Merck to build $106.67m drug plant in Jiangsu’s Nantong

German company Merck KGaA Friday announced that it would build a 650 million yuan ($106.67 million) pharmaceutical plant in Nantong, East China's Jiangsu Province, where the division will focus on producing Merck's heart and metabolic medicines.

Upon completion, the plant is expected to be the second-largest pharmaceutical plant of Merck Serono, a biopharmaceutical division of the German group, the company said at a press conference held in Nantong on Friday. Merck Serono's largest current pharmaceutical plant is located in Germany.

The Merck plant will be built at an industrial park in Nantong and is expected to start production in 2017, Merck said at the press conference Friday.

The company will produce medicines to treat diabetes, thyroid and cardiovascular diseases in the Nantong plant, and all of the drugs produced in the plant are covered by China's essential drug list, it said.

Prices of drugs named in the essential list will be lowered to guarantee better access to patients, and those who use listed drugs could enjoy government reimbursement.

"Local production of the drugs could help Merck to lower its costs," Zhong Hongyue, a healthcare sector analyst at consulting firm Frost & Sullivan, told the Global Times Sunday.

The bio industry is one of the emerging industries that are being supported by the Chinese government. In a five-year plan released by the State Council in December 2012, the government has set a target of at least 20 percent annual growth for the biopharmaceutical sector in China from 2013 through 2015.

International drug firms have sped up in getting into the growing biopharmaceutical sector. Merck just inked a deal with Beijing-based biotech company BeiGene on Wednesday, to cooperate in cancer treatment.

US drug maker Eli Lilly and Co also announced Thursday that it would invest over $700 million globally in its insulin capacity, of which $350 million will go to China.

China's biopharmaceutical industry has potential for strong growth. Globally the sector accounted for 17 percent of the overall drug market by 2010, but the ratio in China has stood at around 5 percent, Joseph Cho, managing director at an industry association representing major international drug firms in China, said at a forum in Beijing Tuesday.

At the forum, Cho has also called for a more optimized regulatory process.