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Between massive price cuts and increased innovation, the Chinese market is facing headwinds. In search of innovative organisations, it is shaking up the traditional pharmaceutical scheme, and could quickly foreshadow the future of pharma in the world.

By Fabien Nizon

China is now in the year of the Metal Buffalo. Embodying structure and responsibility, the animal imposes, according to Chinese mythology, a face-to-face encounter with reality. This is a reality that today presents the pharmaceutical industry with much more complex challenges than in the past. Most indicators are green, but they are offset by just as many challenges: sales of innovative drugs are expected to triple by 2025, reaching 960 billion yuan (122 billion euros), according to the IQVIA Institute, but pressure on prices is intensifying: up to -78% on new immunotherapies taken in charge since December. While access to medicines is improving, new purchasing processes and tighter standards are tending to concentrate supply, with the risk of new monopolies. Biotechs are benefiting from exceptional government support, but their transition to commercialisation may be hampered by the fact that buyers do not value their innovation very highly. Finally, despite the immensity of the market, laboratories are organising themselves into smaller, more agile teams to keep up with the frantic pace of reform, relying in particular on digital technology.

"A vibrant market"

"China is a vibrant and dynamic market, exhibiting the characteristics of both an emerging and fully developed economy," notes Pius S. Hornstein, Country Lead, Sanofi Greater China. "Its spectacular market, rapid innovation cycles, strong appetite for digital innovation and dynamic policy changes create both challenges and exciting opportunities." All experts agree that a deep understanding of China and its culture is necessary to keep up with trends and achieve the best results.

"In my experience as an international executive hunter, the most successful candidates are those who are not only interested in working in China, but also in learning about the country, its culture, its people and all other local aspects. Those who develop this interest will be more fulfilled in their work and will progress more in the long run," explains Beryl Chu, Client Partner at Pedersen & Partners Executive Search. Interest is necessary, but not sufficient. "There is a learning curve for any newcomer."

Pius S. Hornstein confirms this: "When I arrived in China in late 2018, I interacted with many people who had been established here for decades, but none of them expected healthcare reforms to be so deep and fast - with the standardisation of measures such as centralized drug procurement (Volume Based Procurement) and the acceleration of the National Reimbursement Drug List (NRDL) update." [...]

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"Foreign talents must be 'localised' in Chinese customs"

Beryl Chu is a Client Partner at Pedersen & Partners Executive Search, located in Shanghai since 2003. As an expert of the Chinese pharmaceutical market and the interaction between local and expatriate talent pools, she details the major trends in the recruitment market.

What are the main areas of talent recruitment in China?

The demands cover a wide spectrum, but the recruitment needs of multinational companies differ from those of Chinese companies. Chinese companies have a constant need to recruit in sales and marketing functions. Conversely, international laboratories which have set up R&D centres in China are intensifying their recruitment in R&D, medical affairs and product marketing. Licensing is also booming, on both the demand and supply sides. In addition, there is a growing need for experts in the field of digitalisation. Covid has stimulated the creation of biotech companies, and at the same time the development of the digital health segment.

Is the pool of qualified candidates growing as fast as the needs of industry?

Yes. Over the past decade, the number of local Chinese candidates trained by multinational companies or abroad has exploded. China is an attractive job market – not only for Chinese candidates, but also for expatriates – because of its rapid growth. In addition to Chinese candidates, the talent pool includes Chinese expatriates returning from abroad, and Europeans and Americans who are looking for new opportunities.

Have the pandemic and border closures slowed talent recruitment?

No. Companies are finding a large local pool of talent, and are no longer dependent on foreign executives. In fact, companies are primarily looking for Chinese executives to run their businesses, even subsidiaries of international laboratories. The Chinese market is complex compared to Western markets, due to deep cultural and linguistic differences; if foreign talent is not “localised” in Chinese customs, they will find it difficult to survive. The local technology conglomerate BAT (Baidu, Alibaba and Tencent) is now a major source of excellent qualified candidates.