2013-12-26 00:47:06 - Recently published research from Business Monitor International, "China Pharmaceuticals and Healthcare Report Q1 2014", is now available at Fast Market Research
Multinational pharmaceutical firms' commitment to the Chinese market is underpinned by the potential of the healthcare sector. The sector itself is supported by consistent government efforts, thereby increasing patients' access to these drugs. We would also highlight risks of operating in China, such as the anti-bribery investigation and volatility caused by tender timings. Headline Expenditure Projections
* Pharmaceuticals: CNY453.2bn (US$71.8bn) in 2012 to CNY532.4bn (US$85.9bn) in 2013; +17.5% in local currency and +19.6% in US dollar terms. Forecast unchanged from Q413.
* Healthcare: CNY2845.6bn (US$451.1bn) in 2012 to CNY3281.6bn (US$527.6bn) in 2013; +15.3% in local currency terms and +17.0% in US dollar terms. Forecast unchanged from Q413.
Full Report Details at
- www.fastmr.com/prod/754498_china_pharmaceuticals_and_healthcare_ ..
Risk/Reward Rating: China's Pharmaceutical Risk/Reward Rating (RRR) score
for Q114 is 64.8 out of the maximum 100 under our newly improved RRR system. The country scored above average for the majority of the indicators and sub-indicators including overall market expenditure, sector value growth, patent respect and policy continuity. Consequently China is ranked fourth, behind Japan, South Korea and Australia among the 19 key markets in Asia Pacific.
Key Trends And Developments
* In November 2013, Merck Serono announced that it will to invest EUR80mn (US$108 mn) in a new manufacturing facility to be located in Nantong Economical Technological Development Area, Shanghai. According to the firm, the facility will focus on the bulk production and packaging of Glucophage (metformin), Concor (bisoprolol) and Euthyrox(levothyroxine) - Merck Serono's treatment for diabetes, cardiovascular diseases and thyroid disorders respectively. The construction of the site is scheduled to start in 2014 while commercial production is expected to commence in 2017. Allan Gabor, general manager and managing director of Merck Serono in China stated that this facility 'will become Merck Serono's second largest pharmaceutical manufacturing site in the world.' In addition, the firm stated that the drugs produced in the plant are covered under China's essential drug list.
* In the same month, Wei Yulin, the chairman of Sinopharm Group stated that the firm hopes to buy one hospital by the end of 2013 and several more in 2014, riding on the government's liberalisation of the hospital sector. In October 2013, China State Council released its plan 'Opinions on Promoting and Developing Health Services', further expanding on the country's aim to provide affordable healthcare for the population, involving private players including hospitals and insurance firms
* In September 2013, GE Healthcare Life Sciences and JHL Biotech announced plans to build a KUBio modular biopharmaceutical factory in the Biolake Science Park in Wuhan, China. KUBio is a GE Healthcare approach to rapidly establish biopharmaceutical manufacturing capacity by delivering a ready-to-run facility in 14 to 18 months, speeding up the construction process significantly. JHL Biotech expects the facility to be validated for commercial production by mid-2015.
BMI Economic View: While the outlook for China's traditional economic growth drivers such as heavy industry and real estate construction remains cloudy, the outlook facing the more consumer-focussed industries is relatively strong over the medium term. Overall, though, as the traditional sectors remain the dominant drivers of the economy, we remain below consensus in our real GDP growth outlook, and caution that the inevitable bursting of the ongoing credit bubble could also serve to undermine the profitability of the consumer-focussed industries. We are revising up our forecast for 2013 to 7.6% from 7.5% previously, while maintaining our downbeat forecast for 2014 of 6.7%.
BMI Political View: Early indications following the conclusion of the Chinese Communist Party's Third Plenary Session chime with our view that economic reforms resulting from the highly-touted meeting are likely to be evolutionary, rather than revolutionary, in nature. That said, it is still far too early to fully gauge the outcome of the plenum, and we note that a renewed slowdown in total social financing (TSF) could be the harbinger of a broader economic restructuring in the offing.
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