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JANSSEN/CHINA JOINT VENTURE PRODUCTION WILL FOCUS ON ANTIFUNGALS

Executive Summary

JANSSEN/CHINA JOINT VENTURE PRODUCTION WILL FOCUS ON ANTIFUNGALS, antiparasitics and anesthetics, according to an agreement signed April 19. The agreement calls for a total of 34 Janssen products to be manufactured in the People's Republic of China by the joint venture, Xian-Janssen Pharmaceutical Ltd. Along with antifungals, including ketoconazole and miconazole, and the antiparasitic, mebendazole, drugs to be produced include antipsychotics, antiallergenics, gastrointestinal drugs, and cardiovasculars, such as flunarizine, presently distributed by Janssen in Europe. The joint pharmaceutical project, which according to Janssen is the largest of its kind between the People's Republic of China and a western firm, will involve the participation of Janssen and three Chinese partners: the Shaanxi Pharmaceutical Industry Corp. (the pharmaceutical umbrella organization in Shaanxi Province), the China National Corp. for Pharmaceutical Technical and Economic Cooperation (a division of the State Pharmaceutical Administration in Beijing), and the Hanjiang Pharmaceutical Factory (a pilot project recently completed with Janssen's participation). Five Chinese will be represented on the board together with five Janssen employees from Belgium. According to the Janssen release on the venture, plans for the new pharmaceutical facility presently include a small chemical plant for the necessary basic materials, a pharmaceutical plant for the end products, a water purification system and administrative and service buildings. Janssen will design the production buildings and train Chinese engineers and executives on-site and at their headquarters in Belgium. Their Chinese partners will handle engineering and construction. Construction of the facility is expected to start in late 1985, and production in late 1987, Janssen said. The plant is expected to eventually employ 600 Chinese. Janssen noted that its executives will be involved on-site during the first years of operation. The project manager for Janssen has been International VP Joos Horsten, currently located in Belgium. The Xian-Janssen project culminates a six year effort by Janssen to establish working ties with the People's Republic of China. Janssen said that the successful completion of initial joint projects involving the construction of a chemical plant and a production facility for the manufacturing of Janssen's antiparasitic mebendazole, had helped the company establish the credibility with the local and state authorities needed to bring about the larger agreement. The terms of the new joint project, which call for the production of specified quantities of the 34 Janssen marketed drugs, were arrived at following a study of drug use in over a 1,000 Chinese hospitals to determine where the greatest needs were for expanded domestic capacity. Janssen said that, as in other such projects outside the People's Republic of China, Janssen will share in the profits generated by sale of the plant's products, which will be distributed throughout China through the established drug channels. Chinese interest in improving the quality and breadth of its domestic pharmaceutical production capabilities is also reflected in new national comprehensive legislation, the Pharmaceuticals Control Law, which passed in Sept. 1984 and becomes effective July 1, 1985. The new law is intended to strengthen and clarify the regulations affecting production and marketing of drugs in China, and will impact both domestic producers and firms exporting to that country. FDA staffer Gene Knapp, who recently visited China as part of a team invited to provide technical advice on drug regulatory issues, highlighted the new law at a Regulatory Affairs Professional Mtg. in Newport Beach, Calif. April 11. Knapp noted that he found the drug regulatory authority in China to be less centralized than he expected -- with that authority spread between county, provincial and state levels. However, he said that the new law will help standardize the Chinese regulations by placing responsibility for drug approval solely in state hands under the Bureau of Drug Administration. In addition the new law gives the Ministry of Public Health more specified control over the quality control aspects of drug production, Knapp said, and locates responsibility for drug imports and exports in the State Pharmaceutical Administration.
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