BCG_New_Rules_for_Winning_in_Chinaxs_Pharmaceutical_Market_Jan_2014.pdf

New Rules for Winning in China’s Pharmaceutical Market The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for- profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep in sight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable compet itive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit . January 2014 John Wong, Chun Wu, and Magen Xia New Rules for Winning in China’s Pharmaceutical Market 2 New Rules for Winning in China’s Pharmaceutical Market AT A GLANCE The pharmaceutical market in China is in the midst of a fundamental shift that will dramatically alter the winning strategies of both multinational corporations (MNCs) and local companies. Health Care Reform Is Remaking the Market China’s government is using various measures to reform health care, including compressing pharmaceutical prices and enhancing insurance coverage. Local Companies Are Increasingly Competitive The quality gap between products manufactured by MNCs and those made by local players will narrow. And consolidation is yielding more-formidable local companies. Strategies for Success Must Change Market reforms will put pressure on previously fast-growing drug segments—in particular, the off-patent-product portfolios of MNCs. The Boston Consulting Group 3 The pharmaceutical market in China will continue to grow at a rapid pace. The rules of the game are being rewritten in the pharmaceutical market in China. Some basic truths about the Chinese pharmaceutical market will rem