Booster shot

As the Chinese government is poised to spend more on its community hospitals, foreign investors are also eyeing the emerging market and Swiss pharmaceutical firm Novartis is in the forefront of this activity, says Li Zhenfu, president of Novartis China.

"China's reform in the healthcare sector has influenced multinational pharmaceutical companies' strategies in the country," he says.

Li's belief in China's community healthcare reform stems from a report quoted by Premier Wen Jiabao and submitted to lawmakers this month that says the nation will "focus on improving the urban community-based medical and health service system".

Li says he believes the central government will gradually increase its support to community hospitals. "So strengthening cooperation with community hospitals will become an important part of Novartis's developing strategy," Li says.

The company is eyeing the vaccine market in China, too.

"We are determined to develop into a major enterprise in research and development and promoting vaccine products in China," says Ni Xiangyang, head of the company's vaccine business in China.

He expects Novartis's vaccine business in China to at least double in 2008 from last year.

Novartis's vaccine business in China was established in 2006. It gained a year-on-year 55 percent increase in 2007.

The pharmaceutical giant saw its overall sales in China jump 24.8 percent year-on-year in 2007 to 2.58 billion yuan, while its global sales volume increased some 8 percent in the same period to $39.8 billion.

The Chinese market and other emerging Asian and African markets are becoming more and more important to Novartis as its businesses in the United States are hit by generic competition and a product withdrawal from the market.

"First-half 2008 results in pharmaceuticals is expected to show ongoing negative impact of lost net sales in the US; new growth phase is set to emerge in second half of the year," the company says in its headquarter Basel.

But Li expects the company's sales in the Chinese market continue to increase by another 20 percent in 2008 from a year ago.

Novartis will expand its research and development facility in Shanghai this year, one of its major moves to develop the fast-growing Chinese market and to take advantage of China's low-cost scientific talent.

The center's primary focus will be the causes of cancer endemic to Asia.

Li says the company is scheduled to launch a new phase of the research center soon.

The center, which now employs about 100 people, is expected to employ up to 800 scientists when it is completed.

"It is expected to become the company's third largest R&D center after the research centers in the United States and our home market in Switzerland," Li says. "Research capability is always the core of the company."

(China Daily 03/24/2008 page6)