International pharmaceutical companies lose their luster? Opportunity for local pharmaceutical companies?

No matter what the face is, multinational pharmaceutical companies in China are starting to decline, which directly causes most of their performance growth in recent years to slow down from more than 20% in the "lying to make money" period to 10% or even lower now For China, the world's second-largest drug market with sales of US $116.7 billion in 2016, the fight between foreign and domestic investment will be more fierce in the future On May 10, Pfizer China internal meeting announced that Shan Guohong, general manager of Pfizer global innovative pharmaceutical, had resigned As soon as the news came out, the industry exploded, mostly worried about Pfizer's future prospects in China After all, as one of the key figures to help Pfizer open up the Chinese market, Shan Guohong plays an important role in Pfizer China According to the public information, Shan Guohong served as the president and vice president of Pfizer in Greater China and was responsible for leading the cancer business in the mainland, Hong Kong and Macao, and achieved good results "In the past five years, Shan Guohong has successfully led the listing of cecre in China and soon made China the second largest market in the world," the media quoted an internal email at that time as saying Another important achievement is that Yinglida, another cancer drug, took only 86 days to pass the complicated approval process of the Chinese government and go on the market " By 2016, Pfizer has divided its global business into two major groups: core healthcare and innovative healthcare In June of the same year, Shan Guohong officially took the post of general manager of Pfizer global innovative pharmaceutical in China, mainly responsible for innovative medical business, covering five fields: tumor, vaccine, immune inflammation, internal medicine and rare diseases Before leaving, Shan Guohong's term of office was less than one year As of the publication, Pfizer did not give any explanation on the reason why Shan Guohong left In the view of the regional director of a biopharmaceutical factory in Northeast China, it is not important to leave for any reason "If you leave, you will leave If you leave, you will no longer play a role Even if you give an official reason, it is probably grandiose What matters is what Pfizer plans to do next " He said Indeed, no matter from Shan Guohong's experience in the industry or his contribution to Pfizer, there is no doubt that his departure has an impact on Pfizer
Du Chen, partner and chief consultant of Beijing Times Strategic Enterprise Management Consulting Co., Ltd., believes that Shan Guohong has been working for Pfizer for more than 20 years, witnessing the history of Pfizer's entry into the Chinese market, its foothold in the Chinese market and its rapid development At the same time, he is also one of the heroes of Pfizer's opening-up in China The resignation of such a person will certainly have an impact on Pfizer's development in the Chinese market 。
But he also admitted that Pfizer is a mature multinational pharmaceutical giant This maturity is not only reflected in the market, but also in human resource management, especially in the cultivation of reserve talents "From this standpoint, Pfizer's short-term performance in the Chinese market will undoubtedly be affected, but in the long run, it is their overall mechanism and adaptation to China that affect Pfizer's performance in the Chinese market Market power If Mr Shan Guohong's resignation from Pfizer China brings him down, it shows that there is something wrong with Pfizer's parent company " As for whether Pfizer will be "narrower and narrower" as the media said after Shan Guohong's departure, no one can be sure now But at least, before Shan Guohong left, Pfizer's weakness in China was already apparent Pfizer is by no means the only multinational pharmaceutical company with such a fate 2 Multinational pharmaceutical companies lost their luster Multinational pharmaceutical companies, including Pfizer, GlaxoSmithKline, Bayer, etc., once had absolute advantages in the Chinese market The advantages of their products and the inclination of relevant policies made them expand arbitrarily without any one According to duchen, it was in the middle and late 1980s that transnational pharmaceutical enterprises really entered China At that time, it still needed many administrative thresholds and negotiation processes to enter China, and it also needed a process of adaptation to enter a new market "Since the 1990s, multinational pharmaceutical companies have shown a huge competitive advantage in the Chinese market in terms of drug quality, efficacy and market operation." He further explained that "channel management, brand management, pharmaceutical representatives and other concepts are unheard of in China; the talents they choose in China are either highly educated personnel in Medical Pharmacy or doctors directly from top three hospitals, which is incomparable to domestic pharmaceutical enterprises." More importantly, with the improvement of the awareness of intellectual property protection, patents also distinguish Chinese local pharmaceutical companies from multinational pharmaceutical companies In the next 21 century, multinational pharmaceutical companies ushered in the best days in China Mr Shi lichen, founder of the third-party medical service platform McConnell, called this period of time "lying on your back to make money" and "as long as you have products, you can make money." But after a decade of dividend growth, things changed by 2012 Most importantly, many patents of multinational pharmaceutical companies have expired, which means that local pharmaceutical companies can produce generic drugs and increase the substitutability of the same kind of drugs At the same time, in 2015, the relevant departments of the state cancelled the independent pricing right of the original research drugs and changed it to market pricing; and the implementation of the consistency evaluation policy of generic drugs also provided guarantee for the quality and level of generic drugs of Chinese pharmaceutical enterprises To a large extent, these have intensified market competition and eroded the market share of multinational pharmaceutical enterprises In terms of new patents with the most core competitiveness, multinational pharmaceutical companies also failed to give much satisfactory results due to the reduction of R & D efficiency In duchen's view, the top decision-makers of multinational pharmaceutical companies are slow and inadequate in understanding the changing Chinese market, sometimes even self righteous, which slows down their rapid development in China And the GlaxoSmithKline incident, which made a splash a few years ago, also lowered the reputation of multinational pharmaceutical companies Therefore, no matter what the face is, multinational pharmaceutical companies in China are starting to decline, which directly causes most of their performance growth in recent years to slow down from more than 20% in the "lying to make money" period to 10% or even lower now 3 If the performance of group slimming declines, you have to think about recruitment For multinational pharmaceutical companies, the simplest and direct way is to lose weight Since last year, companies such as Novo Nordisk, Abbott, MSD and Novartis have made layoffs or so-called personnel adjustments to varying degrees, some more than once "Although some slimming doesn't affect the Chinese market, it will reduce the operating cost of the enterprise as a whole, and it can't be ruled out that the capital saved will be used in the Chinese market, after all, the market demand is huge." Person in charge of the aforementioned area However, when the market dividend disappears, it's obviously not enough to lose weight alone To live well, you need to strengthen yourself In the short term, the research and development of patent drugs can not catch up with each other, so M & A has become another way of redemption According to public information, in May 2016, Pfizer officially announced that it would purchase ANACOR, which is in line with Pfizer's inflammatory and immune product line, with a total cash price of about $5.2 billion Pfizer officials expect the move to boost short-term revenue growth in its innovative drugs business In early August of the same year, in order to improve its position in the field of treatment of rare diseases, Pfizer once again purchased bamboos therapeutics, a private company that develops gene therapy; in the same month, Pfizer announced to purchase medivation, a biotechnology company that produces anti-cancer drugs, for $14 billion Other giants are not willing to be outdone As early as the end of 2014, MSD purchased the pharmaceutical company Cubist with us $9.5 billion; last June, MSD announced another US $1.25 billion acquisition of African pharma In addition, some enterprises also outsource the sales business to Chinese enterprises alone, "that is, multinational pharmaceutical enterprises are only responsible for production and R & D, and sales outsourcing, so if there is a problem, it is the outsourcing party, which has nothing to do with pharmaceutical enterprises Pharmaceutical enterprises only need to receive a fixed sales revenue every year." Introduction to Shi lichen It is true that this approach can pass on risks to some extent, but it is not without harm "If there are many problems, it will also affect the brand itself, which is the same with the opening of franchise stores selling clothes If the outsourcing party deals with drugs in order to compete and reduce prices, it will cause confusion in the whole price system and make more impact on the brand," said the regional head In duchen's view, for the Chinese market, the idea of dumping drugs by multinational pharmaceutical companies in the past is out of time "We should take the Chinese market as the whole market, and settle all aspects of R & D, procurement, technology and production as a whole." At the same time, he also pointed out that with the downward movement of the Chinese market and the change of the hierarchical diagnosis and treatment pattern, multinational pharmaceutical enterprises can also consider transferring the focus from the top three hospitals in cities to county-level and urban community hospitals This has already been implemented by enterprises Last year, Sanofi China proposed that its basic strategy in the future will focus on chronic diseases, primary market and other fields, and will expand more community medical centers and retail drug stores It can be seen that multinational pharmaceutical companies are making every effort to curb the slowdown of performance growth 4 Local pharmaceutical companies are ready to develop The reason why multinational pharmaceutical companies value the Chinese market so much is undoubtedly that they value their future development prospects According to the industry forecast released by IMS, the growth gap between mature markets and emerging markets will continue to increase in the next few years According to the report, by 2018, emerging market drug sales are expected to account for 1 / 3 of global market value, which is in line with the U.S market, with the former contributing nearly 60% of market value growth (excluding rebate and discount) By contrast, markets in all developed countries, including the United States, then contribute only 25% to market value growth The focus of global market growth potential will be clearly on emerging markets "The Chinese market should be the most potential of emerging markets In the past, it will be for a long time to come." Said the person in charge of the aforementioned area At the same time, he believes that the opportunity for local pharmaceutical companies has come, "it's time to work." In fact, although various multinational pharmaceutical companies are taking different measures to alleviate the decline in recent years, it will take time for these measures to really work For example, Pfizer acquired medivation last year, and although it obtained the latter's prostate cancer drug xtandi, the sales of this key drug were far from expected The above regional leaders summed up the current stage of multinational pharmaceutical enterprises as "doze off", "this is not what I said In an industry exchange a few months ago, many peers generally believed that although multinational pharmaceutical enterprises have advantages in scale, product categories, R & D capabilities, etc., at least they are now slow, which is an opportunity for us (local pharmaceutical enterprises) " He said His company has spent a lot of money on talents since the middle of last year to strengthen R & D capacity and increase the production of existing generic drugs Du Chen also pointed out that a large number of talents who have accumulated experience in foreign enterprises have begun to return to local pharmaceutical enterprises, China's pharmaceutical industry policy has gradually become fair, and the special treatment of transnational pharmaceutical enterprises has been cancelled one after another, which will help local pharmaceutical enterprises catch up, but "technology and patent drugs are still the core competitiveness of the pharmaceutical industry