Are you in the Pharma Industry? Then, maybe China could be your next big market.
It is not often that I find posts giving specific recommendations on how to enter an industry in China, so I was very excited to read a couple of posts at the China Law Blog about investment opportunities in the pharma industry (both guest posts by Samsara Biopharma Consulting).
The first post shares some market insights:
– There are real pharma business opportunities in China for foreign businesses
– Recent trends: influx of foreign Private Equity (PE) and Venture Capital (VC) firms investing in Chinese pharma companies (including many selling only to China’s domestic market)
– Market Size: around fifty very large pharma companies in China, largely centered in the East, and thousands of SMEs all over the country
– Market Structure: divided for regulation purposes into Traditional Chinese Medicine , small-molecule chemical synthesis drugs and biotech.
– Major Issues/Local Companies: weak quality systems.
– Biggest Investing Threat: investing in Chinese pharma companies that will be unable to comply with with the SFDA’s .
The second posts presents recommendations for pharma SMEs willing to invest in the Chinese market: (main points bellow but plenty of very useful tips in the original post here )
1.-Market Research to assess demand and market insights (key players, …)
2.- Shortlist potential partners (5-10 good candidates) and fax your introduction letter. Their responses will allow you to narrow down to 3-5 companies.
3.-Road Show to China to present project and meet/get to know candidates : team should include CEO, business development head, medical director, and the head of regulatory affairs.
Secure signed Non Disclosure Agreements (NDA) from the Chinese companies before meeting with them.
4.- Settle on the candidate company and begin “courting” them. Problematic points in reaching agreement:
– Who pays the costs to conduct any clinical trials SFDA (China’s Food and Drug Agency) may require and Who will own the data?
– Will you use your own or the Chinese company’s branding scheme?
– Who will be responsible for minimizing fakes/counterfeits/copies?