China’s anti-corruption campaign in pharma industry targets public officials; impact on innovative pharma manageable – CLSA
POLICY & REGULATION STOCKS VIEWS & ANALYSIS
China’s anti-corruption campaign in pharma industry targets public officials; impact on innovative pharma manageable – CLSA
POLICY & REGULATION STOCKS VIEWS & ANALYSIS

China’s anti-corruption campaign in pharma industry targets public officials; impact on innovative pharma manageable – CLSA

 

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The impact of China’s anti-graft campaign on pharmaceutical firms will be manageable due to the intact medical demand in China, CLSA said in a note.

Current policies continue to favor innovative drug development, including the relaxation of health insurance payments, tightening of drug valuation standards and enhancement on regulatory scrutiny, it said.

CLSA remains optimistic about the long-term development of innovative drugs in China, and its top H-share picks are CSPC Pharma, Sinopharm, China Medical System, Wuxi Apptec, and AKESO.

The anti-corruption move mainly targets public officials, particularly authoritative person within the public hospital system, such as party secretaries, hospital directors and officials in charge of procurement, while corporations are more likely to be partners in the investigation, it said. 

It noted that 77 innovative drug companies that have been audited by the Ministry of Finance between 2019 and 2021 will face lower risk in this investigation as they have already undertaken internal compliance reformation.