| By Alex Shaw, Pharmaceutical Manufacturing News |
| Wednesday, 12 August 2009 |
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After experiencing a low in 2006 and an upturn in 2007,
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China's pharmaceutical industry has entered a period of rapid development since 2008. The industry achieved a total output value of RMB758 billion (approx. US$110 billion) for 2008, representing a year-on-year increase of 23 percent, with a total profit of RMB75 billion (approx. US$11 billion), up 24 percent year-on-year.
During the first half of 2009, the segment reported an added value of 14 percent year-on-year. As a part of the new medical reform put in placed by the Chinese government, investment totaling RMB855 billion (approx. US$126 billion) has been flowing into the domestic pharmaceutical market.
The new medical reform is expected to inspire overseas pharmaceutical manufacturers to set up R&D centers in China.
Industry researchers pointed out that the investment made by the Chinese government to fund |
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the new domestic medical system has brought about tremendous market demand.
In light of this, a large number of foreign pharmaceutical enterprises have begun to exploit the Chinese pharmaceutical sector and build partnerships with local leading companies in a move to control the domestic drug distribution network.
The new medical reform is forecast to help multinational pharmaceutical enterprises dominate China’s second- and third-tier cities.
China’s first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen only account for 21 percent of the domestic market, while second-tier cities including Chengdu, Hangzhou, Xi'an, Wuhan, represent 37 percent.
In view of this, international medicine makers have been extending their businesses into the second-tier cities. In addition, pharmaceutical giants also send sales representatives to hospitals of the third-tier cities to control local sales channels. The new medical reform is on target to contribute to the introduction of medical products specific to the
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Chinese market. Multinational drug manufacturers are planning to launch a group of drugs owning broad market prospects in China. Drugs involved in cancer and cardiovascular diseases are considered to have higher market demand.
Despite the financial crisis, China’s pharmaceutical industry continues to yield great growth opportunities.
Overseas pharmaceutical companies are sparing no effort in setting up R&D centers in China in order to conduct more extensive and in-depth cooperation with local enterprises, providing evidence that the Chinese pharmaceutical market can look forward to an investment boom in the near future.
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