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Novartis China aims at 1b yuan in OTC drug sales by 2014

By Chen Limin (China Daily)
Updated: 2009-10-20 10:08

Swiss pharmaceutical giant Novartis AG has said it aims to quintuple China sales and be one of the top 5 transnational firms in the domestic over-the-counter (OTC) drugs market by 2014.

The company, which is planning to sell 200 million yuan worth of OTC products in China this year, said it is looking at sales of 1 billion yuan in five years' time.

"We are going to expand in the China market by releasing over 20 OTC drugs by 2011," said Warren Jiang, head of Novartis' OTC division in China.

The company now has three OTC drugs in China, but most of its OTC sales come from only one drug, Voltaren Emulgel, an anti-inflammatory pain-relief gel.

Although Novartis is ranked 4th in the global OTC market with annual sales of $3 billion, its market share in China is small as it entered the OTC market only in 2007.

Novartis may also acquire other local firms to better compete in the Chinese OTC market, Jiang hinted.

"Mergers and acquisitions are our important strategies in the OTC market, especially here in China," said Jiang.

"Now, we are in active talks with potential candidates," said Jiang, adding that its rival Bayer's acquisition of Chinese brand White & Black has enhanced the company's confidence about such opportunities in the country.

Although many home-grown Chinese pharmaceutical companies are less willing to sell their businesses due to the improved economic conditions, Jiang said he was positive about an M&A deal in China.

If such a deal is reached, Novartis may further deepen control in the China market and establish more channels for its OTC business.

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The company has set channel development as its prime goal this year. It would triple the number of sales representatives and expand distribution channels, which now cover 90 cities, this year, the company had said earlier.

Novartis is also keen to introduce more OTC drugs, which have gained considerable popularity in Western markets, into China, Jiang said. The key drug categories include analgesics, cough, cold, skin care and smoking-cessation medicines.

Jiang said Novartis would go in for a publicity blitz for Voltaren Emulgel, its global blockbuster, starting next year to further boost its sales in China.

"China has been a very attractive market," said Jiang. "For us, to develop in China is more important than making profits."

The Chinese OTC market, worth anywhere between 100 billion ($14.65 billion) and 200 billion yuan, is growing by 18 to 20 percent annually, said Peng Haizhu, an analyst with Huatai Securities. The bigger pie may attract more players into the OTC market, he said.