China's pharmaceutical market is rapidly expanding to learn from Mr. Yang

Business News Agency reported on September 6th that “Bayer will enter China soon for 100 years and it will stay in China for another 100 years,” said Andreas Fibig, CEO of Bayer Schering Pharmaceuticals. In 2009, the German pharmaceutical company had sales revenue of more than 10.4 billion euros. Its main growth came from the Asia Pacific region, especially China.

No one dares to ignore "Chinese opportunities." With the aging process and economic prosperity, the Chinese pharmaceutical market is rapidly expanding. A McKinsey report declared that China, which has grown at a rate of more than 20% each year, has created a tempting stage for global pharmaceutical companies, while at the same time, the growth rate of major markets in Europe and the United States is slowing down.

Transnational giants have poured into this land. Shanghai Science and Technology Park even appeared in the "Pharma Valley Hotel," specifically for lunch around more and more Western pharmaceutical company employees. Andreas Fibig's words are quite representative: "Emerging markets have become the growth driver of Bayer Schering Pharma. We must adopt the right strategy to ensure our position."

These strategies include introducing R&D centers to China or including China in its global new drug release plan. In February 2009, Bayer Schering Pharma invested 100 million euros in establishing a global R&D center in Beijing. Danish Novo Nordisk cooperated with the Shanghai Biosciences Institute (SIBS) to establish the “Prediabetes Transformation Research Center”. Novartis also promised to invest US$1 billion to build a research and development center in Shanghai by the end of 2015.

There is no doubt that Chinese domestic pharmaceutical companies are not willing to give way. However, compared with these transnational giants, Chinese pharmaceutical companies are at a very disadvantageous position. In 2008, the top 100 accounted for only 41% of the total. The pattern of many, small and scattered makes most of the companies unable to become R&D subjects. The entire industry cannot extend to the high end. "Although China is known as the world's factory, pharmaceutical manufacturing is a significant short-circuit," said one researcher.

Innovation is the lifeblood of the pharmaceutical industry. The Chinese government also allows western prices for new drugs to be based on recognition and encouragement of innovation. However, innovation is precisely the lifeblood of Chinese domestic pharmaceutical companies. The data shows that China's pharmaceutical companies have very little R&D investment, which accounts for less than 1% of total sales revenue in the year, and excellent companies rarely exceed 5%.

Andreas Fibig said that Bayer has four R&D centers, with about 5,900 employees working on R&D in the world, and R&D input accounting for 15% to 17% of sales for the year. China's excellent pharmaceutical companies cannot compare with these multinational giants. Most of them rely on "a fresh move, eat all over the sky," the hands of the trump card is very small, and follow-up worrying. There are also some companies that are becoming producers of generic drugs. At the two sessions of the year, CPPCC members complained to reporters that some drug companies have no patience to follow serious imitation, and even want to cut corners and cut materials in order to compete at low prices. "This will put Chinese pharmaceutical companies to death."

Another notable phenomenon is that on the one hand, multinational pharmaceutical companies engage in local targeted research by establishing R&D centers to continue to maintain high-end advantages; on the other hand, they infiltrate generic drugs through acquisitions to expand the low-end market. Andreas Fibig stated bluntly that Bayer will establish a generic drug business platform in addition to positioning itself in areas of high medical demand, selectively expanding branded generic drugs and regional products.

“This is the best and worst time. Chinese pharmaceutical companies are facing unprecedented opportunities and are facing unprecedented containment. We must be able to grow rapidly in our studies, just like other manufacturing industries.” The Chinese pharmaceutical company owner said, "Of course it is not easy."