Xian Janssen lost half of its business by Johnson & Johnson

From its heyday, it accounted for more than 45% of the entire Asia-Pacific region's business, and its lifeblood was damaged. For Xi'an Janssen Pharmaceutical Co., Ltd. (hereinafter referred to as "Xian Xianyang"), everything came too suddenly.

Recently, Xi'an Janssen not only failed to include later younger brother Shanghai Johnson & Johnson Pharmaceuticals Co., Ltd. (hereinafter referred to as “Shanghai Johnson & Johnson Pharmaceuticals”), but was also used by the latter to take half of its OTC business. .

The industry experts with long-term concern about Johnson & Johnson’s trends told the “First Financial Daily”: “Since the past decade or so, Xi’an Jansen has almost become a abandoned child, and there are no particularly good prescription drugs. The over-the-counter drug business was merged into Shanghai Johnson & Johnson Pharmaceuticals and was basically emptied."

As the United States Johnson and Johnson headquarters to re-adjust the Chinese market, it also further weakened the poor performance of its largest subsidiary in China, Xi'an Jansen, in recent years.

Inexpensive?

The story always has unexpected endings.

When Johnson & Johnson announced that its non-prescription business of Xi'an Janssen with an annual sales volume of 3 billion yuan will be merged with Shanghai Johnson & Johnson Pharmaceuticals, which is less than 1 billion yuan, there is no doubt that the internal restructuring of the "Johnsonian" system has long exceeded company news. Category.

“Even today, when I recall the period of my career with Xian Janssen, I still feel proud and full of gratitude. It is also the common feeling of our colleagues that year.” Talking about Xian Yangsen, a A senior person in the pharmaceutical industry working for Xian Jansen told reporters.

In the Chinese pharmaceutical industry, "Xi'an Jansen" is a special "symbol".

In 1985, when Johnson & Johnson of the United States decided to put its subsidiary in China, in a sense, the integration of the entire Chinese pharmaceutical industry with modern western ideas began to really begin.

In that year, Janssen, a subsidiary of Johnson & Johnson of the United States, and China’s four pharmaceutical companies (Shaanxi Provincial Pharmaceutical Corporation, Shaanxi Hanjiang Pharmaceutical Co., Ltd., China Pharmaceutical Industry Corporation, and China National Pharmaceutical Foreign Trade Corporation) jointly invested 290 million yuan to establish Xian Yangsen , Johnson & Johnson Holdings 52%, a joint venture period of 50 years.

As the largest joint venture pharmaceutical company in China and the largest subsidiary of Johnson & Johnson in China, Xi'an Jansen is headquartered in Beijing and its production base is located in Xi'an.

In addition to producing and marketing high-quality pharmaceuticals in areas such as gastroenterology, neuropsychiatry, allergy, pain management, anti-infection, biological agents, and oncology, Xian Janssen is considered to be different from foreign pharmaceutical companies in a general sense. The reason is that it has systematically nurtured China's first generation of pharmaceutical representatives in the true sense of the word, and brought advanced Western academic promotion methods into the Chinese pharmaceutical industry, which has greatly increased the awareness of domestic clinicians on drugs.

"Because of the background of Xi'an Janssen, at the time we were recruited, we basically required a bachelor's degree or above and a background in the faculty of medical science at a prestigious university." The above-mentioned senior sources told reporters that in the 1980s, such high entry barriers ensured the level of pharmaceutical representation. At the same time, a good communication with doctors has also been established in the hospital. “We will exchange a lot of professional content, and we will also discuss some of the disagreements that are welcome and respected in the hospital. This is totally different from today’s situation.”

Not only that, almost all those who have served at Xian Janssen have highly evaluated their internal training and career growth plans.

Every employee of Xi'an Jansen can receive 100 hours of targeted systematic training each year, and 10% of them have the opportunity to receive overseas training. In one detail, in the 1980s, Xian Jansen, everyone was asked to go to the podium for a keynote speech ranging from 3 to 15 minutes. This kind of training method with distinctive American elements has since become active in the field of Chinese medicine. The most outstanding group of professional managers were unanimously honored as the "Huangpu Military Academy" in the industry.

The resulting lucrative market returns are more direct. An argument often cited by Xi'an Jansen executives with pride is that "Xi'an's profits paid over more than 20 years were sufficient to recreate more than 20 Xian Janssens," and its peak performance accounted for more than 45% of Johnson & Johnson's business in the entire Asia-Pacific region.

But one of the things that Xian Janssen has always been able to avoid is that its over-stretched OTC product line started to fall into the doldrums after 2000 because of its follow-up product interruptions.

Ten years after the establishment of Xi'an Janssen, in 1995, Johnson & Johnson and Shanghai First Biochemicals Pharmaceuticals Co., Ltd. jointly established Shanghai Johnson & Johnson Pharmaceuticals. This new J&J joint venture company in China only produces OTC products, health foods and foods, and does not involve prescription drugs. field.

Industry insiders said that this was foreshadowed in the merger of the two companies in the future, but also prompted the United States Johnson and Johnson to strengthen the equity control of Xian Jansen.

In 2007, following the absorption of four Chinese shareholders' shares, Johnson & Johnson's controlling stake in Xi'an Janssen reached 70%, but due to the fact that this ratio is still far from the full holding in the Johnson & Johnson project, the previously announced new product introduction plan was also stranded.

According to public statistics, in the product introduction plan announced by Johnson & Johnson from 2004 to 2014, more than 20 high-tech products were introduced into China within 10 years, and sales of new products accounted for 29% of total sales.

But in fact, this plan completely aborted. After the glory period of “Star Products” with sales of 1 billion yuan, such as dianmidine and Miconazole, they never got new OTC products from American Johnson. This is because 60% of sales rely on OTC products. For Xian Jansen, it almost broke one arm.

Hero broken arm?

However, the grass snake-grey line, Xian Yangsen lost its non-prescription drug business, as early as in 1995 when Shanghai Johnson & Johnson Pharmaceutical was established at the time of planting.

“Shanghai Johnson & Johnson Pharmaceuticals is not easy to establish itself. It positions itself to produce and sell only OTC products. This coincides with Xi’an’s OTC business, but at that time we all thought that Xian Yangsen would swallow Shanghai Johnson & Johnson Pharmaceuticals. After all, Xian Yang Sen too. Strong." A former senior Xian Xiansen revealed to this newspaper.

In 1995 when Johnson & Johnson Pharmaceuticals was founded, Xi'an Janssen had entered the golden period of development. The sales of non-prescription drugs such as domperidone and Miconazole soared, while Shanghai Johnson & Johnson Pharmaceuticals Co., Ltd. had no product climatically opposed to Xian Janssen.

“The business lines of the two companies have been discussed and discussed many times, but no one will make concessions.” The aforementioned person told reporters.

Everything came to an abrupt end in 2007. For the first time in 14 years, Xi'an Jansen, who led the performance of China's foreign-funded pharmaceutical industry, fell from the championship position for the first time. That is, this year, it officially began to decline in performance in China.

Almost on a timeline, in 2005, Shanghai Johnson & Johnson Pharmaceuticals changed its status from a joint venture to a wholly-owned Johnson & Johnson company in the United States. The direct reason is that it has been losing money for ten consecutive years.

"The performance of the two companies has made Johnson's senior executives begin to rethink the pharmaceutical layout in China. Obviously Shanghai Johnson & Johnson's sole proprietorship is more advantageous. Unfortunately, Xi'an Janssen hasn't recovered since then." The person said.

According to public statistics, sales revenue of Xi'an Janssen in 2012 was RMB 5,132.31 billion, a year-on-year decrease of 1.12%. In those years, multinational pharmaceutical companies maintained a 20% growth rate in China, and individual companies even reached 30%.

"In the long run, this kind of integration will help the US to increase its investment in new products and investment in the new company, and it will be beneficial to the development of OTC business, but it will definitely affect personnel and customers in the short term." Yuan Jianjun, a medical combat trainer trained by Xian Janssen and Shanghai Johnson & Johnson Pharmaceuticals, once stated that due to the high similarity or overlap between the two companies in products, channels, markets, customers, etc., from the perspective of resource optimization and efficiency improvement Look, integration is inevitable.

“Shanghai Johnson & Johnson Pharmaceuticals now has the Tylenol, Tylenol and Bondi series that are in charge of colds and fevers. Even if it is incorporated into Xian Janssen, it must be enriched as soon as possible; and how Xi'an Janssen plans to develop the next step is indeed a problem.” Experts believe that foreign companies compete fiercely in the field of prescription drugs, and Xi'an Jansen has lagged behind. From focusing on non-prescription drugs to selling only prescription drugs, the test is on the capabilities of supply channels, personnel, and marketing systems, and the change will not be so easy.

The reporter has repeatedly contacted Xian Janssen and related personnel of Shanghai Johnson & Johnson Pharmaceuticals. As of this writing, no response was received.