Chinese pharma's a challenge on all sides

China's drug market poses a challenge not only for Big Pharma, but for the Chinese government itself. China's health minister tells the Wall Street Journal that drug sales have to be completely reformed there, because doctors have been paid commissions on drugs they prescribe. The solution so far: Setting prices for 300 key drugs.

That's brought prices down 30 percent to 50 percent, which might be good for China's efforts to keep costs in check as it completely overhauls its healthcare system. But it's not so good for drugmakers storming the market. Some companies have been counting on selling their branded generics at a premium to generics, but the government could thwart that strategy, CNN Money reports.

In fact, the pricing move is just one of the unexpected challenges pharma companies face in China. There's also the competition for good sales people; big drugmakers such as Eli Lilly and Sanofi-Aventis are all staffing up at the same time.

"There's a bit of growing uncertainty and unease, because there are changes going on and people aren't quite sure where they're heading," says ZS Associates' Chris Arzt tells CNN. "If you'd have asked me a year ago, I'd say people are bullish," he says. "They still are--but there's a bit of an element of worry."

- read the WSJ story
- get the article at CNN Money

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