China, Japan, and the rest of Asia Pacific is a really important part of the global healthcare system. If you think about it, nearly half of the world's population is in the region. So if you're in healthcare and if you're not in Asia Pacific, then you're really not a global healthcare company. Specifically, China is the second largest pharmaceutical market in the world, as well as the second largest GDP, second largest med tech market. So thinking about how an international company should be in the region and in China is quite relevant.
China is also a challenging market. In the news, you may have heard about all the pricing pressures, whether that's for innovative products negotiating for reimbursement or the volume based procurement that is affecting the genericized products. Along the way, we hear about intense competition, the rise of Chinese companies, the entire move to digital, all the cybersecurity issues, as is in many markets around the world.
That means the competitive landscape now in China has also changed. It's no longer that if you just land here with a good product, you'll have a great opportunity, great pricing, and great prestige. So companies need to think about sort of the increased competition, How do you get onto the market fast, roll out fast, and capture as much value as you can using all the tools at your disposal, whether that's the sales force, whether that's increasingly digital mechanisms for omnichannel development, for some of the more chronic products and primary care products, thinking about the retail component of your strategy in order to be really holistically successful in the China market.
If your goal is to be an integrated global biopharmaceutical company, coming into China directly as a greenfield may make sense. If you would like to enter, with a partner, China also has the opportunity to support that, if you want to, for example, license it, to a local biotech, a Chinese company, or even multinational in China. Or there could be options in between.
But realize that your first step doesn't have to be a big step. You could, for example, just to choose to start with clinical trial, allowing China to be part of your international multicenter global trials. So therefore, you move your timeline along. So this way, you choose to commercialize or to partner out your product in the region or globally, the timeline is advanced.
Venture capitalists are also interested in supporting companies wishing to enter the field. There are many options to try. So what do you have to lose? What are your opportunity costs in participating this vibrant ecosystem and the second largest market in the world?
