing.

6. I still remember everyone going crazy when GSK spent $100 million+ on its Suzhou facility (if memory serves me correctly). It wasn't that long ago. Now we're talking $1 billion for an R&D center? In addition to the gold-plated fixtures and diamond-encrusted foot pedals on the staff squat toilets, what else are they going to spend all that money on?

7. Where the hell is Changshu?

Tags: China Business & Economy, Intellectual Property