In the two past decades, the healthcare industry in China has been growing at a fast pace, as it is a tremendous challenge to provide healthcare for 1.3 billion people. According to Asia Market Information and Development Company, the dramatic expansions of the healthcare system, drug manufacturing, and health insurance have transformed China’s society and economy. Life expectancy has now reached 76.8 for women and 72.5 for men compared to 69.9 for women and 66.9 for men in 1990. Demographic transition from high mortality to low mortality has helped drive this increase in life expectancy. Primary diseases have also shifted from infectious to chronic. Cancer, heart diseases and cerebrovascular diseases are now top killers. As of now, spending on healthcare counts for over 5% of GDP and that will only continue to increase in the next decade.
Healthcare reform has been one of the key topics on the government agenda in China. Due to the rise in cost of healthcare, more than 10% of income is spent on healthcare, which is greater than that spent on education and transportation. This rise in healthcare cost could definitely have an outcome of the high cost of drugs. There are approximately 4,500 pharmaceutical companies in China, the majority of which are small players with limited local market reach. Rapid consolidation between medium and large players in the sector is anticipated since the Chinese government has been encouraging industry consolidation with an effort to regulate the industry and to better control the pricing of drugs.
However, China remains one of the world’s major producers of pharmaceuticals. Far outpacing other economies in the world, China is the world’s fastest growing pharmaceutical market. Although China has enjoyed the benefits of an expanding market for pharmaceutical production and distribution, the industry is suffering from minimal innovation and investment in R&D and new product development. The sector’s economies of scale have yet to be achieved. Most domestic manufacturers in the pharmaceutical industry lack the autonomic intellectual property and financial resources to develop their own brand name products. Most manufacturers rely on the repetitive production of Chinese medicine, low value-added bulk pharmaceuticals or generic drugs.
In general, Biotechnology is a rapidly growing sector in China. Both production and demand have witnessed significant surges in recent years. China will continue to remain a large importer for biotechnology pharmaceuticals to meet the growing domestic demand. Major imports include biotechnology vaccines, CSF, r-EPO, recombinant human insulin, recombinant human growth hormones, recombinant interferon, and other biotechnology pharmaceuticals.
As for the healthcare insurance industry in China, two main options are available, including social healthcare insurance controlled by the government and commercial healthcare insurance provided by private companies. At present, social healthcare insurance is under reform in order to control the increasing healthcare costs, but the development of commercial healthcare insurance in China is not inadequate. Although, the commercial healthcare insurance market has a great growth potential.
Despite these continual changes and developments, China's healthcare market remains the largest in the world. Because the Chinese healthcare industry is one of the fastest-growing sectors in China, growing at double digit rate each year, it will continue to provide a tremendously fast-growing market for imports and business opportunities for companies around the world.
For more information on the healthcare industry, download MarketResearch.com's free white paper. To learn more about China's Healthcare market, browse AMID Co.'s recent reports.
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Editor's Note:
This post was written by Rebecca Chen, Marketing Manager at Asia Market Information & Development Company.
About Asia Market Information and Development Company
Asia Market Information & Development Co. is one of the leading sources for up-to-date market information and research on the fastest-growing Chinese markets. We have published over 100 reports focusing on the Chinese healthcare industry. We provide hard-to-find market data and in-depth analyses. Our publications are intended to help international marketers identify business opportunities and promote their product sales in the Chinese healthcare markets.
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