New report on China's pharmaceutical and healthcare market

In the Q110 update of “China Pharmaceuticals and Healthcare Report” from Research and Markets, China has maintained its fourth place in the Pharmaceutical Business Environment Ratings matrix for the 15 key markets in the Asia Pacific region. Globally, the country places 18th out of the 71 countries surveyed worldwide, indicating its vast potential. Key attractions are its sheer size and the improvement of its economic and healthcare systems, although it is let down by among other factors rampant pharmaceutical piracy, substandard quality, bureaucracy and a poor legal framework. Nevertheless, regulatory improvements have occurred, including the recently implemented Green Channel approval for drugs that fulfill certain criteria which is intended to improve access to innovative medicines.

In fact, the commercial value of Chinas pharmaceutical market is expected to exceed that of a number of major European markets, including France and Germany, in the coming years. Having been barely affected by the 2008/09 global economic downturn, the authors expect the Chinese drug market to post a compound annual growth rate (CAGR) of 12.5% in local currency terms over the 2009-2014 period, to reach a staggering US$92.2bn. Key drivers of growth are the recently unveiled and ambitious CNY850bn (US$124.5bn) healthcare reform programme, the rising prevalence of civilisation diseases, booming population numbers, economic growth, the reform of regulations on foreign direct investment (FDI) and the strengthening of local tender, which will continue to attract foreign interest.
However, the attempt to improve healthcare coverage will come at a cost to pharmaceutical companies. In mid-October 2009, Chinas National Development and Reform Commission (NDRC) slashed the prices of 45% of the drugs included on the National Essential Drugs List (NEDL), which is covered by the maximum retail prices set by the central government. An average reduction of 12% applies only to grassroot outlets that currently stock the NEDL, with 49% of the drugs on the list unaffected, while the remaining 6% have received a modest price increase to boost production. An ancillary adjustment to the rules means that government-run basic medical and healthcare units can no longer sell drugs at a 15% mark-up.
The August 2009 publication of Chinas NEDL, which lists 307 products in total, has a number of glaring omissions. For example, despite facing a significant infectious disease burden, the state has not included any vaccines, atypical antipsychotics, biologicals or antiseptics in the list. Nevertheless, the government is aiming to make medicines more affordable by targeting their prices through a public bidding system at provincial government level. As a result, prices of generics are expected to fall by between 20 and 25%, and although select generic suppliers will clearly benefit from economies of scale smaller companies are likely to be pushed out of the market. The NEDL will be updated again in three years time, in line with economic development trends, disease profile and the progression of science, with the government expecting a universal uptake by state facilities in 2020.
Key Topics Covered:
• Executive Summary
• SWOT Analysis
• Pharmaceutical Business Environment Ratings
• China - Market Summary
• Regulatory Regime
• Industry Trends and Developments
• Industry Forecast Scenario
• Competitive Landscape
• Company Profiles
• Country Snapshot: China Demographic Data
• Methodology
• Forecast Tables



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