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Pharma finding healthy China sales

Updated: 2013-10-22 07:24
By Yu Ran in Shanghai ( China Daily)
Pharma finding healthy China sales

The Chinese pharmaceutical market has emerged as a major driver of revenue growth for global drug firms, according to a new report at the PharmAsia-Shanghai Summit 2013 on Monday.

The analysis from McKinsey & Co, in cooperation with Elsevier Business Intelligence and BayHelix Group, showed China's pharmaceutical market has grown at a rapid compound annual growth rate of 21 percent over the past five years, reaching 600 billion yuan ($98.4 billion) in retail sales in 2012.

In a forecast developed jointly by McKinsey and the China Pharmaceutical Association, China's pharmaceutical market is projected to grow at about 17 percent annually through 2020, reaching 1.9 trillion yuan in retail sales. By then, China likely will be the second-largest pharmaceutical market in the world, the forecast said.

"China represents a unique opportunity for the pharmaceutical industry," said Frank Le Deu, partner and leader of McKinsey's Healthcare Practice in Greater China.

He added that challenges remain in increased costs and the government's drive to reform the operating model of public hospitals; thus, players will need to come up with new strategies to capture the huge opportunity for growth that China offers.

On average, sales in China by the top 10 multinational pharmaceutical firms accounted for 3.8 percent of their global business in 2012, up from 3 percent the previous year.

For many pharmaceutical firms, China is now a key contributor to absolute value growth in global revenues, a trend affected by ongoing pricing and access pressure in Europe and the United States, as well as a global wave of patent expirations.

The report also showed a substantial increase in revenues among the top 10 multinational pharmaceutical companies in China. From 2005 to 2012, the companies saw their cumulative sales leap from $2.5 billion to $12.3 billion.

"Obviously, China is an enormous market for us with its government getting improved healthcare for citizens, which include a significant aging population," said George Barrett, chairman and CEO of Cardinal Health, a US-based global pharmaceuticals wholesaler.

 
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