SHANGHAI - Swiss drug maker Novartis plans to deepen its investment in China this year despite the West's economic downturn, and will expand its research and development center here while launching new drugs in the Chinese market, according to high-level Novartis executives.

The company's China unit, which covers patented drugs, generics, healthcare products and vaccines, generated turnover of RMB 3.3 billion last year, a 29 percent jump from 2007. Novartis expects to post 30 percent year-on-year growth in 2009.

As of the end of last year, Novartis had invested more than RMB 3 billion in China. This year, the company will channel more funds into R&D and marketing in China, according to Joseph Jimenez, CEO of the Novartis Pharmaceuticals Division.

Jimenez declined to provide details on the amount of this year's investment in China.

"China is an attractive market for pharmaceutical companies and we are continuing to invest with the hope of continued strong growth in the future," Jimenez told PharmAsia News. "We are looking to expand our field force in order to increase coverage at both big hospitals and community centers and improve relationships with customers and stakeholders through programs with health authorities, hospitals and pharmacists and key account management."

"We are also working to enhance our portfolio with strategic marketing and successful launches," said Jimenez. "In addition, we intend to improve talent development and retention in China while fostering a culture of compliance and accountability."

"We are continuing investing in our R&D center in Shanghai and it's a long-term and scaled investment," said Jimenez.

Novartis China CEO Jeffrey Li said last year the company would increase its China marketing team by 20 percent. The goal is to post a 30 to 40 percent annual increase in its China business for the next five to ten years, according to Li.

The company's China R&D center was set up in November 2006 at the Zhangjiang Hi-tech Park in Shanghai, and is one of three core Novartis research facilities around the world. The other two are in Basel, Switzerland and in Cambridge, Massachusetts.

The Shanghai R&D outpost focuses on infectious diseases, such as hepatitis B, and on cancer in China and across Asia. The $100 million facility is slated to combine Western technology and drug-discovery approaches with the insights of traditional Chinese medicine.

Novartis executives said that the company plans to launch eight new products in China in 2009, including Exforge (amlodipine/valsartan) for high blood pressure, Aclasta (zoledronic acid) for osteoporosis, Tasigna (nilotinib) for Philadelphia chromosome-positive chronic myeloid leukemia, Lescol XL (fluvastatin) for cholesterol and Myfortic (micophenolic acid) for kidney transplants.

Novartis projects that emerging markets will account for 20 percent of the company's total global prescription drug sales by 2020, an increase from 8 percent today.

"You are going to see us shift our center of gravity toward some of the faster growing markets, significantly expand the size of our sales forces and step up clinical development activities in an effort to take businesses already growing rapidly to even higher levels," Jimenez said in a statement.

With China's medical system reforms in the works, the company plans to strengthen cooperation with the Chinese government and hospitals.

It will help train doctors and educate patients at the clinics, as well as popularize diagnosis and therapy standards for frequently encountered diseases.

Novartis will also focus on physician training in common chronic diseases, such as cardiovascular diseases.

Novartis is joining an array of other multinational pharmaceutical outfits that have opted to continue investing in China despite the global crisis.

Novo Nordisk expects to begin operations in a $400 million insulin manufacturing facility in Tianjin by 2012 (Also see "Novo Nordisk To Construct One Of World’s Largest Insulin Plants In Tianjin, China Biopharma Center" - Scrip, 11 November, 2008.).

GlaxoSmithKline plans to double the number of researchers it has in China. GSK's Shanghai-based R&D operation will grow from a staff of 170 today to 350 by the end of this year.

"We are investing heavily at the time when others are starting to pull back. We are doing it because we believe if we invest now, at the end of the recession and along with the continuing economic acceleration of China, we will emerge as a much stronger company," Novartis China CEO Li said.

-Ying Huang (pharmasia@elsevier.com)

Novartis To Step Up Investment In China

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