[ET Net News Agency, 25 September 2019] China's pharmaceutical market will be an
important source of growth for the entire global pharma industry over the next five years
as regulatory reforms and improving healthcare coverage fuel the country's growing demand
for innovative drugs, Moody's Investors Service said today in a new report.
Companies with a major China presence already will most benefit thanks to their
experience navigating the complex Chinese market and their established sales channels.
These include the Upjohn division of Pfizer Inc. (A1 under review for downgrade),
AstraZeneca PLC (A3 stable), Sanofi (A1 stable), Bayer AG (Baa1 negative), Novo Nordisk
A/S (A1 stable), Novartis AG (A1 stable), Roche Holding AG (Roche, Aa3 stable).
"While the credit positive effects will initially be limited, domestic regulatory
reforms will fast-track the roll-out of innovative drugs, which will favor specialty
pharma-focused players like Merck & Co, Roche and Bristol-Myers Squibb Company (A2 under
review for downgrade)," said Knut Slatten, a Vice President and Senior Analyst.
While strong volume growth is expected for the growing number of drugs included on
China's National Drug Reimbursement List, inclusion on the list often implies heavy
discounting, potentially placing pressure on profit margins unless offset by volume
growth.
Long term, Chinese companies will increasingly develop into competitors both on the
domestic market and internationally and global competition in biotech drugs will intensify
as China increases its focus on biotechnology. (KL)