Investing In China: Views from Windhover's PharmAsia Summit
This article was originally published in Start Up
A recap of the first annual PharmAsia Summit, outlining current views on the opportunities and risks associated with investing in China.
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WuXi PharmaTech's spectacular public offering last summer piqued foreign investors' interest. Top tier VC firms are now investing in contract research organizations, manufacturing plays, and start-ups shifting business operations to China.
Although stakeholders are interested in value-based models that link a drug’s performance to emerging evidence of improved patient outcomes, such agreements are difficult to implement and too limited in scope to drive a shift to value-based reimbursement. The authors suggest a new, structured approach to bring these contracts into the mainstream, thus transforming product reimbursement and fueling the shift from volume to value.
The current unit-based pricing model for drugs is too one-dimensional for the market's present needs. Pharma firms must identify products that will benefit from innovative pricing models, and then forge the types of collaborations that will support those models.