In late May, Shanghai's municipal government announced a set of cash incentives for Shanghai companies that are developing new drugs, medical devices or signing contract manufacturing agreements. Shanghai will underwrite 40% of a novel drug's R&D expenses if the drug qualifies for China 1.1 status (candidates never approved anywhere). In addition, other new biologics will receive up to $1.5 million and chemical drugs $500,000, while new TCM therapies will be eligible for up to $4.5 million. The plan was originally described by Brian Yang of Pink Sheet (see article), who generously allowed ChinaBio™ Today to use the information.

There are also incentives available for all types of medical devices as well as for contract manufacturing if the market authorization holder is located in Shanghai. The government will reimburse the MAH for 20% of the cost, up to a cap of $750,000. And to speed up integration of IT into the health sector, Shanghai will offer a maximum of 20% of the total investment up to $1.5 million. To digitize drug-making enterprises, Shanghai will offer 10% of the cost up to a cap of $500,000.

In general, the incentives seem to be very inclusive. For example, the medical device incentives include companies that offer imaging equipment, implanted intervention devices, medical consumables, surgical and life support equipment, rehabilitation aids, in vitro diagnostics and biomedical materials including reagents.

The new incentives show that Shanghai wants to support novel life science development. Shanghai is already home to China's largest concentration of life science activity, the Zhangjiang Hi Tech Park. Nevertheless, Shanghai seems to be aware that it is in competition with the other major China biomedical centers in Beijing, Suzhou and Guangzhou -- and even Boston in the US -- to attract young life science startups.

Disclosure: none.