AstraZeneca ($AZN) is the latest Big Pharma to unveil plans for emerging-markets manufacturing. The company said it will spend $200 million on a new plant in China that will turn out injectables and oral drugs for the domestic market. It's AstraZeneca's biggest-ever investment in one production facility, the company said.
Like its global pharma rivals, AstraZeneca has pinpointed China as one of its biggest growth markets for the next several years. The new facility will help AZ "reach out to more of the estimated 900 million people...who have had less access to high quality medicines," Mark Mallon, president of the company's Chinese operations, said. The plant is scheduled for completion in 2013.
The Chinese expansion also illustrates another trend in Big Pharma: cutbacks in the mature markets of the West, mirrored by growth in Asia and other developing regions. AstraZeneca announced last week it would be cutting 400 jobs from its U.S. commercial operations after several years of downsizing around the company.
Some other examples: Eli Lilly ($LLY) has shrunk its sales force in the U.S. while pumping up in China by the hundreds; Pfizer ($PFE) announced plans to hire up in China by 900 reps while cutting thousands of jobs elsewhere; Sanofi ($SNY) expanded its commercial operations in China while trimming sales-and-marketing in the U.S. and Europe. Meanwhile, Pfizer has been scaling back manufacturing facilities in the U.S., but it just agreed to build a new plant in Saudi Arabia. And Novartis ($NVS) recently announced a renewed cost-cutting push--some of which will target manufacturing--while it's in the process of spending $1 billion on Chinese manufacturing and R&D.
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