Page 344 - 2019 White Paper on the Business Environment in China
P. 344
9 White Paper on the Business Environment in China
combined market share of the mainland’s three largest
drug distributors was 34 percent in 2017, much lower
than 90 percent in the US and 70 percent in Japan. As
the industry consolidates and competition heats up,
Shao also expects large Chinese players with strong
balance sheets to also step up acquisitions of overseas
assets to enhance competitiveness (Ng).
The government is also moving to more quickly
approve new drugs for the market. Now data from
trials conducted outside of China can be used to seek
approval for drug distribution in China, whereas before
companies would have needed to conduct additional
tests in the country. Naturally, in the short term this
will benefit foreign companies that conduct most of
their tests overseas. Multinational pharmaceutical
companies have been turning to China to drive growth,
even though it currently only accounts for a small
percentage of sales. Yet over time, local companies will
become larger beneficiaries, as the Chinese government
continues to use foreign-domestic partnerships as a
requirement for access to the Chinese market. As China
enters the ranks of the high-technology pharmaceutical
manufacturers, it will challenge the market dominance
of US and European pharmaceutical giants. The Chinese
government has seen its aging and increasingly ill
population as both a risk and an opportunity, and
has responded in one of the only ways it knows how:
attempting to upend a global market (Torrey).
344
combined market share of the mainland’s three largest
drug distributors was 34 percent in 2017, much lower
than 90 percent in the US and 70 percent in Japan. As
the industry consolidates and competition heats up,
Shao also expects large Chinese players with strong
balance sheets to also step up acquisitions of overseas
assets to enhance competitiveness (Ng).
The government is also moving to more quickly
approve new drugs for the market. Now data from
trials conducted outside of China can be used to seek
approval for drug distribution in China, whereas before
companies would have needed to conduct additional
tests in the country. Naturally, in the short term this
will benefit foreign companies that conduct most of
their tests overseas. Multinational pharmaceutical
companies have been turning to China to drive growth,
even though it currently only accounts for a small
percentage of sales. Yet over time, local companies will
become larger beneficiaries, as the Chinese government
continues to use foreign-domestic partnerships as a
requirement for access to the Chinese market. As China
enters the ranks of the high-technology pharmaceutical
manufacturers, it will challenge the market dominance
of US and European pharmaceutical giants. The Chinese
government has seen its aging and increasingly ill
population as both a risk and an opportunity, and
has responded in one of the only ways it knows how:
attempting to upend a global market (Torrey).
344
