J&J moving forward in China despite regulatory crackdowns
- Despite China's economic slowdown and regulatory crackdowns on foreign pharma companies, Alex Gorsky, CEO of Johnson & Johnson, has reiterated his company's commitment to having a presence in China for the long-term.
- Some drug makers have expressed concern that the Chinese government's regulatory restrictions against foreign pharma companies are part of a larger effort to give domestic companies an advantage.
- Recently the Chinese government announced that it plans to eliminate current price caps on some medications. Though the financial impact will most likely be negligible, it signals greater openness towards foreign pharma companies.
Though there was an almost palpable gasp of horror from drug makers when GSK faced the consequences of a bribery probe in 2013 and 2014 (including a $489 million fine), many drug makers are still invested in doing business in China. For example, Sanofi's sales grew by 8.8% in China last year, and Actavis has stated its interest in growing sales of its recently acquired Allergan products. Eli Lilly just initiated a new $456-million partnership with China-based Innovent Biologics. And even GSK is committed to staying the course in China. It looks like most companies are taking the long-term view to working in emerging and dynamic markets with tremendous upside.