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Feature

China's Challenge to Pharma

China Posted on: 06 Apr 06

Summary

China is a country that is rapidly modernising and as its economy grows its consumer base is changing. Many international biopharmaceutical companies have started to invest in China and believe that in the long-term the healthcare market offers huge commercial potential.

China is a country that is rapidly modernising and as its economy grows its consumer base is changing. Many international biopharmaceutical companies have started to invest in China and believe that in the long-term the healthcare market offers huge commercial potential. In 2002, IMS Health ranked China as the tenth largest pharmaceutical market in the world, with sales of US$6.1 billion and a growth rate of 8% (1).

Potential

China offers biopharmaceutical and other healthcare companies a range of commercial opportunities. Like many other rapidly industrialising nations, a growing proportion of the country’s population now lives in cities and so urbanisation is having a great impact on society. The changing epidemiological profile of the population has been accompanied by a rise in chronic diseases, particularly cardiovascular and respiratory conditions, and yet there remains a persistence of diseases associated with poverty and social inequality.

In October 2002, the United Nation Development Program and US-China Trade Organization co-sponsored a Chinese Biopharma Forum to discuss the opportunities and challenges facing the biopharmaceutical industry in China (2). The event covered a range of issues such as Chinese regulations concerning biological products, resources for clinical trials in the country, technology exchange between domestic and foreign companies and the internationalisation prospects for China’s biopharmaceutical sector. As well featuring representatives of major domestic and foreign biopharmaceutical companies, the forum included officials from the Chinese State Food and Drug Administration (SFDA) and the Ministry of Foreign Trade and Economic Cooperation (2).

Opportunities

As China has around a fifth of the world’s population, it is likely that major diseases found elsewhere in the world will affect a sizeable number of people. Thus a wide range of biopharmaceutical applications and approaches will be relevant to Chinese healthcare. In fact it is this range of disease profiles that has stimulated the government’s efforts to develop its own biopharmaceutical sector and attract back its researchers that have gained experience abroad.

Nevertheless, given the Chinese government’s drive to improve healthcare for its population, and the support of international healthcare organisations, there is a demand for companies to develop medicines to tackle diseases that affect the poorer sections of society. A limitation for biopharmaceutical companies is that, at present, only a proportion of the population can afford modern medicines. However, this section of society is sufficiently large to offer companies a promising consumer base for the future. As with other emerging markets, companies believe that in the long-term the section of society that can afford new medicines and healthcare services will increase. Thus it is in their interest to establish themselves in the country early on in order to better understand the market and its operating conditions. The last decade has seen numerous companies investing in China, particularly because they have seen their rivals do so.

Outlook

Market predictions all suggest that the Chinese biopharmaceutical market is set to grow, but it is unclear as to what course this will take, as widening access to healthcare across the country represents a huge challenge to the government. Nevertheless opportunities abound for ambitious pharmaceutical companies keen to make the most of the global marketplace. Yet to take advantage of potential opportunities companies must understand how the Chinese market is evolving and not be too swayed by preconceptions.

References

  1. Anon (2003). China. IMS Health Asia. http://www.imshealthasia.com/141.html
  2. Anon (2002). China Biopharma Forum to Be Held. Embassy of the People’s Republic of China. News. 7 May 2002. http://www.china-embassy.org/eng/zt/wto/t36947.htm

Dr Faiz Kermani

Last updated on: 27/08/2010 11:40:18

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