Country Report: China - Pharmaceutical Executive


Country Report: China
The Long March Marches Onward

Pharmaceutical Executive


From left: Joseph Cho, Managing Director of RDPAC; Yu Mingde, Chairman of CPEA
Joseph Cho, managing director of RDPAC (R&D-based Pharmaceutical Association Committee), adds a historical perspective to Dr. Mi's. "The Chinese pharma industry started with generics, and coverage available from a good health system was only recently available. It has really only been since 2005 that more advanced products have had the opportunity to penetrate to tier-3 hospitals in major cities."

This view, shared by many MNCs, explains how the locals have managed to capture and maintain share. But representatives from the locals' side, such as Yu Mingde, chairman of CPEA (China Pharmaceutical Enterprises Association), doubts the statistics altogether. "The results of comparison depend on different standards and methods employed. We can see the accurate statistics from IMS, and talking about distribution or profitability rates, MNCs have done much better than locals. But local companies have a higher market ratio than MNCs and do better in basic drug supply," he concedes, "because most MNCs produce patented drugs while locals do generics. The basic policy is to choose the lowest-priced drugs because of financial reasons and the large population."

With such conflicting messages, it's imperative to separate the noise from the signals. Jay Dong, general manager, Asia Pacific Region & China, of antibody and research leader Cell Signaling Technology, acknowledges this as a widespread difficulty. "People see opportunities, but at the same time, are perplexed by the many challenges or opportunities that are not materialized or over-exaggerated. They want to capture whatever real opportunity there is, while taking China as part of a global strategy, and figuring out how to leverage it."

Dong breaks it down: "There are two challenges to focus on. The first is identifying what's the real opportunity. The second is developing a strategy, so that whatever signal or noise there is, you are able to identify it. An integral part of that is having the right team to capture the opportunity, implement the strategy, and manage risks."


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