The China drug market is getting trickier, but that is not stopping the big names of biotech and pharma from plowing ahead with tie-ups of various kinds to sell into the enormous market. Amgen ($AMGN) today said it is ready to attack the Chinese market with one of its cancer drugs.
The biotech has created a joint venture with Chinese drugmaker Zhejiang Beta Pharma to sell its colon cancer treatment Vectibix. The deal still needs all of the sign-offs by authorities in China, but the plan is for Zhejiang Beta to own 51% of the JV and Amgen 49%. "This joint venture brings us one step closer to providing Chinese patients with Amgen's medicines and supports our strategy of expanding in key, fast-growing markets," said Anthony Hooper, executive vice president at Amgen.
Like its competitors, Amgen is making a big push into Asia. In January it said it had landed on Singapore as the location for a $200 million biologics plant. The market holds tremendous potential, but even as some companies are just getting started there, the depth of that potential is changing. Former health minister Chen Zhu just this week said Big Pharma will need to give the government a break on drug costs if it expects access to the "huge market." That means offering discounts beyond the price cuts the government is mandating on its list of 317 essential drugs. Novartis ($NVS), for example, made a deal in Jiangsu province to give the government three free doses of cancer treatment Gleevec for each dose it buys. That discounts the annual cost to about $12,000 from $77,000 without triggering price comparison cost cuts in other countries.
Such concessions don't seem to be dissuading other companies from wanting to get into business there. Teva ($TEVA) CEO Jeremy Levin said this week he thinks his company, which has been all about selling drugs cheaply, should do quite well there. "Our portfolio more closely matches the needs of that nation than nearly any other company in the world," he said at the Reuters Health Summit this week. "As the healthcare system changes in China, we certainly will be looking to embark on ways of bringing what the Chinese government and Chinese companies want." Of course, Amgen will already be there.
- here's the release