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Peter Mack
Marketing Director,
Greater China

Trends in pharmaceuticals in China

November 18, 2013

Few categories have been so buffeted by the trends of the twenty-first century as pharmaceuticals—and nowhere more than in China. Here, pharma sits at the intersection of vast demographic change (an aging population with 9 million more men than women); unprecedented economic growth (a 550 percent increase in per capita income over the last 20 years) with associated “rich man” diseases and medical expectations; and an unheard-of patent transition. Between 2012 and 2016 hundreds of pharmaceuticals will lose their protected status, resulting in some $135 billion in sales at risk as buyers turn to generic drugs. Add the Chinese government’s classification of pharmaceuticals as a national security priority (allowing significant regulatory interference), subsidies to a host of manufacturers, and ongoing support for traditional Chinese medicine.

It’s easy to see why Big Pharma has devoted so much energy to cracking the code of doing business in China. By and large its approach has been cautious and accommodating. Johnson & Johnson has leveraged its relationship with Xi’an Pharmaceuticals into the successful Xian Janssen partnership; Pfizer continues to evolve its connection with Zhejiang Hisun Pharmaceuticals. In each case, the marriage gives the Western partner a seat at the generics manufacturing table, something that might have been anathema 15 years ago. 

Even so, the situation can be dangerous. When GSK gave incentives to doctors and hospital staff to encourage them to prescribe its products, it probably saw the practice as standard for China. But “business as usual” can change fast here, and GSK had the misfortune to have its ethical error exposed just when the government was casting about for a suitable example to hold up to the Chinese business community.

In this environment, the principles of branding become more important than ever. Defining the relevance, differences, and broader social purpose for a pharmaceutical company is both difficult and extraordinarily valuable. A company like Xian Janssen that actively works to incorporate these concepts at every level of its organization is more successful at attracting talent, engaging with audiences, and delivering on promises made. Packaging designed with the user in mind rather than the convenience of the production line will have quicker uptake, better distribution, and stronger presence. 

Our advice to Big Pharma companies, beleaguered as they may be, is that now is the time to redefine and reaffirm what your brand stands for and how your values should cascade through your sales and marketing communications.




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