Table of contents
Portfolio Managers’ Summary 3
Why China is So Important 3
Diversification Matters 3
Conservative macro assumptions still yield double digit pharma growth 4
Consumer growth approximates GDP, while nutritionals outpaces it 5
2015 Total MNC Revenues in China to Rise by ~$17 Bn versus 2008 6
Model Updates Also Incorporate Some Emerging Market Impact 7
China Affiliate P&L Analysis 11
The earnings contribution of China becomes more noteworthy by 2015 11
Focus on China and Emerging Markets has Increased as Traditional Market Growth Slows
13
GDP growth outlook, size and reform puts China on Map 13
Emerging Market Growth Rates Generally Seen as Double Digits 13
Our own travels give us perspective on the historical emphasis on tangible rather than
intangible infrastructure 15
Chinese Pharmaceuticals - Assessing the State of Play 16
Local Companies Have the Greatest Share and Rxs Make up Greatest Share of Dollars
16
Growth should be achieved as Positives Outweigh Negatives 19
Material growth in China should prevail but it is not without cross-currents 19
Key themes emerge on the positive currents 19
Favorable long-term macro outlook 20
Aging population 24
Rapid urbanization 24
Healthcare reform & improvement in social welfare system 26
Regulatory Evolution 31
Capacity expansion and brand equity 32
Other Noteworthy Factors 33
Chinese pharma market may more than double by 2015 34
Summary of Estimates for Pharma, Consumer, and Nutritionals 34
Consumer and Nutritionals, Complimentary and Dynamic Business Opportunities 38
Therapeutic areas of focus are in-line with companies’ areas of expertise 41
Company and Market References 44
Summaries include: 44
• Top 5 Products for Global MNCs 44
• Company Presence Summary for US MNCs 44
Company Presence Summary for US MNCs 47
Abbott 47
Bristol-Myers Squibb 48
Eli Lilly 49
Johnson and Johnson 51
Merck 52
Pfizer 54
Sales & Earnings Sensitivity Analysis 57
Abbott Laboratories ABT 70
Bristol-Myers Squibb BMY 71
Eli Lilly LLY 72
Johnson & Johnson JNJ 73
Merck & Co. MRK 74
Pfizer PFE 75