Transnational pharmaceutical enterprise experienced mixed feelings in the first half of 2017: on the one hand, the price reduction and cost controlling become a normal of the pharmaceutical industry, the original drugs lost the advantage of high premium, and price for volume negotiations failed to achieve desired results, however, on the other hand, the lifting of the clinical trial rules and the accelerated approval of imported drugs brought new opportunities for innovative drugs to rapidly enter the Chinese market.
According to incomplete statistics, there have been 7 transnational pharmaceutical enterprises releasing their performance in the first half year in the Chinese market so far, all of which obtained great achievements in China, wherein, Bayer, Pfizer and Sanofi achieved double-digit rapid growth in China, and Novo Nordisk and AZ also achieved good single-digit growth, and their growth in the Chinese market was all higher than their global performance growth in the same period. Pfizer, Novartis and AstraZeneca achieved good growth in China, despite the unsatisfactory performance in the world.
Overall, the main reasons for the growth of the transnational pharmaceutical enterprises in China were product innovation, business model innovation, and coverage of local R&D needs. Transnational pharmaceutical enterprises are ushering in the critical period of transition in the context of the new round of medical reform in China, and it becomes very important for them to make themselves irreplaceable and select a suitable market strategy. In this process, Pfizer, AstraZeneca and Novartis, etc. are focusing on product innovation, and Bayer and Sanofi, etc. are pursuing business model innovation.
Pfizer: The product innovation mainly contributing to the growth
In the second quarter and first half year, Pfizer’s global performance slightly declined as affected by ICU Medical’s acquisition of its Hospira Infusion Systems business, however, it achieved good results in the Chinese market, with the revenue in China growing by 13% in Q2.
Innovative drugs have become a bottleneck for the growth of transnational pharmaceutical enterprises. From the achievements of the pharmaceutical enterprises in the first half of 2017, their growth was mostly driven by new drugs; despite the rich product lines, Pfizer’s products with good performance were mainly: the anticoagulant Eliquis (51%), breast cancer drug Ibrance (63%), and rheumatoid arthritis drug Xeljanz (42%), while the marketing and promotion of some drugs in emerging markets boosted its performance, for example, the pneumococcal vaccine Prevnar was approved for marketing in China and contributed 4% growth in the first half year.
According to the analysis report of Deloitte, an important strategy for transnational pharmaceutical enterprises to win in the Chinese market is to conduct localized production and R&D, to reduce the production cost and better meet and adapt to the Chinese market requirements, under the pressure of cost controlling, price reduction and replacement of imported drugs with Chinese drug, etc. in the Chinese market. Pfizer spent USD 350 million on establishing in China its third biotechnology center globally and the first in Asia in 2016, which was the largest overseas investment of Pfizer outside the U.S. in recent 8 years, showing that the rapid growth in the Chinese market has attracted its sufficient attention and that the product innovation is its main growth potential in the Chinese market in the future.
Bayer: Fastest in growth
Bayer’s pharmaceutical business had gratifying performance in the Chinese market in 2017Q2, with growth of 13.4%. Bayer is currently "the company with the fastest growth among transnational pharmaceutical enterprises" in the Chinese market, according to IMS data.
Bayer’s prescription drug business has been keeping solid growth in China, with the sales of the prescription drug business reaching RMB 13 billion in China in 2016, growing by 10% year on year, above the marker average, thanks to Bayer’s total solution in ...
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