China is set to become the world’s fifth largest pharmaceutical market by 2010. This growth provides the perfect opportunity for businesses from the UK to invest in the pharmaceutical industry in China.
In 2009, the Chinese government stated that RMB850.0 billion (US$124.5 billion) would be invested into the healthcare sector over the next three years. This is in accordance of Healthcare 2020 reform, the public framework for healthcare that aims to provide safe, effective, convenient and affordable health services to the entire population by 2020. The reform also includes the building and upgrading of hospitals, as well as increasing the medical insurance coverage of the population.
China has also shifted focus onto R&D and innovation, with the development of science and technology parks for pharmaceutical and biotechnological research, rather than on the manufacturing and production side. This is in response to the realisation that, in the near future, China will lose the advantage of its large and cheap manufacturing force to places such as India, due to its ageing population.
The issue of IPR has been a considerable hindrance to companies wanting to enter the Chinese pharmaceutical market, although recently the government has made significant inroads to strengthen its protection. The IP system in China is now a substantial network; with highly qualified judges, short trials and low enforcement costs. But a continual presence and awareness on the ground in China is still required to police and enforce IP.
The Chinese government wants to encourage partnerships with foreign companies, expand R&D by domestic companies and to improve the quality and efficacy of pharmaceutical products. It is hoped that the fruits of this will dispel any notion of ‘Made in China’, cheap and mass produced, in favour of ‘Made by China’, whereby Chinese brands and products are synonymous with quality and value.
China aims to showcase the opportunities available in its pharmaceutical industry at the Shanghai World Expo, which is to be held from May to October 2010.
Further reading - An in-depth analysis of the Chinese pharmaceutical market is available from Espicom: The Pharmaceutical Market: China (published January 2010)
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