Pfizer Inc. (PFE) Plans More Alliances in China
2/25/2013 9:09:30 AM
New York-based Pfizer Inc., the world's largest drug company, plans to forge more alliances in China as pharmaceutical companies combat shrinking margins in one of the world's fastest-growing healthcare markets. "We're open for collaboration," says Wu Xiaobing, Pfizer's country manager for China, noting that he's looking for partnerships in the research, manufacturing and marketing of drugs. "If we were alone, it would take such a long time to make our drugs accessible to patients." Foreign drug makers are increasingly turning to local partners to expand their access in China, among Asia's most promising pharmaceutical markets. They are also facing a big wave of patent expirations globally. Pfizer already has a joint venture in the world's second-largest economy with Zhejiang Hisun Pharmaceuticals to develop generic drugs, which dominate China's pharmaceutical sales. Pfizer also has a minority investment in Shanghai Pharmaceuticals Holding Co., one of China's largest drug distributors, and its animal health division has a JV with China's Jilin Guoyuan Animal Health Co. for animal vaccines. Meanwhile, Merck & Co., the world's second-largest drug company, recently formed a joint venture with China's Simcere Pharmaceutical Group to develop and sell drugs. "You can expect to see more momentum going forward," says Jin Wang, a Shanghai-based partner at McKinsey & Co. "Both multinationals and locals are excited by the growth potential in this market, and they are all facing limitations in terms of their portfolio and capabilities, so they're teaming up." As local companies become fiercer competitors, partnering with them is also appealing because of their in-depth knowledge of the China market, according to Mr. Wu. The heightened competition can benefit consumers by improving the overall quality and safety of the drugs offered in China, Ms. Wang says. More than 260 million of the country's citizens suffer from a chronic disease, according to data from China's Ministry of Health.