Business News Agency January 17th On the one hand, multinational pharmaceutical companies have a lot to gain from the Asian market. On the other hand, Asian pharmaceutical companies are also expected to grow globally.

In recent years, due to the impact of the global economic crisis and other issues (such as the expiration of product patents and the reduction in the number of R&D products in the industry), large pharmaceutical companies have suffered a lot of fate. These changes have prompted them to find new market directions and business opportunities beyond the traditional borders. Many large pharmaceutical companies are attracted to Asia, mostly because of the unexplored potential in the region, lower operating costs, a large population base, and the rising incidence of common diseases such as cancer and heart disease.

M & A intentions clear

In short, Asian regions provide a huge business opportunity for multinational pharmaceutical companies, but they still have much work to do. Reynold Mooney, head of consulting for life sciences and healthcare at Deloitte, explained that Asia is not just a single market but a diversified market. As each market has its unique characteristics and power, multinational companies need to adjust their strategies appropriately in specific markets in order to participate effectively in competition.

Taking Sanofi-Aventis as an example, it implements brand localization through acquisitions in every market in Asia. In early 2010, the company signed a cooperation agreement with China's Hangzhou Minsheng Pharmaceutical Group. The French company also signed a licensing deal with Glenmark Pharmaceuticals in Mumbai, India to develop and commercialize new compounds for the treatment of chronic pain. Considering that the market for osteoarthritic pain is about 4 billion U.S. dollars and the patient population is 40 million, this agreement is of great significance to Sanofi-Aventis.

Similarly, Bayer AG has launched some high-growth therapeutic drugs in the Chinese market, such as the diabetes drug Glucobay and the hypertension drug Adalat. Today, the Chinese market has already accounted for 3% of Bayer’s revenue.

In fact, many multinational pharmaceutical companies are beginning to explore ways to enter the Asian market. Mooney said that taking into account the rapid development of the Asian market, multinational pharmaceutical companies can gain early access as soon as possible, which will give them the opportunity to gain experience and develop together with the Asian market.

India is also a market that such a multinational pharmaceutical company wants to focus on, because the country has low-cost advantages in production, research and development. Over time, the Indian market has matured and foreign pharmaceutical companies will have to build their own sales and marketing capabilities. However, Mooney pointed out that foreign companies' success models in the Asian market will vary, depending on their market entry strategy.

Local policies bring opportunities

Interestingly, the policies formulated by governments around the world are crucial to ensuring that foreign companies succeed in Asia. When China implemented open-door policies and socioeconomic reforms, it attracted a large amount of foreign capital for its pharmaceutical industry and invested in fixed assets. The Chinese government promised to invest 125 billion U.S. dollars in health care infrastructure and universal medical insurance by 2011, which has aroused the interest of foreign companies.

Mergers and acquisitions (M&As) trend also began to appear in the Japanese market. During the Abe administration, new laws have opened the door for foreign companies to acquire Japanese companies. This move paved the way for the development of certain areas, such as the development of drugs for the aging population of Japan and the production of generic drugs. In addition, the Japanese government's strong push for the development of the generic pharmaceutical industry has attracted many foreign pharmaceutical companies to enter the country. For example, India’s Lupin Corp. entered the Japanese generics market by acquiring 80% of the shares of Japan’s Kyowa Pharmaceuticals.

Despite this, there are many pharmaceutical companies that are not doing business in Asia. Only some large companies seem to have achieved practical results. In early 2010, Pfizer commented that the company expects its Chinese business will grow by at least 25%. Pfizer has plans to establish more partnerships and expand its sales force (many of whom will be trained doctors). By 2011, this team will increase from 2,300 representatives in 177 cities to 3,200 in 252 cities.

Pfizer will also team up with Japan Takeda Pharmaceuticals to sell the latter's blockbuster diabetes drug Actos in China. On the other hand, Novartis invested US$1 billion in R&D funds in China and acquired an 85% stake in a privately-held vaccine manufacturer in China.

Jan Williem Eleveld, IMS Health's vice president of consulting and services for the Asia Pacific region, said that at present, many foreign companies are still in a catch-up state and they are exploring how to enter the Asian market. Some companies see M&As as a means to increase Asian business.

Asian companies yearning overseas

In the long run, in Asia, both local companies and foreign companies may benefit from global cooperation. As Pieter de Geus, vice president of strategic business development at DSM Pharma Cluster in the Netherlands, put it, “Overall, the professional sales and marketing of multinational corporations (MNCs) will increase the overall marketing practice for local companies. To promote high-end and efficient research and development work, the local intellectual property protection environment will also be improved.” Pieter de Geus pointed out that the presence of multinational companies will also promote the development of generic drugs market.

Eleveld added that multinational companies will support the wider use of innovative drugs in Asia to meet unmet medical needs in the region, which will be a good momentum for patients and the government. This will also provide local companies with opportunities to help their foreign counterparts through joint sales of products.

Interestingly, many Asian companies are seeking to increase their visibility in overseas markets, although these countries have not yet seen a more precise regional pharmaceutical company or multinational pharmaceutical company. He is trying to increase his overseas business, including Xiansong Pharmaceuticals. He has introduced technology licensing for oncology drugs and clinical trials in the United States. There is also a Chinese biotechnology group company that also strives to become a leader in global vaccine production.

Mooney said: “We expect Asian companies to perform well in overseas markets. Over time, we certainly expect them to dominate the market and launch innovative products at low prices to cater to the US and European markets. demand".

In the long run, in Asia, both local companies and foreign companies may benefit from global cooperation. Asian companies are also seeking to increase their visibility in overseas markets.