The China Conundrum

China: An Increasingly Risky Bet for Drug MakersFor the world’s largest pharmaceutical companies, China is an increasingly critical, yet risky bet.Multinational drug companies expect sales from China to continue to grow quickly, as they did last year, accounting for 3.8% of total sales, up from 3% in 2011, according to a new report from consultancy McKinsey & Co.Agence France-Presse/Getty ImagesGlaxoSmithKline has said it expects its performance in China to take a hit from Beijing’s probe into alleged bribery by senior staff.Meanwhile, nearly half of the 50 senior pharmaceutical industry executives surveyed said that they expect China to account for over 10% of their global sales by 2020, when China is projected to become the world’s second-largest pharmaceutical market. Sales of 85 brands exceeded $50 million in China last year, with 11 surpassing $200 million, according to the study.For years, drug companies have seen big potential in China, where the government began overhauling its healthcare industry in 2009, developing a national insurance system. Easier access to medicine for the country’s 1.34 billion citizens has propelled growth for the sector.But the good news stops here: China’s becoming a bigger headache, McKinsey said. The business models that presented drug makers with solid growth in China are now under pressure. Regulatory risks are rising, with China clamping down on drug prices and protectionism on the rise.Multinational drug compani...

Source: PharmaGossip - October 22, 2013 Category: Pharma Commentators Authors: insider Source Type: blogs