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China Pharmaceuticals and Healthcare Report Q3 2008

http://www.companiesandmarkets.com/Summary-Market-Report/china-pharmaceuticals-and-healthcare-report-q3-2008-51419.asp

Report Summary

In the late 1990s and early 2000s, China's pharmaceutical sector was substantially smaller than it is today, and was dominated by acute care treatments, with the majority of sales occurring at large hospitals. As the country's economy has developed, the sector has experienced year-on-year double-digit growth as the state encouraged the sector's development. Western multinationals have increasingly formed joint ventures with local firms, and smaller domestic players have been eliminated by the imposition of improved manufacturing standards. Consequentially, BMI is forecasting strong growth for China’s pharmaceutical market, which is expected to reach a valuation of US$88.61bn by 2012. Since May 2007, the Chinese yuan:US dollar ratio has decreased from CNY7.65:US$1 to CNY6.94:US$1, a fall of just under 10%.

There are likely to be two main effects of the strengthening yuan: first that Chinese partners in joint ventures with US firms will contribute more, and second that US exports to China will increase. Given that BMI's country risk team expects the ratio to reach CNY6.70:US$1 before the end of 2008, the aforementioned trends are likely to become more pronounced throughout the year. During Q208 and Q308, China's authorities increasingly cracked down on producers and prescribers of anabolic steroids ahead of the 2008 Olympic Games. Manufacturers of these agents have been added to a watch-list, while the Ministry of Health expects medical institutions to check the identity of patients before prescribing anabolic steroids and other hormone-containing drugs.

In July 2008 UK-based GlaxoSmithKline (GSK) announced that it planned to double its R&D capabilities in China. At that time, the company employed 170 research staff and planned to boost this figure to 200 by the end of 2008, and to 350 the next year. It is BMI’s view that more multinationals will be following GSK’s enlightened approach. The prevalence of obesity in China is rising fast as people add more meat and diary products to their diets and urbanisation and the associated trend of more sedentary jobs compound the problem. Latest research shows that of all the developing countries, only Mexico's growth in the proportion of the adult population who are overweight and obese is faster than that of China. Given the consequential health problems that will present over the medium term, BMI expects the frequency and intensity of healthy living campaigns in China to increase.

Table of Contents

Executive Summary ....5
China Pharmaceuticals And Healthcare Industry SWOT ...... 6
China Political SWOT .... 7
China Economic SWOT .. 7
China Business Environment SWOT................ 8
Pharmaceutical Business Environment Ratings ........9
Table: Pharmaceutical Business Environment Rankings For Q308 ........ 9
Limits Of Potential Returns........ 9
Risks To Realisation Of Returns ... 10
China: Market Summary .11
Regulatory Regime .12
Intellectual Property Issues ..... 13
Counterfeit Activities .... 14
Pricing And Reimbursement .... 15
Table: Five-Step Procedure For Drug Pricing In China ..... 15
Advertising Sector ......... 18
SFDA Scandal ............... 19
Other Regulatory Developments ... 20
Industry Trends And Developments ........23
Healthcare Sector ......... 23
Hospital Sector ............. 24
Epidemiology ................ 25
Overseas Activity .......... 27
Domestic Pharmaceutical Sector .. 28
Recent Developments In The Local Pharmaceutical Sector. 30
Distribution Sector ........ 30
Foreign Company Activity ....... 32
Acquisitions . 33
Traditional Chinese Medicines 33
Table: Traditional Chinese Medicine In China ... 34
R&D Activity 35
Table: Major Multinationals With R&D Facilities In China 36
Vaccine Sector .............. 37
Clinical Trials Activity .. 39
Biotechnology Sector .... 40
Active Pharmaceutical Ingredients (APIs)..... 41
Industry Forecast Scenario .43
Overall Market Forecast.......... 43
Table: China – Drug Market Data And Forecasts............... 44
Key Growth Factors – Industry 45
Table: China – Health Expenditure Data And Forecasts..... 46
Key Growth Factors – Macroeconomic ......... 47
Table: China - Economic Activity . 49
Prescription Market Forecast.. 50
Table: China – Prescription Drug Market Data And Forecasts (CNYmn unless otherwise stated) .............. 51
OTC Market Forecast ... 52
Table: China – OTC Market Data And Forecasts (US$mn unless otherwise stated) .............. 53
Generics And Patented Market Forecasts...... 54
Table: China – Generics And Patented Market Forecasts ... 55
Export/Import Forecasts .......... 56
Table: China – Pharmaceutical Trade Data And Forecasts (US$mn .... 57
Medical Device Market Forecast .. 58
China: Medical Device Market Data And Forecasts (US$bn unless otherwise stated) ........... 60
Other Healthcare Data Forecasts . 61
Table: China – Hospital Data Forecasts ....... 61
Key Risks To BMI’s Forecast Scenario.......... 62
Competitive Landscape ..63
Top Ten Chinese Pharmaceutical Companies In 2007 ........ 64
Table: Top 10 OTC Companies In China By 2006 Sales ..... 64
Top Ten Chinese Retail Pharmacy Chains In 2007.............. 65
Company Profiles ...66
Leading Multinational Companies 66
GlaxoSmithKline ........... 66
Pfizer ...... 68
AstraZeneca . 70
Merck KGaA 74
Sanofi-Aventis ............... 76
Novartis .. 78
Roche ...... 81
Merck & Co . 83
Bayer Schering Pharma 85
Indigenous Manufacturers . 87
North China Pharmaceutical Group Corporation (NCPC) . 87
China Biopharmaceuticals Holdings (CBH).. 89
Hubei Biocause Heilen Pharmaceuticalo ...... 91
Aida Pharmaceutical Holdings 93
Shijiazhuang Pharmaceutical (CSPC) ........... 95
BMI Forecast Modelling ..97
How We Generate Our Pharmaceutical Industry Forecasts ..... 97
Pharmaceutical Industry.......... 98
Pharmaceutical Business Environment Ratings Methodology .. 98
Ratings Overview .......... 98
Table: Pharmaceutical Business Environment Indicators ... 99
Weighting ... 100
Table: Weighting Of Components ................ 100
Sources ...... 100