China proving tough nut for foreign firms?

Related tags Guangzhou Pharmacology China

Foreign drugmakers are failing to win ground against their local
counterparts in China, despite investing considerable sums in the
country over the last few years.

This is the take-home message from a conference in Beijing, which heard that domestically made medicines captured 69 per cent of the market in 2003, rising from 66 per cent in the previous year.

The figures, from Beijing Pharmaceutical Group, also showed that the market share of imported drugs fell from 18 per cent to 17 per cent, while those made by joint venture companies slipped from 16 per cent to 14 per cent, according to a report in the China Daily.

But while market shares are slipping overall, overseas companies have made great inroads in some areas, particularly the major cities. Citing the case of Guangzhou in Guangdong province, the report says that here imported medicines outsell locally made drugs by two to one.

Hou Dakun, president of Beijing KevinKing Management Consulting, claims that the majority of drug products imported or manufactured by Sino-foreign joint ventures are used in the major Chinese cities, and here the market has become relatively saturated in recent years.

Medicine sales in China's vast rural regions and smaller cities are still dominated by the domestic manufacturers, he added.

Price cuts

Meanwhile, foreign pharmaceutical companies including Novartis and Roche have asked the Chinese government to introduce a separate pricing system for their drugs in response to the country's latest round of price cuts, according to the Beijing Times.

Earlier this month, the National Development and Reform Commission said it would cut the retail prices of over 400 medicines, mainly antibiotics, by an average of 30 per cent.

The foreign companies claim the price cuts will hurt foreign manufacturers and will not necessarily benefit consumers, the paper said.

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