Since 2013, the government has promoted the ‘Chinese Dream’ and the latest trends in the healthcare space show the potential for improving the overall welfare of the population. Pharmaceutical companies have also recently seen a huge increase in sales, with some leading firms reporting double-digit growth in the country in 2017. What does this mean for the companies and for the people?
The recent relaxation of regulation has allowed foreign companies to invest in the Chinese pharmaceutical market. International investors have seen an increased trend in Exchange Traded Funds (ETF) and many are focusing on the healthcare sector. This paves the way for easier market entries for foreign companies operating in the healthcare space, including pharmaceuticals and insurers.
At the same time, there is an increase in the demand for health care as the population in China is ageing and increasingly wealthy. Combined with capital injections and government policies to support innovation, the Chinese pharmaceutical industry is entering, what some call a ‘golden era’. With the demand for healthcare increasing in China since 2012 there have been a 49.2% increase in the number of licenced doctors in the country and a 25.8% increase in the number of hospitals.
A further statistical analysis shows that, in 2017, China was the 2nd largest insurance market in the world, and the 2nd largest health insurance market in the world, based on Axco's information. With a total insurance market premium of USD 541bn in 2017, out of which accident and health were USD 78bn, there are huge opportunities for insurers as well as other companies operating in the healthcare space. According to IQVIA, in 2017 China was also the 2nd largest pharmaceutical market globally, valued at USD 122.6bn and is expected to grow to between USD 145bn and USD 175bn by 2022.
So how do regulations follow this projected growth? In 2017, the China Food and Drug Administration (CFDA) introduced a set of reforms, including allowing clinical trials to be conducted outside of China. The same year, in an effort to internationalise the market, China joined the International Council for Harmonisation (ICH), which aims to deliver harmonised guidelines for global pharmaceutical development and regulation. It‘s not just the big corporations which could benefit from the CFDA rules, the changes could also give hope to the population.
China has a huge rural population, many of whom live in poverty and this has led to large differences in the health status of the rich, urban population and the poor, rural population. Some experts also fear a ‘cancer crisis’ in China, with the majority of cancer cases caused by factors such as smoking, water contamination and air pollution. With approximately 700,000 new cases of cancer diagnosis annually, China has nearly a third of all cancer patients globally.
The efforts by the government to open up the pharmaceutical market and make foreign investments more efficient will hopefully trickle down to easier access to medical care and medication for the Chinese population even in the remote rural areas.
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At the Healthcare Capital Summit 2017, Werner Cautreels, CEO of Selecta Biosciences said:
“China is no longer an emerging market. Instead, to any pharmaceutical companies which are committed to taking the leadership position in the fierce global competition, China is an important strategic priority”.