Thermo: SDS Page price cuts in keeping with China's 5-year plan

When the US Federal Trade Commission (FTC)​ approved the acquisition of Life Tech last week it fell into line with regulators in Europe, Australia and New Zealand, which all cleared the deal with the caveat that Thermo sell some units.

The FTC decision also largely lined up with the conclusion reached by antitrust authorities in China​ which, like the all the other competition bodies, told Thermo to divest its HyClone culture media, Dharmacon siRNA and Sera-Mag magnetic bead divisions.

The only point of difference between the FTC and the Chinese Ministry of Commerce was that the latter also asked Thermo for price cuts.

Specifically, the Ministry only approved the $13.6bn Life Tech takeover because Thermo agreed to discount SSP kits and SDS-Page standards sold in China for the next decade.

The Chinese price cuts are noteworthy according to ISI Group analyst Ross Muken, who told BioPharma-Reporter.com that while they are not particularly unusual, they do provide and insight into what the Chinese Government sees as important.

“The [Chinese] government is heavily focused on building a leading biotech industry and also wants strong basic research. The government is just protecting future pricing in a key focus area…TMO is the largest tools company in the region and is committed to being a key partner to research growth there​.”

Culturing biopharma growth​

Further evidence of China’s interest in biopharma can be seen in the Government’s most recent five-year plan in which politicians announced their intention to “focus on the development of biopharmaceuticals, biomedical engineering products, bio-agriculture and bio-manufacturing.”

By 2015 China intends to “build databases of gene resources for pharmaceuticals, important plants and animals, and industrial microbial bacteria. Construct R&D and industrialization bases for biopharmaceuticals and biomedical engineering products, biological breeding, testing, detection and fine breeding bases, and exemplary bio-manufacturing application platforms​.”

This fits with what Thermo’s spokesman Ron O'Brien told us when he said the price cuts track “with China’s latest Five Year Plan which seeks to further develop hubs of research and development and high-end manufacturing. Thermo Fisher’s growth strategy in China is closely aligned​.”