Espicom’s in-depth pharmaceutical market reports are ideal for executives wanting to understand the key drivers in pharmaceutical markets and have access to a wealth of statistical data. Each report opens with an outlook section that provides analysis of the market, 5-year market forecasts, national data projections, market outlook and key developments such as regulation, pricing/reimbursement, intellectual property, health facilities and government policy. The report also provides extensive background information, population trends, health status, health expenditure, organisation & administration, hospital services, medical personnel, healthcare development, market access information, trade data for raw materials and finished products and essential industry contacts.
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China, in terms of both its healthcare system and medical device market, is a nation of contradiction. As the world’s most populous country, and one in possession of the fastest growing major economy in the world, the nation offers a vast array of opportunities for overseas investors, complemented by a massive potential workforce and consumer base. The SARS (severe acute respiratory syndrome) crisis of 2003 forced the government to examine the Chinese health infrastructure in great detail and healthcare has become a priority of the present government.
Other priorities addressed by the government include the standard of rural healthcare which for many years has differed markedly in its quality to that in urban areas. In particular, the more basic practices of ‘barefoot doctors’ are being phased out, and medical personnel in these impoverished regions are now required to pass a more advanced series of qualifications in order to be recognised by the government. Increased investment from overseas in the form of a range of projects continues, and the HIV/AIDS epidemic in China has assumed greater significance, with the establishment of various programmes aimed at attempting to combat the disease.
However, several factors inherent in the nation’s make up undermine many of these opportunities and the progress that has undoubtedly been made since the 1980s. Most obviously is the fact that although there are some very high quality hospitals and clinics in the big cities, China remains a very poor country; GDP per capita is on a par with that in Indonesia or the Philippines. Rural facilities are badly-equipped, drugs are in short supply and trained staff are lacking. Healthcare in rural areas, home to some 800 million people, remains very basic and is in places wholly inadequate to deal with normal healthcare problems.
Funding is, of course, at the root of the problem, with most patients having to pay for at least a large part of the cost of treatment. With reduced funding from the State, hospitals now need to raise revenues from sales of drugs and medical tests, and this has quite often led to over-subscription of medicines and unnecessary, often expensive, tests for patients. Low disposable incomes further exacerbates the problem, making even basic healthcare beyond the means of most Chinese citizens.
The Chinese government has been attempting to improve healthcare funding through an expansion of healthcare insurance. Overall expenditure levels, however, remain low; annual health spending per capita is estimated at US$144 in 2008.
In addition, regulatory processes regarding registration of products and subsequent marketing remain complex, and in spite of some tentative attempts at reform the market continues to be difficult to penetrate. Intellectual property rights infringement, along with corruption, remains a problem in China. The government has however sent a strong message on where it stands with this problem, with the execution of former SFDA chief Zheng Xiaoyu in July 2007 on corruption charges, an unusually harsh punishment for such a felony, even in China.
In March 2008, the Health Ministry said it had uncovered 1,001 commercial bribery cases in the health sector in 2007. The cases involved bribery in the purchase and distribution of drug and medical equipment and service. Over 31.5 million yuan (US$4.5 million) was involved in these cases according to an official from the Central Commission for Discipline Inspection (CCDI) of the Communist Party of China based in the Health Ministry.
Drug registration remains the purview of the SFDA, and improvements in drug registration, combating counterfeiting and general healthcare provision if addressed successfully could make China a more viable pharmaceutical market in which to do business.
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