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Actavis, the world's second-biggest generic drug maker by market capitalisation, says it is pulling out of the mainland because of its difficult business climate.
While the mainland had more than 1.3 billion potential customers, the government had made it a difficult place to conduct business, chief executive Paul Bisaro said in San Francisco on Wednesday.
The company had sold one operation there and was in talks to sell another, he said.
"It is not a business-friendly environment," Bisaro said. "If we're going to allocate capital, we're going to do so where we can get the most amount of return for the least amount of risk. And China is just too risky."
Actavis, based in Dublin, has been expanding rapidly around the world through acquisitions. Its mainland business had a few hundred employees and contributed €4 million (HK$42.2 million) to €5 million in profit, Bisaro said.
Some US and European drug makers such as London-based GlaxoSmithKline have been under investigation by mainland authorities in connection with marketing practices and bribery since at least June last year.
Actavis has not faced any accusations of corruption, but Bisaro said if such legal problems arose on the mainland, he was not sure the company would get a fair hearing.
"If something goes wrong, you need to be able to go to the government and say 'help me'. And if the government says no, that's a problem," he said.
Given Actavis' small presence on the mainland, "it wasn't worth the aggravation, the frustration or the concern", he said.
Bisaro said there did not appear to be a level playing field on the mainland, which made it hard for companies to compete. "You need a certain consistency in application of rules, and I'm not certain China has achieved that consistency yet," he said.
Instead, Bisaro plans to spend the company's energy on other regions. He predicts the industry would continue to consolidate as it looked to improve profit margins and find cost savings.
A generics mega merger was likely to be very profitable for the companies involved, Bisaro said.


Mainland China market too difficult,says drug maker Actavis

Business

China Business

Actavis, the world's second-biggest generic drug maker by market capitalisation, says it is pulling out of the mainland because of its difficult business climate.


Mainland China market too difficult,says drug maker Actavis

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Actavis, the world's second-biggest generic drug maker by market capitalisation, says it is pulling out of the mainland because of its difficult business climate.

Actavis, the world's second-biggest generic drug maker by market capitalisation, says it is pulling out of the mainland because of its difficult business climate.