Today, we are happy to have Xiangjun Kong, a former Head of Legal for Sanofi China, to join us to share his legal healthcare/pharmaceutical experience and tips for young lawyers as well as his thought on the fast-changing healthcare law landscapes in China. Kong has extensive experience in the field of healthcare and life science and serves as the Deputy Director of Professional Committee of Translational Medicine, Chinese Society of Microcirculation, a professional member of Security and Assessment Committee of China Health Information and Health Medical Big Data Association, and a registered member of Beijing Health Law Society.
Kong: Xiangjun Kong (Partner, ShiHui Partners)
Sherry: Sherry Xu (Director, Hughes-Castell)
Sherry: Xiangjun, your pharmaceutical background, especially with Sanofi, began with your secondment in 2006. You are now a seasoned lawyer with more than 10 years’ experience in the industry. Could you shed light on this particular industry and market for those young legal talents who hope to get into the pharmaceutical and healthcare industry?
Kong: I was lucky to enter the industry, which I love, and am continuously given growth opportunities. It is something you can only obtain with luck, not merely by wishing for it. On that basis, I am very grateful to have a good friend who gave me such a unique chance at the end of 2006, a period that many people would say the “golden age” of China’s pharmaceutical industry has passed. The perspective made a lot of sense if you looked at it from a channel sales perspective.
However, being a witness to the compliance and innovation development of the pharmaceutical industry in China, observing the intertwinements of patients’ needs, social development, and technological innovation like the rising tide on the coast, wave after wave, retreating and stacking and coming up again, evolving, contradicting, challenging, and conquering, is already a pleasure! Having a chance to play a role in this development is a more meaningful thing to do. Actually, in China, the present is the best of times and also the worst of times for the pharmaceutical and healthcare industry.
The latest round of health system reform in China challenges the traditional models and concepts and has brought unprecedented impact to China’s healthcare industry. It has evolved from “Evidence-Based Medicine” (EBM)[i] to “Values-Based Medicine” (VsBM)[ii], upholding the value orientation of patient-focused, truth-oriented, pragmatic, and efficient processes. Like other industries, continuous innovations in products, business models and services are key for survival in the healthcare industry. China’s social and economic structure, as well as the general acceptance of new technologies and new trends, provide the best soil and stage for innovative activity. Facts speak louder than words; in capital markets, innovative pharmaceutical companies are always the most sought-after. The latest changes in multinational pharmaceutical companies’ rankings in China are a useful reference telling you which companies have determined to introduce more, newer and better products to the Chinese market. After all, China’s socio-economic situation is very different from that of 20 years ago. People desire a longer life span, a higher quality of life, and have the ability to afford better drugs and treatments.
For healthcare industry players, the current Chinese market is very different from a decade ago. Back then, the Chinese health system reform had just started. We lacked market experience; even an “old” drug been sold in mature markets (developed countries) for 20 to 30 years would still succeed in China due to the difference in the degrees of market and industry development. Nowadays, China’s economic growth and mass consumption upgrade are driving the increased demands for health development and spending. Chinese people are eager for more innovative and better medicines to cure diseases. In response to the change, multinational pharmaceutical companies have had to re-examine their China strategy. Chinese pharmaceutical companies have also experienced a similar situation. In the past, from chemical medicine to biological medicine, we were all followers along the way. Nowadays, Cytotoxic drugs are coming to the fore internationally. China actually has a higher starting point for standing on the shoulders of giants, which gives Chinese innovative pharmaceutical companies a golden chance to catch up with their international peers.
Although old drugs are mostly struggling with the increasing competition, they still have their market in China as there are such a large population base and uneven development across regions. Besides, those mature products have been used for 20 to 30 years and have earned sufficient clinical data and experience to prove their safety and efficacy. Thanks to the advanced development of digital and internet technology, we can re-energize these old drugs from the new perspectives of model innovation and service innovation such as chronic disease management, real-world data, patient peer education, or guaranteed products. A saying impressed me deeply: “pharmaceutical companies should not only manufacture and sell medicines but also offer patients total health solutions.” I genuinely believe this is the right direction for pharmaceutical companies to move forward.
Reform and innovation deliver a unique opportunity for Chinese pharmaceutical companies. As we all know, the recent reforms have brought bursts of warm breezes to Chinese pharmaceutical companies. They, especially private enterprises, have relatively low cost and flexible operating models with rich social resources as back-up which is how they can catch up with multinational pharmaceutical giants. Even though Chinese companies do not have as rich product lines as other global pharmaceutical companies, maybe due to the late entrance to the market and limited funds, good cost control measures are still key to Chinese pharmaceutical companies’ core competitiveness.
Sherry: What types of legal services and talent healthcare enterprises need to cope with continuous changes in the highly competitive business world?
Kong: Enterprises are driven to be innovative by public policies and market trends. Their in-house teams should embrace the changes with an inventive and tolerant attitude. Only by doing this can they understand the company’s development and the business department’s needs and be a true “business partner.”
It is easy to say, and everyone understands the truth, but it is never easy to do. Lawyers are trained to be cautious and rigorous, to be calm and rational analysts. For us, the business department’s risk-taking preference and act-before-thinking style are a bit too gung-ho; however, we understand this is the nature of their roles in the corporate. While due to our sensitivity to the word “responsibility,” we are particularly sensitive to taking the blame for being an obstacle for doing business.
Can we still be true “business partners”? Of course, we can! If we would understand the company’s expectations and positioning of in-house legal, ensuring we are in a better position to assess our advantages and values to the business, and probably have more tolerance of risk than a “lawyer’s lawyer, “and be a “business-oriented lawyer” to our business colleagues.
Firstly, in my opinion, a good in-house counsel, in addition to our core competence that is the basic legal knowledge and solid technical skills, is more important to have a more comprehensive and profound understanding of the company’s strategies and business.
Secondly, you should be passionate about your industry and always maintain an open and keen-to-learn attitude as the business and policy environment we live in is changing fast. In the healthcare industry, there are new policies and trends almost every day. Without a humble learning attitude, the knowledge and technology that a person has acquired will soon become obsolete. Also, “learning” is not only in the professional scope of law; more importantly, it is to understand the industry and business. The legal profession is our core competence in our job but limiting ourselves to legal matters alone is far from enough for legal affairs.
Thirdly, you need to be more proactive and willing to bear more responsibility onto your shoulders. Don’t always complain or be pathetic! Since it is an innovative industry, there may be some scenarios, strategies, and designs that no one has prior experience. Anything that has gone to the legal department won’t be simple. At this point, some minor mistakes are inevitable. As a partner to the business team, our responsibility is to bear the consequences with our business team colleagues.
Fourthly, train up “soft skills”. Knowledge and information are more and more transparent these days, we are no longer able to assess a legal counsel merely on his/her familiarity with the rules and cases (because there are various powerful legal AI applications available easily), but also the ability to communicate, coordinate and influence others. These “leadership” elements, in my opinion, are at least as important as the legal skills of a lawyer.
In conclusion, the environment is changing, so the in-house legal department and legal counsel must embrace the changes. After the Covid-19 pandemic, most companies will become more cautious in terms of departmental staffing and hiring budgets. In-house legal departments are used to being the companies’ cost centers, therefore we need to provide more cost-effective and practical legal support. Only in this way can we talk further on occupational safety and consider career advancement.
Sherry: How did you successfully transition from legal affairs to a business position, and what exactly did the business position involve? Later, what kind of considerations did you face in wanting to return to private practice? And how can previous in-house experience benefit you in your second stint in private practice?
Kong: When the Sanofi regional team came to Shanghai to discuss its rare disease business in China, the business team mentioned the patients’ difficulties with payment during the discussion. Due to doubts about regulations and policies, our discussion was at a deadlock. At that time, I said this problem could be solved and then proposed some initial, random ideas for a plan without a thorough think-through. The consequence was that everyone was very impressed to find the in-house legal team could develop some business solutions. Secondly, since the legal team proposed it, it was able to lead the plan’s refinement and implementation!
During the final formulation of my proposed solution, I had developed deep cooperative links with and understanding of the rare disease team. Thus, when the head of this team left, he recommended that I take over. Post-succession, I was primarily responsible for marketing, sales, and patient relations. Also, I needed to coordinate the cooperation between the Medicine and the Government Affairs departments. The experience of working in the business team was precious to me. Whenever I was given a chance to plan, organize, and implement marketing activities, I could fully comprehend the business team’s considerations on project details and better understand the risk control point. Whenever I participated in any marketing event, I had the opportunity to learn the industry experts’ views on the industry, policies and the wider profession. It has been of great benefit and given me a more profound understanding of the industry. At present, I still want to participate in these business activities to keep up with the industry’s dynamics and changes.
Let us talk about the legal profession. The key to my achievements is not the opportunities of working across business and legal functions, but the motivation. I think the foundation of everything is “self-awareness.” Let us face our hearts sincerely and ask ourselves what kind of work we like, what are our strengths and weaknesses, and our ultimate personal development goals. I do not think that only being the leader and the person in charge of the department can be called a career goal. Doing something I like and being competent at allows me to balance my life, work, family and hobbies. This kind of career development makes me feel more comfortable.
Of course, if you have made a choice and decision, you must do your best to do it. In the above, what I have shared are the current requirements for in-house legal counsel. I think these requirements, whether it is professionalism, business understanding, responsibility, or leadership, are required at any level. These are the requirements that everyone should remember within their careers; don’t forget to keep learning and having self-examination. Don’t be afraid of making mistakes at work (not to make low-level mistakes, of course) because there can be no perfect solution at work.
In addition, we should learn how to support business teams. I used to be very close to my business colleagues. Not only did I attend business department meetings, but I also went to the front line as a participant. These give me a concrete understanding of the business operation. For example, a few years ago, from a chat with my business colleagues I knew installment payments could facilitate the use of high-priced anti-cancer drugs for patients. This experience left a deep impression on me and inspired me to design similar PAP (patient assistance program) projects.
At last, don’t stop dreaming. It’s certainly not easy to live your career your way. Go your own way and don’t live the ideals of others. When encountering setbacks and difficulties, don’t give up easily.
Legal services in Mainland China have been enhanced and developed for 40 years. During these years, will the requirements or expectations for legal services remain unchanged? The answer is no. Take commercial legal services as an example; we now are not only focusing on professionalism but also emphasizing our understanding of the industry. With the enhancement of clients’ legal awareness and in-house legal departments, nowadays clients expect external lawyers to provide increased value-add and more effective practical advice based on their expertise. And I’m thankful for my previous in-house legal and business experience with Sanofi, which can differentiate me from other healthcare law practitioners and help me better serve my clients.
[i] For example, from “Shen-nung Pen-Tsao Ching” to clinical trials.
[ii] The practice of medicine incorporating the highest level of evidence-based data with the patient-perceived value conferred by healthcare interventions for the resources expended. Also, the requirement for medicines is not only to be effective, but also to be compared to similar products, involving quality and cost control.