Pharma players see faster growth in China amid medical reforms

December 07, 2015 11:54
Medical reforms in China are expected to provide drug makers with more opportunities. Photo: Reuters

Several drug makers are expecting more mergers and acquisitions in China's pharmaceutical sector, which is undergoing a nationwide reform, the Hong Kong Economic Journal reported Monday.

Medical reforms in mainland China will change the ecosystem of the sector and provide more opportunities to small biotechnology and pharmaceutical companies, said Li Xiaoyi, founder and chief executive of Lee's Pharmaceutical Holdings Ltd. (00950.HK).

More mergers and acquisitions are likely, Li said. 

Lee's Pharmaceutical has long relied on organic growth while paying close attention to potential acquisitions, he said. 

Innovent Biologic Inc. chairman Yu Dechao, meanwhile, expects more opportunities to arise in biopharmaceutical development, which aims to  provide the mainland market with more affordable biopharmaceutical medicines.

China lags way behind in this area, Yu said.

He said antibiotics make up only 2 percent of sales of drugs in mainland China, as compared with 40 percent globally.

Nonetheless, this is a segment with an extremely high entry barrier, because of the colossal size of development funds involved, which could be up to US$2 bilion for a drug.

Lack of high-caliber professionals is another issue that has to be resolved, Yu said. 

Meanwhile, Bright Future Pharmaceutical Laboratories Ltd. managing director Chan Chak-yeung said the company will continue to locate its manufacturing base in Hong Kong, which has an environment of fair competition and a good pool of talent.  

Chan said Hong Kong is a good place from which to supply high-end drugs to the mainland market.

[Chinese version中文版]

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Hong Kong Economic Journal