This year will be a watershed for pharmaceuticals, and the sector is moving in a positive direction after intensive regulation in the past year, an industry figure said yesterday.

James Deng, president and CEO of Beijing Novartis Pharma Ltd, the highest-ranking Chinese in the top multinational drug maker, said yesterday that the Chinese government's decision to reveal its healthcare system reform plan within the year will create a clear and orderly environment for the industry.

Last year, China launched a massive campaign to curb the rising trend of healthcare service bills and to stop corruption in the industry, which even saw the State Food and Drug Administration chief under investigation as well as many officials, doctors and sales representatives of pharmaceutical companies.

But the ongoing campaign affected drug makers' sales. Last year, China's pharmaceutical industry grew by almost 18 percent to 532 billion yuan, compared to 70 percent annual growth in 2005.

The campaign also had an impact on Novartis, the fifth-largest drug maker in the world. Novartis grew by 6 percent to 2.13 billion in 2006.

Beijing Novartis Pharma, the flagship subsidiary of Novartis in China, booked revenue of 1.8 billion yuan, ranking it fourth among the foreign pharmaceutical firms in the market.

But with an improving market environment, Jeffery Li, president of Novartis China, said his company would aim for growth of around 20 percent this year.

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