Johnson & Johnson is seeking acquisitions and aiming to expand in China despite facing a variety of challenges there, including a slowdown in the country’s economy.
Johnson & Johnson, which makes everything from prescription drugs and medical devices to Band-Aids and Listerine mouthwash, wants to boost its pharmaceutical sales in China by zeroing in on treatment for highly prevalent diseases, such as lung cancer, Chief Executive Alex Gorsky said in an interview with The Wall Street Journal on Monday. Medical devices accounted for half of the New Brunswick, N.J.-based company’s roughly $3 billion in China sales last year, which jumped 10% from 2012, Mr. Gorsky said. He said that pharmaceutical and consumer product sales are evenly split.
“One of the things we are concerned about is the drug lag you see,” Mr. Gorsky said, noting that it takes an average of eight years for drug approval in China, compared with four years in other markets. J&J is also eyeing Chinese companies to add to its portfolio of baby and beauty products, medical devices and drugs, Mr. Gorsky said on the sidelines of the Asia-Pacific Economic Cooperation CEO Summit.
Johnson & Johnson, an early entrant in the China market, has faced stiff competition there in recent years, as local and international rivals have piled in to sell baby products and medical devices. Challenges, such as piracy and patent protection, have created setbacks. The Chinese economy is also facing a slowdown.
J&J was among a number of contact-lens companies that were fined more than 19 million yuan ($3 million) in May for price-fixing in China’s eyeglass and contact lens market. J&J was fined 3.6 million yuan.
Mr. Gorsky said the company prioritizes “competing in an appropriate manner” and is doing its best to work with the government “to ensure a level playing field” under a common set of standards.
There are some cases in which J&J doesn’t face fair competition in China, Mr. Gorsky said. When asked to elaborate, he would only say “we support government actions in creating a leveled playing field for all companies.”
While China’s overall growth is slowing, access to health care has increased, Mr. Gorsky said, adding that J&J also sees opportunities for serving China’s aging population and treating noncommunicable diseases.
By Laurie Burkitt