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Demand for pharmaceuticals is rising throughout China, but multinational companies face a daunting task if they are to capture this new potential. The market's magnitude and complexity are the main challenges.
Multinationals will be able to extend their footprint in China only if they broaden their product range, reach deeper into the big cities while exploring new territory, and build larger sales forces in the face of intense competition for talent.
Revenues for patented drugs are expected to grow faster than those of the overall market. In addition, China's skimpy insurance coverage, another problem for companies seeking commercial success in the prescription drug market, may be expanding.
It appears that multinationals are focusing primarily on large hospitals in tier-one cities, which leaves significant coverage gaps for others.
Source: McKinsey Quarterly, http://www.mckinseyquarterly.com
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