The global pharma market in the next five years is expected to grow 3-6% compared to 6.2% in the past five years, while emerging markets will drive major growth and will hold 28% of global spending on medicines by 2015.

For Big Pharmas such as AstraZeneca PLC, a comprehensive strategy for emerging markets has become more important than ever. Steve Yang, former Pfizer Inc. VP for Asia R&D, joined AstraZeneca in January to spearhead R&D for Asia and Emerging Markets.

Four months later, just a few blocks away from his old office at Pfizer's R&D center, Yang sat down with PharmAsia News' Shanghai Bureau in his new office within AstraZeneca's Innovation Center China to talk about his plan to execute the company's R&D strategy in Emerging Markets.

PharmAsia News: Until recently, you headed up Pfizer's Asia R&D efforts. What did you find more appealing about AstraZeneca's R&D program in Asia and emerging markets? ( Also see "Pfizer Shake Up Continues With Key Exits From Emerging Markets" - Scrip, 10 December, 2010. ).

Steve Yang: Well, you are not the first to ask this question. There are three major reasons. First of all, my new job gave me a broader scope. Secondly, it offers significant depth in terms of AstraZeneca's efforts in China. And thirdly, I was attracted to AstraZeneca because of its people and culture. I think all of those elements really ... It's been four months since I joined, and I'm really pleased with my decision.

PharmAsia News: Can you tell us about your main responsibilities at AstraZeneca?

Yang: I have three different areas of responsibility. I have overall leadership of the Innovation Center China, which is our research center here in Shanghai [Also see "AstraZeneca Invests $100 Million To Expand Shanghai Site In Move To Capture Larger Share Of Emerging Markets" - Scrip, 16 September, 2009.].

I'm also responsible for aligning and implementing our Asia R&D strategy. We have R&D facilities in India, Bangalore and also in China. We are one of the very few multinational companies that have internal research operations in both China and India. I'm very proud of that.

We also have an excellent clinical development team in Osaka, Japan. So we have developed an integrated strategy to support our commercial goals in Asia, as well as our global R&D efforts.

The third area of my responsibility is to develop strategies to support our business for emerging markets outside Asia, for example, Russia and Brazil. I'm still in the early stages of information gathering. This will be an important area of focus for AstraZeneca, so I will be working with other global colleagues to develop our R&D strategy in those countries.

PharmAsia News: I know AstraZeneca is one of a few multinational companies that established a bricks-and-mortar facility in China. How is AstraZeneca's R&D strategy different from other Big Pharma in China?

Yang: We were one of the first multinational companies to set up a research lab here in China. The ICC has been operating since 2007, so we have four years of experience.

Firstly, a key differentiator for us is our unique combination of internal and external expertise. In addition to the talented, internal team we have built over the last four years, we also collaborate extensively with external partners. You can call it a hybrid model, which allows us to combine the best of both worlds.

Secondly, the R&D center here collaborates closely with our global colleagues. Other R&D centers may take a different road, but this approach works very well for us.

The third element is, we are focused on a couple of disease areas within oncology, which we believe have high unmet medical needs in Asia. This includes gastric and liver cancer, which are highly prevalent in this part of the world. We have unique capabilities to understand these diseases and are working on developing innovative new medicines.

PharmAsia News: How is strategy execution different in emerging markets than in developed markets?

Yang: Well, there are many differences and I'm sure I will discover even more as I visit some of the other countries. I'm still in the early stage of that journey, so I don't have all the answers.

But based on my experience in Asia, as well as my visit to Russia earlier this year, I'm starting to develop an understanding of different markets. A couple of things immediately jump to mind. One is, in emerging markets, the infrastructure for basic research and for industry is still in its early days, compared with developed countries.

Secondly, each country is different in terms of its regulatory policy, its local environment, as well as its basic research capability and talent pool.

But the common theme is that all of them offer tremendous opportunity for growth and there are huge unmet medical needs. That's why emerging markets are a key strategic focus for AstraZeneca.

Some opportunities are common across countries, while others are unique for different regions or populations. But they all offer us additional opportunities to meet patient needs. Because of this, we are eager to build partnerships and develop further local insight in these markets.

So, that's where I think much of my work will be focused, on building a solid understanding and to learn by contributing through partnerships. Also, building on what we have learned in China and in Asia, taking a very focused approach so we can make a meaningful impact for patients.

PharmAsia News: You mentioned your visit in Russia. With a $150 million manufacturing facility recently announced in Russia, can you give us some insight into the country there and your R&D plans in that country? Also see "AstraZeneca To Break Ground In Russia As MNCs Build Stronger Base In The Country" - Scrip, 1 March, 2011. .]

Yang: I'm glad you noticed our investment. In February, we made a $150 million investment in a manufacturing facility because Russia is strategically important to AstraZeneca. I was also in Moscow at that time, attending a healthcare conference that was sponsored by AstraZeneca and our local partners, focused on healthcare innovation.

We announced a memorandum of understanding with the Skolkovo Foundation, which is one of the leading non-profit organizations, to establish a program called the Virtual Research Institute. This is our first step to build a concrete relationship with the local scientific community and, obviously, we are also evaluating other options.

At the moment, it's too early to tell exactly what type of facilities or capabilities we may build. But one thing is for sure, we do see tremendous potential and we want to leverage the talent pool, the available local infrastructure and the strong industry support from the Russian government, in order to identify win-win partnership opportunities.

PharmAsia News: What type of support are you seeing from the Russian government? Do they have any programs that are comparable to some of the support by the Chinese government, such as the '1,000 Talent' program?

Yang: They don't have anything exactly like the 1,000 Talent program. The Skolkovo Foundation has a particular program that has received strong support from the Russian government, so they envision building a Silicon Valley-like community with different high-tech companies from across different industries to be based there as the basis for technology innovation.

And, AstraZeneca is very proud to be one of the first multinational pharmaceutical companies to partner with Skolkovo. This demonstrates both our commitment to and interest in driving innovation through this partnership.

- Dai Jialing (j.dai@elsevier.com)

[Editor's note: Part two of this interview will appear in an upcoming issue of PharmAsia News.]

AstraZeneca R&D VP Steve Yang On Building R&D Success In Emerging Markets: An Interview With PharmAsia News (Part 1 of 2)

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