BloombergEven after a plunge last month that wiped US$46 billion off Chinese healthcare stocks, domestic drugmakers might be far from their floor as a Beijing-led policy shift gathers pace. China’s plan to drive down generic drug prices through a centralized bulk procurement program is set to redraw the industry by forcing its thousands of small generic drugmakers to streamline and consolidate after decades of enjoying outsized profit margins. To survive the shifting landscape and rely less on generics — drugs whose patents have expired — many companies are scrambling to pump money into research and development (R&D). Chinese companies that are already heavily invested in R&D stand the best chance of surviving the new landscape. Among Hong Kong-traded shares, CSPC Pharmaceutical Group Ltd (石藥集團) has 8.14 percent of sales invested in research and Sino Biopharmaceutical Ltd (中國生物製藥) has 6.23 percent.

Source: Taipei Times January 02, 2019 15:56 UTC