Chinese Pharmaceutical Companies Entering Global Market: The Case of Jiangsu Hengrui Medicine

Currently, the pharmaceutical industry is one of the fastest-growing knowledge-intensive industries in the world economy. Leading positions in the global pharmaceutical market are occupied by the largest companies from the USA, Japan and some European countries. However, in recent years, to reduce costs, links in pharmaceutical value chains have begun to be transferred to emerging market countries, which includes China. This created favourable opportunities for the development of national companies. Jiangsu Hengrui Medicine (JHM) is one of the most innovative pharmaceutical companies in China, founded in 1970 and listed on the Shanghai Stock Exchange in 2000. The purpose of this work is threefold: first, to trace the stages of formation of JHM; secondly, to identify the strategies that JHM used when entering foreign markets; thirdly, to highlight the factors of competitiveness that allowed the company to achieve success in the global pharmaceutical market. Several methods were used as research methods, in particular, comparative analysis, the method of analysis and synthesis, and the method of induction. As a result of the study, the authors came to the following conclusions. In its development, JHM went through a series of successive stages that were organically linked to each other: the production of basic pharmaceutical products (stage 1) laid the foundation for the production of generics (stage 2) and its innovative pharmaceutical products (stage 3). In parallel, the international development of JHM was going on, and the strategies for entering foreign markets were closely related to the increase in the degree of innovation of the manufactured pharmaceutical product. The main factors in the growth of the company’s competitiveness in the international market were as follows: consistent investment in R&D, investment in the company’s human capital, as well as cooperation with Chinese and foreign universities, innovation centres, etc. An important role in promoting Chinese companies abroad is played by government support for creating a favourable business macro environment. © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022.