GlaxoSmithKline ($GSK) is steaming ahead in China. CEO Andrew Witty (photo) tells Bloomberg he plans to add "a few hundred" sales folks to back up products his company is introducing there. That's on top of 700 hires in 2011. And, Witty said, he'd like to augment his Chinese operations with some M&A, too.
The reason? The same one that's motivating other Big Pharmas in China, i.e., healthcare reforms and market growth. The Chinese government is broadening its field of drug reimbursements, while extending the reach of its healthcare system. As Bloomberg notes, IMS Health forecasts 19% to 22% annual growth in Chinese drug spending through 2015.
Yes, officials have taken steps to lower prices in China, Witty says, but fast-growing volumes will make up for that. "Nobody likes price cuts," Witty told Bloomberg. "But in the overarching context, this is a growing marketplace and the government's initiatives are not just to reduce prices but also to increase access."
Last year, GSK got Chinese approval for three new drugs, including its prostate drug Avodart and blood-pressure treatment Volibris. Now, it's negotiating with authorities to win approval for Cervarix, its human papillomavirus shot, and Rotarix, its rotavirus vaccine. Longer-term, GSK would like to launch "high-technology" vaccines there, and it's conducting R&D into translating traditional Chinese remedies into modern drug therapies. "China is clearly one of our top two or three priorities," Witty says.
- read the Bloomberg interview