(Yicai) Jan. 8 -- Multinational pharmaceutical giants, including GSK and Sanofi, are changing their China strategy and moving sales of mature drugs to local partners in order to transfer more resources to new drug development to cope with the intensifying competition.

The adjustments should help foreign companies develop in the Chinese sector of innovative medicines more efficiently, industry professionals said to Yicai.

Examples are many. London-headquartered GSK recently axed its whole sales team for Lamictal, a drug used to treat epilepsy and bipolar disorder, in China and sales will be transferred to local agents, Yicai learned from a company insider.

Last month, Sanofi gave local partners the responsibility of sales of various existing products while laying off some in-house salespeople. Meanwhile, Pfizer handed a local partner the exclusive rights to import, distribute, and market a vaccine that hit the Chinese market in 2016. 

Moreover, AstraZeneca recently adjusted its Chinese sales team after Pulmicort, an asthma medication, and many other high-demand products were included in the bulk-buy program of the Chinese government.

Multinational corporations have recently been downsizing their drug sales teams in China in general, per a person who works in sales at a large domestic firm. MNCs need to focus more resources amid intensifying rivalry in the innovative drug market, shorter product lifecycles, and a broader implementation of the centralized drug procurement program, the insider added. These big firms' advantages in some existing drugs are no longer as notable as gaps between them and their local rivals are becoming smaller, per the same source. 

An executive at a multinational firm told Yicai that the recent sales team adjustments are quite normal and transferring rights of low-profit medicines to local firms is sensible. Big cities and big hospitals are not the only places to sell products as the Chinese market is enormous, the person said, adding that by commissioning rights to local partners with cost advantages, foreign firms can promote their mature products with high recognition, affordable prices, and high quality to lower-tier markets, drug stores, and private hospitals.

The government’s bulk-buy program put multinational drug firms under operating pressures to some extent but it did not impact their overall profits much, an ex-executive at Sanofi China and Boehringer Ingelheim China told Yicai.

Besides the increasingly localized strategy, foreign firms are looking into acquisitions of locally made innovative drugs, as well as their developers.

For example, last November AstraZeneca bought exclusive offshore rights to sell a glucagon-like peptide 1 receptor agonist developed by Chinese biotech firm Eccogene for USD2 billion. Last month, it also announced a plan to buy Gracell Biotechnologies, a Nasdaq-listed Chinese firm, for USD1.2 billion to complement its cell therapy line-up.

After over 20 years of development, Chinese drug developers are starting to draw attention from big pharmaceutical firms, and more partnerships are expected, the above-mentioned ex-Sanofi executive said. 

Innovation is GSK's focus in China, Qi Xin, general manager of the British firm's Chinese arm, said to Yicai in an interview during the latest China International Import Expo. GSK will bring more advanced overseas technologies and products to the Chinese market, she added. 

Editors: Tang Shihua, Emmi Laine