Country Report: China - Pharmaceutical Executive


Country Report: China
The Long March Marches Onward

Pharmaceutical Executive


Q. David Yang, CEO of MicroConstants China
Andras Gizur, chief representative of Gedeon Richter in China, whose expertise in the country dates back almost 20 years, has a realistic assessment of the sometimes rosy views of the market from outside. "Everybody thinks China is big," Gizur says, "and it's therefore very easy to make a successful business – but that's not true, because it's very complicated, everybody's here, and the competition includes all the big MNCs plus the local companies, which are good and getting better." One way around it is partnering, a longtime necessity for Gedeon Richter, a company which counts 90% of its sales originating from outside its native Hungary. Enter GRmidas, the new OTC company, which will enable Gedeon Richter to be one of the only players at its level to offer full service for both Rx and OTC lines.

"In the last 10 or 15 years, Gedeon Richter focused on Rx, which was the strong point because of our long term experience and the fact that most of our products are Rx. However, our strongest therapeutic area consists of gynaecological products which account for some 35-37% of global sales – and in China, these products are mainly OTC. This focus on OTC was one of the main reasons we established the new JV GRmidas Pharmaceuticals, and we have also opened a new business line to further develop primarily the gynaecological and women's healthcare business line as well," which currently includes Postinor, the emergency contraceptive known in the US as Plan B. "Earlier we were not present with this portfolio in China, but it's an area we want to develop in the coming years," Gizur says. "Every step is difficult, but we're on the right track."

Found In Translation: Ancient Wisdom from the Middle Country, vol. 3
Investment company Vivo Ventures specializes in therapeutic products in clinical development in the US and China, and is a different kind of partner altogether. Managing Partner James Zhao gives the example of Kanghui, a former Vivo investment recently acquired by Medtronic for USD 816 million, of how his firm can help local companies innovate and accrete significant value.

"By the end of 2008, Kanghui had two products in the pipeline in trauma and spinal. Right now, they have three, and the third, a joint product, was brought in by Vivo after our investment. This joint technology comes from a company Vivo is very familiar with, based in Sacramento [California]. One of the reasons why Kanghui invited Vivo to come onboard is that, while they were not short of cash, they lacked technology. Chinese people are very smart – and they are rightfully well-known for their ability to copycat products very soon – but technology like the one Vivo introduced to Kanghui represents a fine art of technology and manufacturing to duplicate the natural mobility of the joint."

Zhao is clear about the value Vivo provided as a partner: "Were it not for Vivo, it would have taken Kanghui five to seven years to build up such a capability in-house and bring the final product to a commercial stage. But Vivo introduced both companies to establish an OEM opportunity for Kanghui, which is now the official OEM supplier worldwide. With this third product line in joints, Kanghui can call itself a true orthopaedic company, and a total solution orthopaedic provider. Without Vivo, this would not have happened, and this demonstrates in a very clearcut way how what we do is different."


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