Apple’s 18.2% Decline and Multinational Pharma Struggle in China

（This article has been updated on Jan.24, 2025 to make the text concise and cohesive)

If you need just one figure to capture today’s trends, it’s 18.2%.

For my biotech and pharma followers, no, this isn’t about Claudin 18.2, but it’s still critical—this number reflects the 18.2% decline in Apple’s sales in China during the fourth quarter. Once the dominant smartphone maker in China, the world’s largest market for handheld devices, Apple is now seeing its golden age fade.

The 18.2% drop is significant. Apple’s iPhone once reigned supreme in the Chinese market, but it seems its dominance is slipping. Contributing factors include an overall economic slowdown, weak domestic demand, and increasing competition from Chinese brands like Huawei and Oppo. A double-digit sales decline during the busy holiday season suggests trouble ahead.

But Apple isn’t the only company facing challenges in China. The domestic competition extends beyond smartphones to the health sector, where local pharmaceutical companies are pushing drug prices down so dramatically that most of the drugs centrally procured for public hospitals are now domestic generics. As a result, multinational branded generics have been sidelined by hospitals and physicians.

This trend has sparked concerns among Chinese policymakers. Recently, twenty members of the Shanghai Political Consultative Committee issued a public letter questioning the quality of these lower-priced drugs. They warned that the central procurement mechanism (Jicai) should not be focused solely on securing the cheapest options.

“The Jicai mechanism’s purpose is not to procure only cheap drugs,” the letter stated, highlighting the potential risks to drug quality.

It’s clear that multinational pharmaceutical companies are facing tough times in China, as domestic generics continue to win bids due to their low prices. If this trend continues, the market for multinational drug makers in China could become increasingly challenging.