GSK and Novartis China District have successively changed coaches, and multinational pharmaceutical companies have started a new round of major adjustments in China.
21st century business herald reporter Ji Yuanyuan reported that since the beginning of 2024, major multinational pharmaceutical companies have made frequent strategic adjustments and personnel changes. Recently, many multinational giants such as Novartis, GlaxoSmithKline and Johnson & Johnson have heard the news of the change of the "head" in China.
On May 14th, 21st century business herald reporter learned that Herbry, President of Novartis International Business Department, announced a series of personnel changes to employees. Among them, Zhang Ying, President of Novartis China, was appointed as Chief Commercial Officer (CCO) of Novartis International Business Department from June 1st, leading the CLS team of Novartis International Business Department, based in Basel. Leo Lee, the president of Novartis Japan, has been appointed as the president of China, and Keizo Miyazawa will be the temporary president of Japan during the transition period, taking charge of Japanese business.
Prior to this, on May 10th, Mike Crichton, Senior Vice President of GSK Greater China and Intercontinental Region (GSK GCI), also announced a major personnel change to employees. Qi Xin, the current vice president of GSK and general manager of China, was appointed as the vice president and head of vaccine business of GSK Greater China and Intercontinental Region, and Sherman Yu took over as its vice president and general manager of China.
When the "heads" of the above two multinational pharmaceutical companies in China began to be arranged by the company to go abroad, some heads of multinational pharmaceutical companies in China voluntarily submitted their resignations. At the end of April this year, Song Weiqun, Chairman of Johnson & Johnson China and President of Johnson & Johnson Medical Technology China, was reported to have resigned from the company to seek external development opportunities.
Insiders of GSK, Novartis and Johnson & Johnson all confirmed to 21st century business herald that the news of senior management changes was true.
In recent years, the accelerated changes in the medical and health industry and the China market are also promoting the adjustment of the strategy and organizational structure of pharmaceutical enterprises. An analyst in the pharmaceutical industry of a brokerage firm told 21st century business herald that with the new round of medical reform in China entering the deep water area, especially under the pressure of a series of reforms such as quantity purchasing, medical insurance negotiation and medical insurance payment methods, generic drugs are rapidly declining and innovative drugs are accelerating, and the whole industry is facing an urgent need for transformation and upgrading.
"In the next few years, the changes in China’s pharmaceutical industry will intensify, which will also prompt the industry to face many unprecedented challenges in the process of rapid development, especially the frequent flow of talents, team change and adjustment, how to strengthen the organization and talent ability, and stand out in the Hundred Regiments Campaign, and become a difficult problem that multinational pharmaceutical companies need to think about." The above analyst said.
Why does the person in charge of China District "run away" frequently?
In recent years, with the continuous influence of China’s policies such as medical insurance fee control, quantity procurement, and anti-corruption, the second largest pharmaceutical market in the world faced by multinational pharmaceutical companies has undergone profound changes, especially the domestic generic drugs that have passed the consistency evaluation and the local innovative drugs that have been continuously approved for listing, which have also brought multiple competitive pressures to multinational pharmaceutical companies.
Before the news of the change came from the person in charge of GSK China, the organizational structure of GSK China had been adjusted in advance. In the beginning of 2024, it was reported in the industry that GSK China would abolish the LBT sales team of central nervous system products, and from January 1, 2024, the original organizational structure would be adjusted to three core business departments: special drugs, vaccines and respiration; At the same time, the previous goal of "achieving domestic sales of 3 billion pounds in 2030 and becoming the first multinational pharmaceutical company in China" was adjusted to "being among the top ten multinational pharmaceutical companies in China".
"Pharmaceutical R&D is a long-term and high-risk industry. Under the current market environment, both multinational pharmaceutical companies and local innovative pharmaceutical companies are grasping the opportunity of this round of industry reshuffle and reshaping their product lines, sales systems and sales personnel, as well as strategic direction. Just after the structural adjustment of China District was proposed, the news of high-level personnel changes came. It can be seen that GSK has more considerations for the strategic layout of China District. " An executive of a pharmaceutical company who did not want to be named told the 21st century business herald reporter.
In recent years, Novartis Pharmaceutical is also accelerating strategic adjustment and promoting innovation and transformation. Novartis, like most multinational pharmaceutical companies, chose to "discard the false and preserve the true" and terminated the non-core projects in the development pipeline to enhance the focus on the four core treatment areas of cardiovascular, kidney and metabolism, immunity, neuroscience and cancer. After the completion of the divestiture of Sandoz in 2023, it is also considered that it will usher in a critical moment of global performance test. During this period, the change of coaches in China District was also considered by the above-mentioned pharmaceutical company executives as an urgent need for transformation and upgrading.
For Johnson & Johnson, a strategic spin-off was also carried out in 2023. In August, 2023, Johnson&Johnson officially announced the completion of the share swap offer for splitting Johnson & Johnson and Kenvue. According to the annual performance report released for the first time by a pharmaceutical giant focusing on medical technology and pharmaceuticals after Johnson & Johnson officially completed the spin-off of consumer health care business in 2023, the total revenue in 2023 was US$ 85.2 billion, a year-on-year increase of 6.5%; Net profit was $13.3 billion, down 18.6% year-on-year. This performance makes the market question the profitability of Johnson & Johnson. By analyzing its performance, it is not difficult to see that due to the influence of international competition and patent cliff, Johnson & Johnson’s market may face the dilemma of "internal troubles and foreign invasion". To this end, Johnson & Johnson also needs to find the next engine to support the sustained growth of performance.
In view of the current market pain points of multinational pharmaceutical companies, the above-mentioned analysts further analyzed the 21st century business herald reporter and pointed out that due to changes in policies and markets, large-scale adjustment of domestic strategies of multinational pharmaceutical companies is inevitable, and it is not difficult to see from the personnel adjustment of GSK and Novartis that multinational pharmaceutical companies need to sort out their existing personnel in order to control China’s market position.
"As for whether the positions of these executives are’ promoted’, it also depends on whether the responsible persons of the subsequent China market need to report to them. However, no matter how it is adjusted, it is undeniable that the more the market challenges continue, the more multinational pharmaceutical companies need to think: the focus of the value chain is gradually changing, and how to fill the gap? Industry policies are favorable for development, how can organizations be efficient and agile? This is a systematic problem, which needs to be comprehensively considered from various aspects such as talent attraction, organizational structure, team building, and incentive assessment. " The above analyst said.
Seek a breakthrough point in response to market changes
Since 2021, a number of targeted innovative drugs have entered the medical insurance one after another, and in 2022, they began to really contribute income, profits and cash flow to innovative drug enterprises. At the same time, under the dual pressure of finance and medical insurance expenditure, the state’s support for innovation tends to be detailed, and the standards of innovation in the future will be further improved, which is conducive to changing the serious homogenization of drug research and development in the same target, and is conducive to truly innovative pharmaceutical companies.
In this context, China’s innovative drug market has gradually entered the period of "selected high-quality innovation", and homogenized products have gradually lost their competitiveness. New technologies, scarce technology platforms, differentiated treatment fields, innovative drug delivery methods, etc. may all bring better competition to enterprises, and companies with technology precipitation are expected to stand out.
Industry data also shows that due to the influence of centralized mining, the growth rate of multinational enterprises in 2021 is not as good as that of local enterprises. From the nature of different enterprises, local enterprises dominate the hospital drug market, with sales of nearly 680.5 billion yuan in 2021, up 12% year-on-year. However, the proportion of sales in the past five years showed a downward trend.
In this realistic situation, there is a view in the industry that the adjustment of China’s innovative pharmaceutical industry also reflects the continuous improvement of domestic pharmaceutical companies’ R&D strength, which makes multinational pharmaceutical companies face increasingly fierce competition in many mature pharmaceutical categories. Under this background, how to reposition the global strategic positioning of China market and make corresponding business adjustments has become a difficult problem for multinational pharmaceutical companies, which is also a test for the "head of the company" in China District.
"Behind the flow of talents, it is mapped that multinational pharmaceutical companies are constantly adjusting their strategies and talent structure to cope with the new situation of industry development." The above-mentioned analysts told 21st century business herald that the biggest challenge faced by multinational pharmaceutical companies in talent selection in China District is the turnover and reconstruction of personnel caused by the mismatch between the development stage of enterprises and talents, which has brought pain to enterprises, but in a sense, it is not a bad thing for the industry. The flow of personnel has brought about the exchange of successful experience, technological innovation, mode upgrading and capability matching, which is healthy for the whole industry and worth encouraging.
Earlier, Xiao Kun, the managing partner of Deloitte’s life science and medical industry management consulting, said in an interview with 21st century business herald that in the past 5-10 years, the innovative drug market in China has experienced peaks and valleys. At present, due to the complex policy environment in the pharmaceutical market and the increasing competition for innovative drugs, the financing difficulty in the capital market is also increasing, which leads to the passive flow of executives to some extent. The appointment of senior executives and team building in the future will directly reflect the judgment of enterprises on market trends, policy environment and the latest strategies on product development and marketing models.
"Talents with good professionalism and matching the trend of the times and the development needs of enterprises will become more and more popular. In the long run, the development of the industry has also put forward different requirements for talents. " Xiao Kun said that according to a global survey by Deloitte, organizations are also moving towards a brand-new work and labor operation model, which attaches importance to skills rather than posts and forms a new "skilled organization". At present, some pharmaceutical companies have begun to make some corresponding organizational transformation, and it is expected that more companies will have similar plans in the next few years.
However, some people in the industry are optimistic about the long-term development of the pharmaceutical sector. A few days ago, in an industry forum, many participants thought that medicine is a long-term track, and at present, how to keep a low profile and adjust the core strategy and candidate’s ability allocation to the best state is an important topic focused on enterprise development and talent strategy at this stage.
Ding Weibo, president of Bojian Asia Pacific, pointed out at the forum that it falls to the micro level, that is, the selection criteria of enterprise talents. Enterprises must choose talents based on the current situation of industry development and formulate strategies in combination with the stage and environment of the enterprise. When an enterprise is in different stages such as initial R&D or rapid expansion, it is necessary to tailor talents. However, the environment of different types of enterprises, such as foreign enterprises, state/central enterprises and private enterprises, is different, and talents need to have certain adaptability and learning ability to adapt to the changes in the environment quickly. In addition, human resource managers should also combine corporate culture to select talents, and forming consistent standards to attract talents will effectively improve efficiency.