Xian-Janssen Splits From Distributor

June 2007 | Company News Alert

The leading Sino-US pharmaceutical joint venture, Xian-Janssen, has had to find new distributors after its long-term delivery partner, Nanjing Pharmaceutical, withdrew its products from retail outlets and replaced them with cheaper, locally-made generics. Nanjing Pharma took the decision because the 18-year relationship brought little profits and, indeed, last year the cost to distribute Xian-Janssen's products exceeded the return. BMI believes that Nanjing Pharma made the right decision. However, we caution that with consolidation increasing in China's distribution sector, the loss of the Xian-Janssen account lowers Nanjing's critical mass, leaving it vulnerable to takeover when it should be a

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