In China’s Tougher Drug Market, Minnows Open Back Door for ‘Big Pharma’

Saturday, April 30, 2016

Armed with Beijing funds and friends in the right places, Chinese drug minnows are thriving, luring money from ‘Big Pharma’ majors struggling to restore the strong growth they once enjoyed in the world’s second-largest medicine market.

Chinese healthcare mergers and acquisitions nearly tripled last year to more than $50 billion, helped by giants like GlaxoSmithKline PLC and Eli Lilly and Co tapping small biotech and research innovators. The targets offer vital regulatory know-how as Beijing builds a domestic drug industry.

For Big Pharma, acquisitions, licensing deals and joint ventures offer a back door into a market where Beijing expects healthcare spending to rise to $1.3 trillion by 2020. The majors need the opening: their China growth has stalled to low single-digit pace from over 20 percent just four years ago as branded generics have lost their shine.

“As a China biotech (company) we have the advantage of knowing policy, understanding the environment and being able to mobilize resources to get things done,” said Li Chen, 54, chief executive of Hua Medicine. Hua has a deal in place to develop drugs including a diabetes treatment licensed from Swiss giant Roche Holding AG.

Source: Reuters (link opens in a new window)

Health Care