Pharma companies vying for China's grassroots drug

　　Shanghai. April 6. INTERFAX-CHINA - Pharmaceutical companies are increasingly concentrating their efforts on China's emerging grassroots drug market given that the ongoing health care reform has placed a large emphasis on grassroots medical institutions.

　　In recent years, pharmaceutical companies such as Beijing Double Crane Pharmaceutical Co. Ltd., Shandong Lukang Pharmaceutical Co. Ltd., Tianjin Tasly Pharmaceutical Co. Ltd. and Shanghai Hutchison Pharmaceuticals Ltd. have started focusing on developing the grassroots medical market in China. Their marketing strategies mainly include launching training programs for doctors from township clinics and community health medical institutions as well as setting up grassroots sales networks.

　　Double Crane Pharma's sales network covers 600 counties in China, with at least one sales representative in each county responsible for the company's marketing efforts. The company sold more than 900 million tablets of its antihypertensive drug Jiang Ya Ling Hao in 2009, as compared with about 800 million tablets in 2008.

　　In 2009, Lukang Pharma achieved over 40 percent growth in penicillin product sales in the grassroots drug market, marked by a strong growth momentum.

　　Zhejiang Conba Pharmaceutical Co. Ltd. launched a Grassroots Doctors Club campaign in 2006, which aims to better educate doctors in grassroots medical institutions on drug use. Guangdong Huanan Pharmacy Ltd. recently started promoting its brand in rural areas using outdoor advertisements and distribution of product brochures at markets.

　　"China's grassroots drug market is growing fast and brand name generic drug manufacturers could very well become the winners in this market," Guo Fanli, a pharmaceutical analyst from Zhenzhen Zhongzhe Investment Co. Ltd., told Interfax on April 1.

　　Not surprisingly, foreign pharmaceutical companies are also vying for a slice of China's grassroots drug market. Starting June 2009, Bayer HealthCare has worked with the Ministry of Health on organizing training programs for doctors from community health medical institutions.

　　"We can already see that foreign companies have formulated new marketing strategies and detailed implementation plans targeted at the grassroots drug market. In fact, no pharmaceutical company in China can neglect the emerging grassroots drug market," Yang Changshun, Shanghai Haihong Group Chaohu C-dragon Pharmaceutical Co. Ltd.'s marketing director, told Interfax on April 2.

　　Bidding procurement exercises for essential drugs in various provinces have attracted both domestic and foreign companies.

　　During Jiangsu Province's drug bidding procurement exercise for grassroots medical institutions at the end of last year, Wyeth, Eli Lilly, and Johnson & Johnson successfully won bids after reducing their product prices. Wyeth set its dextromethorphan hydrobromide at RMB 15 ($2.19), despite its drugstore price of RMB 19 ($2.78) while its caltrate was set at RMB 49.27 ($7.21), as compared to RMB 60 ($8.78) in drugstores.

　　"Whether foreign drug companies will see rising sales volumes will depend on if they can tailor their doctor education marketing campaigns in large cities to fit grassroots medical institutions and if their products face sharp competition from domestic products," Yang said.

　　Furthermore, foreign drug companies which won bids should not rest on their laurels but instead must continue their marketing efforts including collaborating with agents and setting up dedicated marketing teams, Yang added.

　　According to Guo, there are also opportunities for foreign companies in the grassroots non-essential drug market since there are rural residents who can afford higher-priced drugs too.

　　In the meantime, drug companies will need to keep tabs on whether their drugs which did not make it onto the national essential drug list are eventually included in the provincial-level essential drug lists," Yang said.

（实习编辑：马丽诗）