The scale of China's medical market reached to 926.1 billion yuan (US$149 billion) in 2012 and is expected to race forward to 2.3 trillion yuan (US$369 billion) in 2020 as the country's population ages, according to the Chinese Academy of Social Sciences.
The country's medical market will grow annually by 12% from 2013 to 2020, reaching 1 trillion yuan (US$160 billion) in 2013. Beijing, Shanghai and Tianjin have contributed the most to the market, said the organization.
Supporting the burgeoning number of elderly and the country's increased purchasing power has augmented the demand for medicine, it added.
The combined growth rate of China's medical market had reached more than 20% from 2005 to 2010 because of fewer pharmaceuticals and the strong influence of government policy in the market, said the organization.
Multinational pharmaceuticals have accounted for a large proportion of medicine supply among high-tier hospitals. An insufficient number of domestic suppliers will mean continued reliance on foreign medicine. The government controls almost completely controls the distribution of medical supplies.
Source: Want China Times
Showing posts with label market. Show all posts
Showing posts with label market. Show all posts
Thursday, 3 January 2013
Friday, 28 December 2012
China healthcare: huge market, huge risks for western multinationals
by Barry S. Cohen
It's little wonder that multinational health care companies (MNCs) may be salivating at the opportunities in China:
1) By 2016 China is expected to be the second-largest drug market, forecast to reach nearly $165 billion that year
2) During the next several years the Chinese drug market is supposed to grow at a rate of 15% to 18% a year compared to little or no gains for the Western countries
3) Growing affluence is permitting many Chinese to pay out of pocket or pay high insurance deductibles to gain access to innovative Western medicine
4) China needs new drugs to treat higher than average incidences of hepatitis B and neck and head cancers. China also has growth potential for drugs to treat arthritis, diabetes, osteoporosis, high blood pressure, high cholesterol, depression HIV/AIDS.
However, all that glitters may not be gold. The chance of a recession as well as internal politics could make it difficult for the multinational pharmaceutical companies to make strong headway into the Chinese market. Nowhere in the world are the pressures greater to expand access to better health care while at the same time controlling costs.
Examples abound. One policy decision eliminated differential pricing on approximately 100 drugs MNCs sold into China. For nearly two decades, these drugs had benefited from special pricing as part of an agreement between the Chinese government and the pharmaceutical industry. Furthermore, a blind bid and tender process reduced prices on some drugs by up to 90%. MNCs watched as domestic Chinese pharmaceutical companies bid prices down in an effort to use volume gains to offset collapsing margins.
Despite the caution flags, large MNCs continue to devote substantial resources to cracking the Chinese market. Both Pfizer and GlaxoSmithKline have made major moves to re-orient sales resources away from developed economies towards China. Eli Lilly and Novartis , among others, have opened new R&D facilities in China, primarily in Shanghai. And given the country's mammoth diabetes problem, Sanofi is moving deeper into the country. The company's Lantus insulin product is estimated to have 17% of the Chinese market.
Large pharmaceutical companies hoping to stake a claim in China may be eyeing two of the country's largest medical research testing companies as a vehicle to gain entry. Both WuXi PharmaTech and ShangPharma have been mentioned as possible takeover targets.
Even insurance company WellPoint has announced its entry with the hopes that it can develop a private healthcare insurance business. And medical device companies like Boston Scientific, Johnson & Johnson and Medtronic are also aggressively expanding into China. For more information about stocks in this space, our real time trading reports help investors identify opportunities before they happen.
Source: MSN Money
It's little wonder that multinational health care companies (MNCs) may be salivating at the opportunities in China:
1) By 2016 China is expected to be the second-largest drug market, forecast to reach nearly $165 billion that year
2) During the next several years the Chinese drug market is supposed to grow at a rate of 15% to 18% a year compared to little or no gains for the Western countries
3) Growing affluence is permitting many Chinese to pay out of pocket or pay high insurance deductibles to gain access to innovative Western medicine
4) China needs new drugs to treat higher than average incidences of hepatitis B and neck and head cancers. China also has growth potential for drugs to treat arthritis, diabetes, osteoporosis, high blood pressure, high cholesterol, depression HIV/AIDS.
However, all that glitters may not be gold. The chance of a recession as well as internal politics could make it difficult for the multinational pharmaceutical companies to make strong headway into the Chinese market. Nowhere in the world are the pressures greater to expand access to better health care while at the same time controlling costs.
Examples abound. One policy decision eliminated differential pricing on approximately 100 drugs MNCs sold into China. For nearly two decades, these drugs had benefited from special pricing as part of an agreement between the Chinese government and the pharmaceutical industry. Furthermore, a blind bid and tender process reduced prices on some drugs by up to 90%. MNCs watched as domestic Chinese pharmaceutical companies bid prices down in an effort to use volume gains to offset collapsing margins.
Despite the caution flags, large MNCs continue to devote substantial resources to cracking the Chinese market. Both Pfizer and GlaxoSmithKline have made major moves to re-orient sales resources away from developed economies towards China. Eli Lilly and Novartis , among others, have opened new R&D facilities in China, primarily in Shanghai. And given the country's mammoth diabetes problem, Sanofi is moving deeper into the country. The company's Lantus insulin product is estimated to have 17% of the Chinese market.
Large pharmaceutical companies hoping to stake a claim in China may be eyeing two of the country's largest medical research testing companies as a vehicle to gain entry. Both WuXi PharmaTech and ShangPharma have been mentioned as possible takeover targets.
Even insurance company WellPoint has announced its entry with the hopes that it can develop a private healthcare insurance business. And medical device companies like Boston Scientific, Johnson & Johnson and Medtronic are also aggressively expanding into China. For more information about stocks in this space, our real time trading reports help investors identify opportunities before they happen.
Source: MSN Money
Wednesday, 14 November 2012
China's medical equipment market shows huge growth
The Chinese healthcare and medical equipment
market is on a growth spurt that has Western OEMs salivating over its
sales potentials, and priming their supply chain for profit
opportunities in the world's most populous nation. Danger looms in the
$357 billion market, however, and failure to understand the challenges
of China's evolving healthcare industry could lead to missed
opportunities and losses for medical equipment vendors, according to a
research firm.
Researcher and market consultancy McKinsey projects the Chinese healthcare sector will nearly triple in value to $1
trillion by 2020 (from $357 billion in 2011) on demographic changes,
increased investment under the country's latest 5-year plan, and the
increased involvement of the private sector in healthcare delivery. The
mouthwatering growth has attracted Western multinationals in droves, but
according to McKinsey, an inevitable shakeout in the industry could
leave many late starters and losers disappointed.Read more: EBN
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