French firm bets on growing demand for drugs as population ages

Marc de Garidel, chairman and CEO of Ipsen Group, says the French drug maker wants to improve Chinese patients' lives through its expertise in chronic diseases. Provided to China Daily

Ipsen, a French pharmaceutical company, is looking to expand its presence in China as demand in the country for drugs to treat chronic diseases continues to rise.

Chronic diseases, which typically last more than three months, caused 85 percent of deaths in China, according to the Ministry of Health. Expenditures in treating these accounted for 69 percent of the country's total healthcare costs in 2011. Common chronic diseases include cancer, diabetes, arthritis, asthma, chronic obstructive pulmonary disease and HIV/AIDS.

About 10 million people in China have suffered from chronic diseases every year since 2002. Prevention and the control of chronic diseases is one of China's major healthcare reform tasks leading up to 2020.

In recent years, Ipsen has increasingly brought its technical resources and funds to China in its aim to expand in the Middle Kingdom. Its strategy this year includes opening an operational office with more than 60 employees in Beijing to cover the Asian continent, an operations center that will seek collaborative measures with local institutes and an expansion of clinical trials in China.

The Chinese government plans to spend a total of 400 billion yuan ($64 billion; 48 billion euros) by 2020 in a number of healthcare projects, including improving the treatment of chronic and heart diseases, preventing psychological diseases, establishing a digital public health information network, innovating medical devices and developing traditional Chinese medicines and the training of general practitioners.

"We are impressed by the Chinese government's effort to improve patients' lives and we discovered the long-term 2020 plan has set a goal of 7 percent of the (Chinese) GDP (will be) spent on healthcare, compared to the 4 percent before. We see the continuous push to address chronic diseases," says Marc de Garidel, chairman and CEO of Ipsen Group.

As its economy has rapidly grown, China is witnessing a growth in various chronic illnesses, many of which health experts say is being caused by a rapidly evolving lifestyle of less exercise, eating out and increasing stress.

Environmental pollution, they say, is also contributing to the growing number of chronic diseases.

De Garidel says the French drug maker's drugs are highly specific to the genetic differences between Chinese people and people from other countries. He says the company has done research to understand the reasons for the generic differences, accounting for lifestyles and dietary habits.

He says as lifestyles in China change due to the rise in buying power, the lives of Chinese people will become increasingly similar to a Western lifestyle. In turn, it will become more likely that the diseases found in China are similar to those in the United States.

"The Chinese government has already identified 12 diseases where they want to invest more. Ipsen wants to participate in improving patients' lives through our expertise in prostate cancer, gastrointestinal diseases and other disease fields," he says.

Emerging markets have become an increasing source of the company's revenue. In 2011, Ipsen's annual growth in China exceeded 15 percent. De Garidel says that though the company's emerging markets of China, Brazil and Russia all face a potential slowdown under the current economic landscape, room for growth - based on the nations' population and the rising demand for medicine - is still there.

The Ipsen CEO says the company also plans to continue building partnerships and expanding outreach in second and third-tier cities of China.

"Ipsen is a medium-sized company. Thus, we are prudent and prefer to cooperate with local partners such as medical universities and research institutes," says Claude Bertrand, chief scientific officer at Ipsen. "In addition to clinical trials, we will do more early-stage (research and development) in China with our partners for both the Chinese market and also our business globally."

The company opened a representative office in Tianjin in 1992 and established Beaufour-Ipsen (Tianjin) Pharmaceutical Co Ltd, a subsidiary of the Ipsen Group in Tianjin municipality in 1997 to produce drugs to treat diarrhea.

The company is in the process of preparing clinical trials for two drugs called Somatuline Autogel and Dysport to treat endocrinological and neurological diseases, respectively.

In 2011, global sales reached 1.1 billion euros ($1.42 billion) and its expenditures on research and development exceeded 250 million euros. The company has total worldwide staff of 4,500 and operates in more than 100 countries. It employs 700 people in China, its second-largest employee base after France.

"China has become our second-biggest market in the world and contributes about 10 percent of our group's overall sales growth," says Eric Bouteiller, senior vice-president of Ipsen's Asia operations and chairman of the China division. The company now has five branches in China, located in Beijing, Wuhan, Shanghai, Guangzhou and Chengdu.

"Since we set up the headquarters in Beijing to lead the Asia operations, the Asian cluster is clear. We are also going to expand in the Asian territories from Beijing. We see big potential in China and other Asian markets such as Japan, South Korea and Southeast Asian countries," Bouteiller says.

Zhou Baosen, a professor at the school of public health at the China Medical University in Shenyang, Liaoning province, says as China's large demographic of elderly people grow older, the demand for drugs to battle various chronic diseases will surge in the coming decades.

The Annual Report on China's Pharmaceutical Market (2012) by the Chinese Academy of Social Sciences in Beijing predicts that an additional 170 million Chinese will be the age of 50 or above by 2020.

The report also forecasts the total value of China's pharmaceutical market at $370 billion (278 billion euros) by 2020.

"In France, buying healthcare products for parents or friends may be weird. In China, however, it is an appropriate way to express love to parents and close friends," Zhou says.

The current retirement age in China is 60 for men and 55 for women. Zhou says China's elderly will form the prime consumer group for both domestic and foreign chronic drug makers.

zhongnan@chinadaily.com.cn

(China Daily 01/25/2013 page15)