Some of the world’s largest pharmaceutical companies are swooping into China, scooping up medical experts to help market drugs in the region, according to Businessweek. Young Chinese medical professionals, deterred by low base salaries ($300-450/month for new doctors) and high cost of living (such as rent) are more than eager to make the move as well. “As many as 14,000 physicians will join foreign pharmaceutical makers, ranging from New York-based Pfizer (NYSE:PFE) to Paris-based Sanofi (NYSE:SNY), in China in the next five years, predicts Aon’s (NYSE:AON) Shanghai-based human resources advisory firm.”
Over the past five years drug sales in China (NYSE:FXI) have grown by an average of 24%, with an expected continued growth rate of 19-22% over the next five years (total market of $115 billion yearly). Medical authorities say the move is a no brainer for young Chinese med-school graduates, as pharma companies offer salaries at more than triple the pay they’d receive from local hospitals. Shi Yingkang, dean of the West China Medical School, noted, “To them [med students], the pay does not match the effort put in.” The young med school graduates will be using their extensive biological training in sales roles, say analysts, who expect companies like Sanofi to boost drug salesperson payrolls significantly in the coming years.
According to Bayer its usually much more difficult for drug companies to attract doctors to endorse drugs, as they usually opt for nurses or pharmacists. A sales rep. for the company said, “In most other countries it’s extremely rare to get fully trained doctors as medical representatives,” speaking on the unique situation in China. Though marketing efforts in the regions may be warranted, as drug makers such as Merck (NYSE:MRK) and Bayer predict that China will overtake the US as the largest pharmaceutical market in the world by 2020.