US-based Monitor Group, a global management consulting firm, released a new report, China, the Life Sciences Leader of 2020, finding that China is poised to become the global leader in life sciences discovery and innovation within the next decade. At a time when the global life sciences and pharma industries are beset by major challenges, including patent cliffs, skyrocketing costs of drug approvals and failures in key trials for potentially landmark new drugs, China has developed a strategy of targeted government investments. Through a variety of national and regional programs, China is spending billions on a new health care “safety net,” encouraging the growth of life science parks and start-ups, financing the development of a high-quality research infrastructure and luring back tens of thousands of Western-educated Chinese researchers. “In just a decade’s time — a short-term horizon in the life sciences field — China will not only be a significant engine of innovation, but has the potential to create a new model for advanced drug discovery,” said Mr George Baeder, who runs Monitor’s China life sciences practice from his office in Shanghai and co-authored the report. “Other industries have repeatedly failed to anticipate how quickly China can adapt and impact the global playing field.” Baeder cautions that the pharma industry must now also pay attention. Based on research and interviews with dozens of life sciences professionals both in the US and China, the Monitor report finds that China‘s life sciences industry is today gathering a critical mass of highly-skilled talent, savvy and focused venture investors and growing government support as its market for drugs and medical devices escalates. China’s domestic market is expected to overtake Japan and become the world’s second drug market by 2015, and as global pharma firms are forced to slim down and cut research staffs, many now see China as a compelling destination to conduct cutting edge new research. Among other findings, Monitor says that: * At least 80,000 Western-trained post doctorates in the life sciences have already returned to China to work in the industry or in academic institutes. The pace of repatriation of these highly-skilled scientists is likely to accelerate over the coming decade. * China will unleash $124 billion between 2009 and 2012 alone to build new municipal as well as county-level hospitals as part of its broad-based health care reform. * An exclusive Monitor survey of Chinese life science professionals now working in the United States finds that fully two-thirds contemplate either returning to China for good or becoming “sea turtles” — life science professionals who constantly circulate between China and the US, in pursuit of commercial and research opportunities. The report argues that such “sea turtles” and the “hybrid” firms they create will become important drivers of China’s life sciences innovation, as the biggest pharma firms are forced to specialize on core strengths and reduce head counts in areas where they have not succeeded in creating new therapies.