Baheal Medical and Itochu Corporation Forge Comprehensive Strategic Partnership to Expand Healthcare Markets in China, Japan, and Beyond

On May 8, 2018, Chinese Premier Li Keqiang will arrive in Japan to attend the Seventh Trilateral Summit among China, Japan, and South Korea and pay an official visit to Japan. This year marks the 40th anniversary of the conclusion of the Treaty of Peace and Friendship between China and Japan, representing a significant milestone in bilateral relations. Premier Li’s visit will serve as an important opportunity to promote the improvement of ties between the two countries.

On May 8, Premier Li Keqiang published a signed article titled “Restarting the Cause of China-Japan Peace, Friendship, and Cooperation” in Asahi Shimbun, injecting “new momentum” into the improvement and development of bilateral relations. The Premier stated that the Chinese and Japanese economies are highly complementary, and there are broad prospects for expanding practical cooperation in multiple fields—including energy conservation and environmental protection, technological innovation, high-end manufacturing, fiscal and financial services, the sharing economy, and healthcare and elderly care—amidst the new wave of technological and industrial revolution. He further noted that there is immense potential for enterprises from both countries to engage in third-party market cooperation.

Tokyo, Japan, May 11, 2018—During Premier Li Keqiang’s official visit to Japan, China and Japanese pharmaceutical companies reached an agreement on in-depth cooperation in the field of pharmaceuticals and healthcare. VCBeat has learned thatRecently, Baiyang Pharmaceutical Group (hereinafter referred to as “Baiyang”) announced that it has signed a comprehensive business cooperation agreement with Itochu Corporation of Japan (hereinafter referred to as “Itochu”) in the fields of pharmaceuticals and healthcare. The two parties will engage in all-around cross-border cooperation in over-the-counter drugs, prescription drugs, personal healthcare, and cutting-edge technologies, jointly exploring the pharmaceutical and healthcare markets in China, Japan, and other overseas regions.. This marks a new breakthrough in Baiyang Pharmaceutical’s international supply chain strategy. In the future, Baiyang will introduce advanced Japanese pharmaceutical technologies, emerging technologies, and innovative drugs, while leveraging its new distribution platform to provide precision services for Japanese pharmaceutical companies.

At the end of 2016, the Central Committee of the Communist Party of China and the State Council issued the Outline of the “Healthy China 2030” Plan, defining the health industry as a “pillar industry of the national economy.” Statistical data shows that in 2016, the market size of China’s big health industry exceeded RMB 3 trillion. It is projected that over the next fifteen years, the market size of China’s health industry will rapidly expand to RMB 16 trillion. Investment opportunities across various sectors, including pharmaceuticals, pharmaceutical distribution, medical devices, and healthcare services, will receive strong promotion and support, making them highly promising for investors.

Baiyang will partner with Itochu and its joint venture holding company,The cooperation will be carried out primarily in six areas: the sales of healthcare products such as over-the-counter (OTC) drugs, functional cosmetics, and functional foods; the manufacturing and sales of prescription drugs; personal healthcare; cutting-edge technologies and new services; overseas business operations; and joint investment ventures.In the field of prescription drug manufacturing and sales, both parties will explore leveraging internet technologies to expand the sales of high-quality, high-safety Japanese prescription drugs in Chinese hospitals and pharmacies, as well as introducing Japan’s advanced pharmaceutical technologies into China. Furthermore, they will explore emerging business opportunities in areas such as AI and IoT-driven therapeutic services for cancer and other diseases, academic exchanges, sales support, and logistics applications.

Fu Gang, Chairman of Baiyang Pharmaceutical Group, stated, “The state’s robust support for the healthcare industry will significantly promote cooperation among enterprises worldwide in innovative drugs and cutting-edge technologies. Strategic alliances between industry leaders through comprehensive strategic partnerships will be the main theme of future corporate development. The establishment of an all-encompassing strategic partnership between Baiyang and Itochu is conducive to mutual benefit and joint growth for both companies. Furthermore, deep and extensive ties with Japanese pharmaceutical and healthcare enterprises will provide comprehensive support for Baiyang to introduce high-quality, high-safety prescription drugs and advanced pharmaceutical and medical technologies from Japan. This marks another collaboration between Baiyang, as China’s leading health portal enterprise, and global top-tier companies, following previous partnerships with IBM, Philips, and Oracle.”

Keita Ishii, Managing Executive Officer of Itochu Corporation and President of its Energy & Chemical Company, stated, “To better adapt to the complexities of the Chinese market and further expand our healthcare business, we believe that partnering with local Chinese enterprises is essential. Baiyang has made significant efforts to drive innovation in China’s pharmaceutical and health industries, transforming from a traditional business model into a comprehensive healthcare enterprise aiming to establish a next-generation distribution and sales platform. This innovative and effective momentum is highly valued by Itochu as it develops partnerships in China. We are confident that, with Baiyang’s support, Itochu will be better positioned to serve medical institutions and patients in China.”

Itochu is Japan’s largest general trading company (sogo shosha), currently operating approximately 120 offices in 63 countries and regions worldwide, engaging in trade and investment across a broad spectrum of business sectors. Since becoming the first major general trading company authorized to resume Sino-Japanese trade in 1972, Itochu has remained committed to cultivating “China specialists” with in-depth knowledge of Chinese history, culture, and trade practices, while fostering cooperative relationships with leading enterprises across various sectors in China to achieve mutual growth.

In recent years, cross-border collaborations between Chinese and foreign enterprises have become increasingly frequent, a trend that is becoming particularly pronounced in the healthcare and medical industry. On April 12 this year, Premier Li Keqiang announced at an executive meeting of the State Council the decision to implement zero tariffs on imported anti-cancer drugs. Subsequently, on April 23, the Customs Tariff Commission of the State Council issued a public notice stating that, effective May 1, the import tariffs on 28 categories of medicines—including all conventional drugs, alkaloid-based drugs with anti-cancer properties, and proprietary Chinese medicines with actual import records—would be reduced from 3%-6% to zero under provisional tariff rates. This move demonstrates strong national policy support for drug imports and the broader healthcare sector.

As the first initiative in the comprehensive partnership between Baiyang Pharmaceutical Group and Itochu Corporation, Qingdao Baiyang Pharmaceutical Co., Ltd., a subsidiary of Baiyang that ranks among the top performers in China’s imported OTC (over-the-counter) drug sales, will increase its capital investment in RiMeiJian Pharmaceuticals (China) Co., Ltd. (“RiMeiJian China”). RiMeiJian Pharmaceuticals Co., Ltd., a joint venture between Itochu and Alfresa Holdings Corporation, Japan’s largest pharmaceutical wholesaler, has already launched pharmaceutical distribution and sales operations in China.

Fu Gang stated that Baiyang will make efforts in multiple areas to promote cooperation between Chinese and Japanese enterprises and achieve tangible results. First, leveraging Baiyang’s marketing capabilities will help Japanese pharmaceuticals, health supplements, skincare products, and high-tech services better enter the Chinese market. Second, the big data application capabilities of Baiyang’s new distribution platform will more accurately assist Japanese pharmaceutical companies in selecting terminal channels, providing customers with more precise and effective marketing solutions. Finally, this international expansion represents a significant breakthrough in Baiyang’s supply chain, positioning Baiyang as a gateway for China to connect with global cutting-edge medical and healthcare resources, thereby enhancing Baiyang’s comprehensive layout in the medical and healthcare sector.