Medical network May 23 - no matter face lining, multinational drug companies in China are beginning to decline, which directly lead to in recent years, most of the growth performance of them from lying "make money" period of more than 20% growth to 10% or less now. The battle between foreign and domestic investment will be even worse for China, the world's second-largest drug market with sales of $116.7 billion in 2016. 

 

Pfizer lost its big deal 

 

On May 10, Pfizer China's internal conference announced that the general manager of Pfizer's global innovation pharmaceutical company had left the company. As soon as the news came out, the industry exploded, mostly to worry about Pfizer's future prospects in China. After all, as one of the key players in helping Pfizer to open up the Chinese market, it has been a major player in Pfizer's China. 

 

Public information, ChanGuoHong former Pfizer tumor greater China President and vice President of Pfizer China, responsible for leading the mainland, Hong Kong and Macao region tumor business, get good grades. 

 

Media quoted by internal mail said, "over the past five years, ChanGuoHong successfully led the race can be listed in China, and soon let China become the world's second largest market. Another oncology the lida only spent 86 days by the Chinese government complex examination and approval procedures and listed, is another important achievement." By 2016, Pfizer has split the global business into two groups: core and innovative. 

 

In June the same year, ChanGuoHong officially been Pfizer global pharmaceutical innovation, general manager of China, is mainly responsible for innovative medical business, covering tumors, vaccine, the immune inflammation, internal medicine and rare diseases, five areas. 

 

He has been in the position for less than a year before leaving. As of press release, Pfizer officials did not give any explanation for the reasons for the resignation. 

 

Head of a biological pharmaceutical factory in northeast area, how to leave because of some reason is not important, "gone is gone, gone will no longer play a role, even give an official reason, also is likely to be grandiose. Important or go after what are you going to do next Pfizer." "He told the new financial observer. 

 

Indeed, there is no doubt that his departure will have an impact on Pfizer, whether from the experience of a single country in the industry or its contribution to Pfizer. 

 

Beijing time strategy enterprise management consulting co., LTD., a partner and chief consultant Du Chen is to introduce new financial observation reporter: "Mr ChanGuoHong at Pfizer struggle over twenty years, witnessed the Pfizer in entering the Chinese market, based in the Chinese market and rapid development of history, is also a hero with the Pfizer speakers in China, one of the characters left for Pfizer must have influences on the development of the market in China." 

 

But he also admitted, is a mature multinational pharmaceutical giant Pfizer, this kind of mature performance not only in the market, but also the management of human resources especially on the backup talent cultivation, "from this standpoint, Pfizer short-term performance in the Chinese market will no doubt be affected, but the long term, affect Pfizer performance in the Chinese market should be their overall mechanism and the ability to adapt to the Chinese market. If Mr ChanGuoHong departure due to Pfizer China collapse, that means Pfizer maternal problems." 

 

As for whether Pfizer will be as "narrow" as the media says, it is hard to know for sure. But, at least, Pfizer's weakness in China was already evident in China. 

 

And Pfizer is by no means the only multinational drug company to have this fate. 

 

Multinational drug companies are overshadowing 

 

Including Pfizer, glaxosmithkline, bayer, etc, the multinational pharmaceutical companies are ever holds an absolute advantage in the Chinese market, the advantages of the product itself, the related policy tilt factors such as let them like nobody's position is wanton expansion. 

 

Multinational drug companies, Du Chen recalls, really into China was in the 1980 s, when entering also need many administrative barriers and negotiation process, and enter a new market, also needs to have to adapt to the process. "Since the 1990s, the quality, efficacy and marketing of pharmaceutical companies in China have shown a huge competitive advantage in the Chinese market." He further explains that "channel management, brand management, such as a medical representative concept is unheard of in China; they are choosing talent than Chinese medicine pharmacy is highly educated talents directly from the 3 armour hospital digging doctor, domestic drug firms cannot match." 

 

More importantly, as intellectual property protection awareness increases, patents also differentiate local pharmaceutical companies from multinational drug companies. 

 

In the 21st century, multinational drug companies have had their best days in China. "There's a lot of money out there," he says. "He told the new financial observer. But after more than a decade of growth dividends, things changed in 2012. 

 

The most important thing is that many multinational drug companies patent expired, this means that the local drug firms can produce generic drugs, increase the same drug of alternative. 

 

At the same time, in 2015, the relevant departments of the state abolished the sole pricing power of the original medicine and changed the pricing of the market to the market. The implementation of the consensus evaluation policy of generic drugs also provides a guarantee for the quality and level of generic drugs. Much of this has exacerbated market competition and eroded the market share of multinational drug companies. 

 

And in the most competitive new patents, multinationals have failed to deliver much satisfactory results because of lower r&d efficiency. 

 

In Du Chen view, multinational drug companies top decision-makers in understanding the changes of the Chinese market was slow and does not reach the designated position, sometimes even self-righteous, also slow down their steps of high speed development in China. 

 

A few years ago, however, the glaxo case also lowered the reputation of multinational drug companies. So, no matter face lining, multinational drug companies in China are beginning to decline, which directly lead to in recent years, most of the growth performance of them are from slowing lying "make money" period of more than 20% to 10% or less now. 

 

Mass reduction 

 

The decline in performance has to be done. 

 

The simplest and most straightforward way for multinational drug companies is to slim down. Since last year, novo nordisk, abbott laboratories, Merck, novartis, and other enterprises have carried out different levels of layoffs or so-called personnel adjustment, some even more than once. 

 

"Although some thin body has not affected the Chinese market, but the weight will be overall reduce business operating costs, does not rule out to use save money in the Chinese market, after all, the huge market demand." "Said the regional director. 

 

However, when the market dividend disappears, it is not enough to slim down. 

 

In the short term, the acquisition of patented drugs has become another form of redemption. 

 

In May 2016, Pfizer announced that it would buy Anacor, a company that matches Pfizer's inflammatory and immune product lines, at a total of about $5.2 billion in cash, according to public data. Pfizer officials expect the move to boost short-term revenue growth for the innovative drug business. 

 

In early August of the same year, Pfizer stepped in to buy Bamboo Therapeutics, a private company that develops gene therapy, to improve its status in the treatment of rare diseases. That same month, Pfizer announced a $14 billion acquisition of Medivation, a biotech company that makes cancer drugs. 

 

The other giants are not too weak. 

 

As early as the end of 2014, masha had bought drug company Cubist for $9.5 billion. Last June, Mr. Masha announced another $1.25 billion acquisition of Afferent Pharma. 

 

In addition, some enterprises will also sales of business outsourcing to Chinese companies alone, "is a multinational drug companies only responsible for production and research and development, sales of outsourcing, such problems are of outsourcing, has nothing to do with pharmaceutical companies, drug companies only need to charge a fixed annual sales income." "He said. 

 

This approach does, in part, pass on risk, but not without harm. 

 

The regional director said: "if really the problem, will also affect the brand itself, it is a truth, and sell clothing napa stores if outsourcing to competitive price drugs, can cause confusion of the whole price system, to the brand will be bigger." 

 

In Du Chen view, for the Chinese market, multinational drug companies that just dumping the thinking of drugs has been inappropriate, "should be the Chinese market as a whole market, the research and development, purchasing, technology and production each link as a whole." 

 

At the same time, he also pointed out that as China's market down and the change of the pattern grading diagnosis and treatment, multinational drug companies also consider will focus on the 3 armour hospital to county of the city and urban community hospital transfer. 

 

This is already done by companies. 

 

Last year, sanofi China has put forward the basic strategy of the future will focus on in areas such as slow disease, primary market, will expand more community health centers and retail drug stores. 

 

So multinational drug companies are doing all they can to curb the slowdown in growth. 

 

Local drug companies are poised to start 

 

Multinational drug companies value the Chinese market so much that they value their future prospects. The growth gap between mature and emerging markets will widen over the next few years, the industry predicts. According to the report, to 2018 years ago, emerging markets pharmaceutical sales is expected to account for one-third of the total cost of the global market, the number is neck and neck with the United States market, the former has contributed nearly 60% of market value growth (not including rebate and discount). By contrast, all developed markets, including the us, will be responsible for just 25 per cent of market value growth. The potential for global growth will be significantly skewed towards emerging markets. 

 

"The Chinese market should be the most promising in emerging markets, and the future will be for a long time." "Said the regional director. At the same time, he thinks the chances of local drug companies are coming, "it's time to start." In fact, although multinational drug companies have taken different steps in recent years to mitigate the downturn, it will take time for these measures to really work. 

 

Pfizer, for example, bought Medivation last year, though it received the latter's prostate cancer drug Xtandi, but sales of the key drug were far from expected. 

 

, head of the area will be this one phase of the multinational drug companies now summarized as "nap", "this is not I said, a few months ago an industry exchange, many of his peers think generally, although multinational drug companies in terms of scale, product category, research and development ability has advantages, but at least they now speed is slow, this is an opportunity for our local drug firms ()." He said. 

 

His company has been paying high prices for talent since the middle of last year, strengthening research and development and increasing the production of existing generic drugs. 

 

Du Chen also points out that a lot of experience in foreign company talent has begun to return to local pharmaceutical companies, Chinese medicine (25.350, 0.13, 0.52%), industrial policy, also gradually fair, special treatment of the multinational drug companies have been canceled, it all helps local drug firms to catch up with, but the "technology and patent medicine is still the core competitiveness of the pharmaceutical industry, technology, internationalization and cooperation to realize the effective ways to counter attack" is to surpass oneself. 

 

Of course, it's not an overnight attack. But at the very least, it's a good start when you're willing to take the opportunity to make a change in a multinational drug company.