Companies

Novo boosts China funds

By Frances Schwartzkopff (China Daily)
Updated: 2011-06-03 14:15

COPENHAGEN - Novo Nordisk A/S will boost investment in China to preserve its dominance in the world's largest market after rival Sanofi SA made a new foray amid an effort by the government to improve health services.

"We don't fear any competition," said Kaare Schultz, chief operating officer of Bagsvaerd, Denmark-based Novo, the world's biggest maker of insulin.

Novo produces two-thirds of the insulin used in China, where the latest study shows that one in 10 people has diabetes. Sanofi said last month that it will train 10,500 doctors and experts in diabetes care as part of a program led by the Ministry of Health to curtail the spread of the disease.

Related readings:  Novo Nordisk aims to double R&D staff  Danish pharmaceutical company to double R&D staff in China  Denmark eyes more Chinese investments  More leading Chinese companies open business in Denmark

Novo will respond by boosting its presence as needed across all aspects of the market, from sales to production to patient care, Schultz said on Tuesday. The company won't make acquisitions, he said.

"You will see more manufacturing. You will see more education," he said. "You will see more training of patients. You will see more research locally."

The Chinese market is growing in importance for drug makers as its economic growth supports greater investment in healthcare while US and European providers look to cut costs. Last month, Novo said it probably will not be able to raise prices in the United States as healthcare providers demand greater rebates from drug makers.

Chinese sales grew at a faster rate in the first quarter than in any other region, Novo reported on April 28. Revenue rose 34 percent to 1.38 billion Danish krone ($267 million) compared with overall sales growth of 15 percent.

Amputations

The Chinese diabetes drug market will increase fourfold by 2015 to more than $2.8 billion from $642 million in 2009, the International Market Analysis Research and Consulting Group said in a report in September. More people are moving from rural areas to cities, changing their lifestyles and eating habits and triggering a rise in obesity rates, the consulting group said.

Being overweight or obese significantly increases the risk of contracting diabetes, a condition marked by rising levels of sugar in the blood. When untreated it may result in heart and kidney problems and blindness, and may require amputations.

Novo's share in the Chinese market, by value, fell after Paris-based Sanofi introduced its 24-hour insulin Lantus in 2004, according to IMS Health Inc figures, which Novo provided at its capital markets day last month. Novo's share of synthetic insulin dropped from about 70 percent in 2006 to 53 percent this year, the figures show.

"That is due to the fact that Lantus has been launched at a very high price point," Schultz said.

Looking at the volume of insulin sold, "we have not lost market share, and we are still at a very, very high level".

A 2009 report by the International Diabetes Federation estimated that 4.2 percent of the population in the Chinese mainland had diabetes.

Bloomberg News