Actavis CEO Paul Bisaro said the company will cease operations in China because of the country's "risky" business environment, Bloomberg reported Thursday. The generics drugmaker has reportedly sold one operation in China and is in talks to sell another. "It is not a business friendly environment," Bisaro remarked.
According to Bisaro, China doesn't represent a large market for Actavis, with the company having a few hundred employees in the country and generating about 4 million euros ($5.4 million) to 5 million euros ($6.8 million) in profit from the region. "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," Bisaro said.
Several drugmakers, including GlaxoSmithKline, have recently faced probes from Chinese authorities related to marketing practices and bribery in the country. Although Actavis hasn’t faced accusations of corruption in China, Bisaro said he isn’t confident that the drugmaker would get a fair hearing if such claims were levelled at the company. "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," Bisaro commented.
The executive suggested that there doesn't appear to be a level playing field in the country, adding "you need a certain consistency in application of rules, and I'm not certain China has achieved that consistency yet." He noted that given Actavis' limited presence in China, "it wasn't worth the aggravation, the frustration or the concern."
Recently, Sinopharm said that a former vice president has been detained by Chinese authorities as part of a probe into alleged corruption, while a former general manager of a wholly owned subsidiary was also under investigation.
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