2022-01-10-德勤-中国生命科学与医疗行业智信未来调研结果（英）_31页_2mb

Summary of China LSHC Industry Trust Survey (2021)

Core Content

The 2021 China Life Sciences & Health Care (LSHC) Industry Trust Survey provides insights into how different stakeholders perceive trust in the industry and how companies are managing it through actions and technologies. The survey involved 68 LSHC operators and investors in China, focusing on key areas such as stakeholder trust, trust management actions, the impact of the pandemic, and the role of technology and innovation in building trust.

Main Findings

1. Stakeholder Trust Importance

• Government authorities and regulators are perceived as the most important stakeholders for trust in the LSHC industry.
• Medical practitioners are also highly ranked due to their role in product adoption.
• Media is considered the least effective resource for building trust.
• Domestic companies (SOE & POE) show a slight gap in the importance of internal stakeholders such as staff, employees, and board members.
• CEOs place higher importance on trust from staff & employees and patients compared to other stakeholders.

2. Perceived Trust in Organizations

• Business partners have the highest level of trust in organizations.
• Regulators and patients are among the lowest in perceived trust, although CEOs reported relatively higher trust from regulators (66%).
• Staff & employees are perceived as the second most mistrusted group.
• 34% of respondents who said "Do not know" are from C-level positions, suggesting many companies lack internal trust assessment maps.

3. Impact of the Pandemic on Trust

• 50% of respondents believe trust levels from all stakeholders have remained the same during the pandemic.
• HCPs & medical community saw the highest increase in trust due to their role in disease control and support.
• Trust from staff & employees showed the highest decrease, but CEOs reported that trust from employees has largely increased.
• JV companies had the highest "trust decreased" ratio (33%), indicating a need for improved internal trust management.

4. Trust Enhancement Actions

• 82% of respondents' companies have an action plan to enhance stakeholder trust.
• WOFEs lag behind in trust enhancement plans.
• Regulators and HCPs are the top priorities for trust-building action plans.
• Domestic companies prioritize patients as the top action stakeholder.
• Staff & employees are a key focus for large companies, pharma companies, and WOFEs.

5. Technology and Trust

• NRDL listing and internal compliance programs are the top two drivers for trust enhancement.
• CEOs believe that while compliance programs have not changed significantly, product integrity and delivery with new technologies has greatly improved trust.
• Tracking and monitoring technologies have significantly reduced the misuse of corporate assets.
• Advanced analytics is the most preferred technology for compliance and fraud monitoring (70%).
• Chinese Cos and JV show higher willingness to adopt robotic process automation, likely due to local manufacturing needs.
• Machine learning adoption is higher in large Cos and WOFEs (over 55%) than in Chinese Cos and JV (under 40%).

6. Data Regulation and Compliance

• The new data security and privacy laws have increased IT and data compliance resource allocation.
• Pharma Cos (34/37) consider data security and privacy compliance as the highest priority.
• Foreign invested companies (JV & WOFE) focus more on cross-border data and IT arrangements.
• CEOs believe that cross-border data management is already adequately addressed (10% cite it as a priority).
• Many companies are considering partnering with third parties and appointing a Chief Data Officer to manage data-related trust issues.

7. Workforce Experience and Trust

• Caring and development for talents are the top priorities for all company types.
• Pharma Cos have the highest percentage in employee motivation (54%), while JV have the lowest (22%).
• Workplace safety is a higher priority for JV & WOFE than for Pharma Cos (30% vs. 41%).
• Chinese Cos show the lowest percentage in leveraging data in talent decisions (0%).

8. Innovation and Digitalization

• Over 60% of companies regularly sense digital innovation opportunities, especially in large Cos, Chinese Cos, and WOFEs.
• JV are the lowest in board understanding of digit-tech implications (44%).
• JV also show the lowest investment in new tech-led opportunities (11%).
• Chinese Cos are the lowest in digitization and intelligent automation (29%), while large Cos and WOFEs are above 65%.

Key Insights and Future Outlook

• Regulators are the most important stakeholders but are perceived as the least trusted.
• Staff & employees are second in importance but are the most mistrusted.
• New technologies are being used to enhance trust, particularly in product integrity and delivery.
• Pharma Cos are leading in employee motivation but also in trust decreased for staff during the pandemic.
• Med-device Cos perceive more trust from internal stakeholders but value external trust more for business success.
• Automation and digitalization are underdeveloped in Chinese Cos, which may hinder their ability to compete with larger firms.
• Digital innovation and data security are becoming critical in the trust landscape, especially with the rise of technology-savvy patients.

Appendix Highlights

• Survey population: 33 respondents from large companies (revenue > 2.5 Bln RMB).
• Company types:
  • SOE & POE: Domestic companies.
  • JV: Joint ventures with foreign investment.
  • WOFE: Wholly foreign-owned enterprises.
• Survey methodology:
  • Ranking-based calculation was used to determine the importance of trust elements.
  • A weighted average score was calculated based on the ranking (Rank 1 = 5 points, Rank 5 = 1 point).

Conclusion

The survey underscores the importance of trust in the China LSHC industry, particularly in regulatory compliance, HCP engagement, and product integrity. While technology is playing a growing role in trust-building, especially in compliance and fraud monitoring, JV companies and Chinese Cos face challenges in adopting new technologies and managing internal trust. The future of trust in the industry is likely to be shaped by digital innovation, data security, and employee development.