Big Pharma in China—The Driving Forces behind Their Success—A Qualitative Analysis

Hind-Louiza Chitour

School of Management, Wuhan University of Technology, Wuhan, China.

DOI: 10.4236/chnstd.2013.24028                

Abstract

China has become a major player in the pharmaceutical industry within few years, leading the production and export of API worldwide and representing a double digit growth sector in terms of healthcare services needs in the next 5 to 10 years and predicted to be the largest Pharma market in 2020. To enter this market, Big Pharma companies have adopted different strategies to tackle the challenges specific to the coun- try in terms of size, specific needs sales channels and logistics adjustments. In this paper we will discuss the market entry strategies adopted by big Pharma in China. Major Pharma players have opted for either the aggressive M&A approach to penetrate the Chinese market, gaining local insight through the acquisition of local Pharma manufacturers and the production of generic drugs in China; or for some others an innovation focused strategy through developing its R&D structure in the Mainland to capitalize on the local talent pool and the cheaper operating costs the country offers. For this paper, we have applied a various set of tools to gather data: personal observations used as primary data, reviewed secondary data: Government reports, Pharma reports, studies and related scholarly articles, press releases and specialized websites. We performed PEST analysis to demonstrate how the socio economic environment in the country and the other external factors characterizing the Mainland all contributed to the success of foreign multinational pharmaceutical companies in China.

Keywords

Big Pharma; Outsourcing; China; PEST Analysis

Conflicts of Interest

The authors declare no conflicts of interest.

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