That’s a question every Western pharmaceutical company currently eyeing China’s growing drug market seriously needs to ask themselves. It’s a question posed by Bain & Company a year ago in an article titled Embracing China’s Brave New Pharmaceutical World. It’s also a question PaizaBio is posing today: Western pharmaceutical companies, does your business model meet the local demands of China?
You’ve seen the numbers. With 1.4 billion people, China is larger than North America, South America and the European Union combined. It’s now the third largest drug market in the world, valued at $150 billion (US), and poised to assume second position in very short order. If China’s drug market continues its double-digit growth rate, it will be equivalent in value to the United States as early as 2021 (~$570 billion US projected).
If you’re a multi-national pharmaceutical company, you know all too well that you need to be fully committed to China sooner rather than later.
The arguments are compelling. We already mentioned a population of 1.4 billion potential customers. With the aging of its massive population, diseases like diabetes, cancer and heart disease are on the rise and can be addressed, in part, with drugs. The Chinese government has formally committed itself to making healthcare more accessible to all citizens. Finally, the Chinese people prefer Western drugs, which they equate with quality.
But if Western drug companies think they can enter China with a “business as usual” approach, success will be elusive. Every country, whether it’s Argentina, India or China, has its own ways of conducting business. Western companies are well served to recognize the maxim “think global but act local as nowhere is this more important than in China.
Bain takes this absolute a step further, saying that, “success in China will require a fundamental reinvention of the commercial model.”
While Bain points to many areas requiring fundamental changes, including the need to manufacture products tailored to the health needs of the Chinese, we found their advice that multinationals should consider building strategic alliances particularly relevant. PaizaBio was created specifically to serve as a strategic partner to Western pharma companies that want to expand into China in the sterile injectables market. We have more than four decades of experience in global drug manufacturing and logistics, and another two decades of success in aseptic fill-and-finish contract manufacturing in China. We know what it takes to be successful in China because we’ve done it. We welcome the opportunity to talk with Western pharma companies on the best way to “get fit” for local business in China.