China Crackdown Clips Pharma Margins

May 27, 2014


China, which has long been a magnet for big global pharmaceutical companies as growth slows in Europe and the U.S., is cracking down on corruption and pricing, signaling to Big Pharma that the days of easy growth may be coming to an end.

While global drugmakers withhold their China profit figures, a Reuters analysis of the profit margins of 60 listed Chinese healthcare firms suggests profit growth is harder to come by.

The recent high-profile investigations have damaged sales growth, with doctors actively avoiding pharmaceutical reps for fear of being tangled in bribery accusations.

Additionally, as China looks to cut a healthcare bill that is set to hit $1 trillion by 2020, there is a greater incentive for firms to push prices lower to beat rivals to contracts.

Read the Reuters article

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