Chinese health care reform to help create new national champions?

This text is from Springtime's China issue tracker. The China issue tracker is a monthly report covering issues ranging from developments in public opinion and relations between China and other countries to company crises and hot media topics. We provide insight and analysis to help foreign businesses in China stay on top of important developments, as well as ad hoc updates on important events.

Chinese health care reform to help create new national champions?

The Chinese health care system is currently undergoing reforms with the goal to make basic health care accessible to every citizen by 2020. The reform seeks to expand health care coverage as well as correct some serious problems in the current system.

Many aspects of the reform have yet to be finalized, such as how a separation of hospitals and pharmacies will be implemented. So far the most developed part of the reform is implementation of the Essential Drug List (EDL), a list of drugs that will see tougher price controls and centralized procurement in order to keep costs down.

For companies with products on the EDL, the changes to how business will be done will be profound. But the consequences will reach even further.

The EDL, in its original incarnation, contains 307 drugs seen as essential to the grassroots level of health care in China. Local Health Bureaus can add to the list, as is the case in for example Chongqing where the list has an additional 43 drugs on it.

Procurement will be done on the provincial level. Companies will be able to submit their bids to provide drugs on the list though a web site and winners will be awarded contracts between six months and a year.

China has had many strong local pharmaceuticals providers, but few strong players on a national level. One of the objectives of the new system, according to local officials we have met, is to make it easier for companies to compete in other markets than their home provinces, making China “one market” for pharmaceuticals.

To help this, local governments will take steps to boost their local pharmaceutical companies, encouraging them to compete in other provinces. It is easy to see this becoming a government-backed arms race in the pharmaceutical sector, with each province wanting to promote their champions.

Companies also get help from the financial markets. In September, China’s largest pharmaceutical products distributor Sinopharm successfully raised more than one billion dollars in its Hong Kong IPO.

While the Chinese market is large, it won’t be enough, and companies will want to expand outside of China. And this is where the consequences of the health care reform will spread to other markets. As China upgrades its health care system, governments boost their local companies, and investors flock to provide the financing, China will be on its way to create a new set of national champions ready to take on markets abroad.

That will be a more important strategic development for foreign pharmaceutical companies than being on the local EDL or not.

If you're interested in receiving the full report, please contact Patrik Lockne at Springtime's Beijing office at [email protected].

Ställ högre krav på PR-branschens tekniska kompetens

Kvällens Spinn-vinnare i den digitala kategorin är mycket värdiga vinnare, men den stora massan av digitalbidrag behöver lyfta sig ett snäpp för att platsa i kategorin.

Nästa år hoppas jag att den digitala kategorin premierar det verkliga hantverket kring sociala medier. Det kommer inte att räcka med att starta en Facebook-grupp, lägga upp lite filmer på Youtube och låta kunden Twittra för att vinna Spinn-guld i den digitala kategorin 2010.

Då kommer det att krävas en mycket högre kompetens i det digitala hantverket. Det är också denna kompetens som kommer att krävas om PR-branschen ska följa med i utvecklingen som nu sker inom sociala medier.

Efter att ha haft glädjen att sitta i årets Spinn-jury kan jag nöjt för PR-branschen konstatera att antalet bidrag till den digitala kategorin ökat lavinartat. Dessutom har ”sociala” och digitala inslag i bidragen i de övriga kategorierna varit mer regel än undantag.

Det här speglar det skifte i medielandskapet vi är inne i, även om byråerna i flera fall väver in sociala medier i sina bidrag bara för sakens skull.

Eftersom digitala medier är en självklar del i flertalet av byråernas kampanjer kan man fråga sig om den digitala kategorin har något existensberättigande framöver?

Det har den absolut, hävdar jag, men den behöver definieras om för att premiera en fortsatt utveckling av branschen.

Just nu är det ett öppet fält för vilken byrådisciplin som ska bli ledande att hjälpa kunderna att navigera i sociala medier. Som företag är det idag lika naturligt att be sin reklam-, som webb-, som PR-byrå om hjälp kring detta. Här behöver PR-branschen höja sin kompetens för att befästa sin position som den naturliga rådgivaren kring sociala medier. Det kan den digitala kategorin i Spinn bidra med.

Inför nästa år kommer kraven kring kampanjer i digitala kanaler vara högre och det kommer att kräva en högre kompetens hos PR-byråerna.

Jag vill se briljanta lösningar på hur man kontinuerligt arbetat med att öka trafiken till företagens hemsidor genom sociala medier – gärna toppat med smarta kampanjer – men det är det dagliga arbetet med konstant närvaro på relevanta arenor som ska premieras.

Jag vill se att PR-byråerna flyttat fram positionerna för sina kunder i Googlerankingen genom äkta länkkärlek och sökordsoptimerade pressmeddelande.

Jag vill också se hur byråerna hjälper sina kunder att bygga in sociala medier i hela organisationen – inte bara som en kampanjidé – utan som verklig affärsnytta.

Det råder inga tvivel om att sättet vi i PR-branschen hjälper våra kunder radikalt förändrats på bara några år genom bloggar, Facebook, Twitter och andra sociala nätverk. De flesta av oss byråer har utvecklats i samma takt, men slaget om företagens marknadsföringsbudgetar står inför helt nya utmaningar. När företagen överger traditionell reklam för att istället möta kunden där kunden är – vilken byrå ska då leda vägen?

Det finns alla förutsättningar för PR-branschen att visa vägen i sociala medier. Vi måste dock ta nästa steg i vår utveckling och höja den tekniska kompetensen på riktigt för att hävda oss i konkurrensen mot andra typer av byråer.

Fredrik Pallin, Springtim

Detta inlägg är också publicerat på Dagens Media 

Rainmakers without phones

This Sunday Beijing was suddenly covered in snow. The week before we had eaten our lunch outside in the sun, fully convinced we would see a few more weeks of warm autumn weather.

The weather changes all the time, and a bit of snow might seem mildly exciting for a Swede, had it not been for some of the facts surrounding the sudden change of weather.

My daughter was of course excited about the whole thing. Let’s go outside! We spent a few confused minutes trying to locate our winter clothes, and went out. People were taking pictures of the snow, and the kids made snow sculptures. All very picturesque.

Returning to the office this Monday I read that it was in fact the earliest snowfall since 1987, and the third earliest ever recorded in Beijing. So should I start worrying about global cooling? Can we cancel that costly Copenhagen summit? Sell the Prius and get a SUV?

No. It turns out the heavy snowfall was triggered by the local weather “command centre” in an attempt to mitigate the severe draught that has been plaguing this part of China for a while. They blasted 186 sticks of silver iodide into the clouds, triggering some 16 million cubic metres of rain and snow. “Although it was too early for snowfall, the conditions were suitable, and we weren't going to ignore any opportunity”, says one of the rainmakers who is quoted in South China Morning Post.

While my kids loved the snow, it was less popular with the passengers of some 200 delayed flights at the Beijing Capital International Airport. Seems the “command centre” missed to tell everyone there was going to be heavy snowfall.

I am sure we’ll see more man-made weather in Beijing. The weather “command centre” has a solid track record. Last year’s Olympics saw great weather, and Hu Jintao could greet the troops basking in sunshine at this year’s National Day celebrations. All thanks to the rainmakers’ getting rid of unnecessary clouds the evening before.

But these were events planned long in advance, not an opportunity grabbed at the last moment. For those occasions, the rainmakers better learn to communicate better or they will soon lose their popularity and their chance of becoming real heroes; the bringers of perfect-weather picnics and crisp winter walks in the park.

“Forecasts” seems very much last century’s tech.

/Patrik Lockne, consultant at Springtime's Beijing office