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Economic Analysis for the Chinese Healthcare IndustryPublished by: Frost & Sullivan Published: Apr. 6, 2007 - 39 Pages Table of Contents
AbstractWith an average 9.0 percent growth in the gross domestic product (GDP) since the 1990s, China has emerged as the fourth largest economy in the world after the United States, Japan, and Germany. This growth is spearheaded by the healthcare industry, which was the seventh largest in the world in 2005, and is expected to become the fifth largest by 2010. This rapid development owes largely to its pharmaceuticals sector, which recorded a compound annual growth rate (CAGR) of 17.6 percent during 1980-2004. The economic reforms and open door policy of the 1980 and accession to the World Trade Organization (WTO) in 2001 opened up the pharmaceuticals sector to global competition. Reduced tariffs, standardized review and approval process for drugs and medical devices, as well as decentralized drug distribution increased the exchange of goods and services and enhanced foreign investment in the healthcare industry.The Chinese healthcare system is mostly funded by the private sector, whereas the majority of healthcare services are provided through government-run healthcare institutions. Urban employees are covered under government-operated mandatory basic medical insurance system (BIS), co-funded by the employer and employee. The rural population can seek voluntary health insurance under the Central Government’s rural co-operative medical system (RCMS), co-funded by the Government and the rural population. On an average, the share of Government and private sector in the total healthcare expenditure is in the ratio of 40 is to 60. ‘Out-of-pocket’ accounts for nearly 60.0 percent of the healthcare expenditure. The total healthcare spending has risen steadily in China from 3.7 percent of the GDP in 1995 to 5.6 percent in 2005, and it is expected to rise to 8.0 percent by 2010, creating opportunities for the healthcare industry. Active government encouragement has made China one of the most attractive destinations for conducting clinical trials. The country’s low-cost structure and availability of talented scientists support the growth of this industry. Government initiatives can significantly change the segmentation of the drug market. With the reduction in import duties, regulatory reforms, and rising purchasing power, the medical devices import market is also showing strong growth potential. Additionally, the country’s vast population facilitates patient recruitment and provides market for the finished products. Since generic drugs have traditionally dominated the Chinese healthcare industry, it is only recently that drug discovery has become one of the top priorities of the Government. It is proactively encouraging the production of innovative drugs from the traditional Chinese medicine (TCM) sector. Frost & Sullivan’s Healthcare Country Industry Forecast service provides vital inputs for evaluating the attractiveness of a country and its healthcare industry. Besides enabling decision makers to assess the impact of non-market forces, it also helps in identifying new market opportunities. This service provides a strong base for preparing contingency plans. In addition, investors can assess industry-specific risk factors as well as conduct a more in-depth micro research. Benefits of this Service Identifying New Market Opportunities The future trends and developments in the Chinese healthcare industry have been identified by taking into consideration the economic scenario of the country as well as analyzing global trends of the market. This analysis will provide valuable information to industry participants, which would aid in taking advantage of strategic opportunities in the Chinese healthcare industry. Understand Future Industry Trends The research service gives an insight into the economic factors affecting the Chinese healthcare industry. This will help participants to gauge the trends and insights in their respective markets and thereby, enable them to devise appropriate strategies to improve their market shares. Comprehend Policy and Regulatory Environment A detailed analysis of the economic policies and regulatory framework of the Chinese healthcare industry offers insights into the regulatory environment as it exists and the future direction of the same. Evaluate Industry Segment Potential The analysis of the segments of the healthcare industry along with a discussion of its vertical market segments provides details of the trends and forecasts for the segments of the healthcare industry as well as an insight in the key indicators and resources. This will help corporate planners in developing accurate business plans and enhance credibility to planning company resources. Get Full Details About This Report >> |
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