Merck invests $107 million into overseas manufacturing

Written by Alyssa Clark

The popular German drugmaker Merck KGaA recently invested over 80 million euros, which translates to approximately $107, overseas into a foreign manufacturing plant. The plant which Merck chose to work with is based of our Shanghai, China, and the company stated the importance of cultivating the connection between this manufacturing facility and Merck because it stresses the importance of the market for global drug firms.

The facility will produced drugs to treat China’s increasing number of diabetics, thyroid disorders and cardiovascular patients, and will be available online in 2017. Government spending in the healthcare sector is estimated to tripe to $1 trillion by 2020, and this fact alone has prompted firms to invest in Chinese facilities and embrace their own respective joint ventures with local companies.

Since international drug companies have come under serious scrutiny over authorities clamping down on high price premiums, many of them have been caught up in these lumps of allegations and are struggling to clear the name of their company. The British drug company GlaxoSmithKline also has become under investigation recently due to their suspected behavior of funneling up to 3 billion yuan ($492.43) to travel agencies acting as bribes, and also doing the same to doctors and officials to boost drug sales.

Chinese officials have also questioned other companies this year like Novartis AG, AstraZeneca Plc, Sanofi, Eli Lilly & Co, and Bayer AG as well. With the more probing by the Chinese authorities, the drug companies are taking a hit in their respective sales due to the widening amount of inter-industry scandal.

"In 10 years it's conceivable that China will become the largest pharmaceutical market in the world," said Benjamin Bai, Shanghai-based partner at law firm Allen & Overy. "Do you think (drug firms) can afford to get out of China? No, even if it's difficult, they will find a way to adapt."

About the Author

Alyssa Clark is the Editor of Healthcare Global