Are You Ready for the New China? - Pharmaceutical Executive

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Are You Ready for the New China?


Pharmaceutical Executive


Strategies to Cope

While a robust private health system in China is by no means a foregone conclusion, pharma companies should be considering the strategies they will employ if China moves in this direction, and also how they could influence policy to increase the likelihood that it will. Three key actions come to mind:

1) Companies need not wait for the creation of a private healthcare system to build relationships with key physicians and decision-makers—they will often be the same ones from ongoing promotion efforts. KOLs and physicians with top reputations will likely be the first practitioners to commit some of their time to these facilities, which will indeed be eager to have them.

2) Market access departments at HQ should be closely monitoring China's treatment of domestic versus foreign innovative products. While it is expected that China will give local innovators generous support on R&D portions of the value chain, equal treatment on the commercial side (in principle guaranteed by the World Trade Organization; in practice not always the case) will be important in ensuring that overseas drugmakers derive benefit from policies drafted by the portions of the Chinese government that realize that innovation will not occur without market rewards. In other words, are official reimbursement policies fair and transparent?

3) On the government and public affairs front, even as they support China's efforts to bring cost-effective medicine to a broad cross-section of China's population, companies should also be sending the message to healthcare authorities that offering a choice for premium/for-profit services and medicines will create more medical consumer satisfaction, promote better health outcomes and ease the burden on the expanded public system. And as government agencies will not be on the hook to subsidize this sector, they should similarly be less concerned with regulating its prices.

Ultimately, pharma must understand that two prime forces guiding the Chinese government in its actions, including its regulation of the nation's healthcare system, are fear and pride. Fear of widespread popular discontent over cost and access to medical care has driven the sweeping changes in healthcare and pharma that are now under way, but pride in the country's emerging status on the global stage means that China strongly desires to be able to boast of having a world-class medical and drug market. If industry wishes to enjoy the fruits of a continued presence in China and sell premium, innovative products at market rates, overseas drugmakers will need to respond to both.

And one thing has not changed: The ability to act as a good corporate citizen and assert a useful role in national industrial policy on health is going to be essential to success in the new China.


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