Roche Group sees great innovation potential in Chinese market

Editor's note: With the fast pace of China's economic and social development, healthcare has become a key issue of national development plan. In the new era of further opening-up, the question of how to grasp the opportunities and improve the lives of patients has become a focus for the industry. Christoph Franz, chairman of the board of directors of Roche Holding Ltd, shares his thoughts with China Daily.

This year marks the 40th anniversary of China's reform and opening-up and the Chinese government has vowed to further deepen the process. In your view, what are the expectations and opportunities for Roche in the new era?

Forty years after the reform and opening-up, China has succeeded with continuous economic growth and trade liberalization. Today it already has the second largest economy in the world and it has become more active in looking for alignment and advocacy opportunities with the international business community. With its focus on science and technology, and its huge reservoir of talented people, China has the potential to become one of the leading innovation hubs in the world. Roche is proud to play a part in making it happen and is looking forward to embracing more opportunities in China.

From your experience, what are the significant changes in China's economic development as well as in its healthcare sector? And how do such changes affect Roche?

The health of a nation's people is an important benchmark of its economic and social development, as well as for its prosperity. As such, China has elevated healthcare to an important position of national plan, for example the Healthy China 2030 initiative. It has been ramping up efforts to reform its healthcare system to provide quality healthcare for everyone. Roche has already benefited from the process. One example is the accelerated approval process, from years to months, for new innovative medicines to China. In the past, it usually took four to five years. Such an initiative indicates a promising future and it allows global innovation to be available for both Chinese and overseas patients at the same time.

Another initiative taken by the government is to expand reimbursement coverage for critical illness. Through the national negotiation, more cancer medicines are enlisted in the national reimbursement drug list. It is encouraging and we are optimistic that with joint efforts from the Chinese government and companies like Roche, more and more patients will have the opportunity to access innovative medicines.

Roche has been rooted in Shanghai for a long time and it has witnessed the development of the healthcare industry over the decades. We know that Roche experienced a remarkable business performance globally in previous quarters, but how about its performance in China? What efforts will Roche make to ensure sustainable development in the market?

Globally, Roche is reporting very strong business growth. In the first nine months of this year, group sales rose 7 percent to $41.7 billion. In the Asia-Pacific region, growth is driven by sales in China. China now is the second largest market at Roche globe right after the United States. This also reflects the changes we see in the healthcare system in this country, following positive change.

Sustainable success requires a long-term perspective and forward-looking investments. We have had deep roots here for over 90 years and recognized China's tremendous potential as a healthcare innovator early on. We invested considerably to build a full value chain in China, from research and development and manufacturing to sales.

We attach great importance to enhancing our R&D activities in China, bring diagnostics and medicines faster to Chinese patients. Over the past five years, we have invested $1.2 billion. Our Shanghai innovation center, which is due to be inaugurated in 2019, is a strong demonstration of Roche's heavy investment and long-term commitment to Chinese patients.

With our strong pipeline and talented people, I am confident about our longterm growth prospects.

Could you please tell us about Roche's R&D capacity globally and in China? What are your R&D initiatives in China?

I am proud to say that Roche has one of the strongest pipelines in the industry. Innovation is in our DNA, and we invest nearly $10 billion in R&D every year, more than any other healthcare company. In 2017 we spent $10.2 billion in R&D, nearly 20 percent of group sales.

To enhance our R&D activities here in China, we have two main strategies. First, Shanghai is the home of one of our major global strategic R&D centers. We bring together in this site top scientists from China, also top scientists from all over the world to focus on new ideas, particularly in areas of diseases which are very prevalent in the country, like Hepatitis B. In addition, a new Shanghai innovation center with an investment of 863 million yuan ($124 billion) is under construction, and is expected to be inaugurated in 2019. With its focus on early research and development against infectious diseases, immunology and inflammation, the center aims to address unmet needs for patients in Asia and globally.

The second is through partnerships, we have learned a great deal over the last 120 years since Roche was created. Although we have excellent ideas inside our own innovation centers, there are many brilliant ideas outside the company. We are eager and extremely open to forming partnerships with all sorts of young companies and startups. And I expect to see more and more innovative ideas being created through China's innovation ecosystem.

Roche has put personalized healthcare in place as its core strategy since 2006. Could you elaborate more about personalized healthcare in the digital era? Is there any innovative solution to bring to China?

With our combined strengths in pharmaceuticals and diagnostics, Roche is uniquely positioned as the pioneer of personalized healthcare. Over the past 10 to 15 years, we have advanced personalized healthcare to become a global leader in this field.

Now we are reaching the next level of personalized healthcare, due to the ongoing digitalization in healthcare.

Personalized healthcare has an enormous potential for patients in China. Today, we have already had activities in China to drive personalized healthcare, such as innovative profiling technologies. Earlier this year, we launched FoundationOne in collaboration with a local innovative company, Di'An.

However, to realize our vision of personalized healthcare in China is still a long journey. Developing national standards for digital medical records and protocols for sharing information between hospitals, academics and payers, is seen of great importance. We are eager to share our international experiences and expertise in the new era and contribute to China's healthcare development.

(China Daily 11/16/2018 page15)