mercredi 7 août 2013

Market Research: market shares of pharmaceutical companies in China

In March 2009, China's government revealed plans for a sweeping healthcare overhaul, and committed RMB850 billion to develop the country's healthcare system between 2009 and 2011. Among its provisions were to increase the Basic Medical Insurance (BMI) coverage from approximately 65 percent of the population to 90 percent by 2011 to revise the national Essential Drugs List (the "EDL", medicines reimbursable under BMI); and to allow the National Development and Reform Commission (NDRC) to more strictly regulate pricing. A second phase of the healthcare reform plan, expected between 2011 and 2020, is to involve the establishment of a universal health care system by which all citizens will be able to access affordable drug and medical services.



Chinese pharmaceutical companies in Chinese market

Pharmaceutical distribution in China is highly fragmented, and often criticised for its inefficiency and lack of transparency. To illustrate the fragmentation by way of comparison, China's top three distributorsSinopharm Group, Shanghai Pharmaceutical, and Guangdong Jiuzhoutong Pharmaceuticalhad in combination less than 20 percent of overall market share in 2009; while in the U.S., the top three pharmaceutical commerce companies together held a 96 percent market share.
Concentration has been slightly improved. Large companies are gaining more market share through acquisition, with a view to improving operational capabilities and cost effectiveness. For example, Sinopharm completed 24 acquisition-related transactions in 2010, including three stake-raising investments, which together brought the company a nearly RMB4.7 billion increase in sales. In January 2011 alone, Sinopharm completed another 12 acquisitions.

Foreign pharmaceutical companies in Chinese market

The involvement of many foreign pharmacy enterprises operating in China can be dated back to a century ago. Bayer of Germany, the inventor of aspirin, began trade with China in as early as 1882.Hoechst AG, known as Aventis, sold its products through 128 distribution agents across China in 1887, becoming China’s No.1 Western medicine and dyeing provider. The US Eli Lilly & Co. opened its first overseas representative office in China’s Shanghai in 1918. ICI, the predecessor of the world’s No 3 pharmacy enterprise AstraZeneca, began trade with China in 1898, and still maintained its old-time office by the Huangpu River in Shanghai.

In recent years, more and more western pharmaceutical corporations, such as GSK, Roche, Novo Nordisk, and others, have come to China and set up R&D centers. Many world leading pharmaceutical companies have established joint venture manufactories in China. Some have even set up sole propriety manufactories. As of 2004, amongst the largest 500 overseas enterprises, 14 of them are pharmaceutical companies.

As of 2004 (three years after China's WTO entry), nearly all global pharmaceutical companies have already completed their accession into the Chinese market and will gradually shift their focus to research development. The main reasons for overseas companies coming to China have been to save costs by using the extensive science and technology research bases currently in place in China, the abundant human resources, and less expensive medical and clinical trials.

Source:
Market Research Company China

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