China's big pharma companies get thumbs-up from Moody's on reform push

Moody's Investors Service has given a thumbs-up to the credit outlook for big Chinese pharmaceutical companies, noting that a reform push by the government for more market-friendly policies and stronger safety guidelines promises sweeping changes to an industry sometimes viewed with suspicion because of safety lapses. "As public medical institutions will consider non-price factors like quality and the ability to supply in bulk, large pharmaceutical companies are usually in more favorable positions than smaller companies that mainly compete on price," said Michelle Zhang, a Moody's vice-president and co-author of a report on the outlook. The report noted that while smaller firms will face cost and other pressures meeting more stringent rules, "the impact to be positive for large pharmaceutical companies as R&D capacity, product strength and economies of scale are their key benefits amid the ongoing medical reforms." Release