Biotechnology, Pharmaceutical and Life Science Reports and Courses

Main Pages

Best Selling Products

BioNewsCast Press Release Distribution Service

Bioinformatics Market Potential

Vaccine Research & Development 2009

Veterinary Diagnostics Markets

Practical Guide to Finding Partners in Pharma & Biotech, 2nd edition

New Products

Advanced Wound Management Pipeline Technology and Market Forecasts to 2015

Artificial Disc Replacement Pipeline Technology and Market Forecasts to 2015

Brazil Anesthesia and Respiratory Devices Market Analysis and Forecasts to 2015

Brazil Orthopedic Devices Market Analysis and Forecasts to 2015

Canada Anesthesia and Respiratory Devices Market Analysis and Forecasts to 2015

Canada Diabetes Care Devices Market Analysis and Forecasts to 2015

Canada Medical Equipment Market Analysis and Forecasts to 2015

Cardiac Assist Devices Pipeline Technology and Market Forecasts to 2015

China Medical Equipment Market Analysis and Forecasts to 2015

Chronic Diseases on the Rise: Personal Health Systems to Play a Key Role in Disease Management

BioPortfolio | Access China | Chinese Pharmaceutical Industry

Chinese Pharmaceutical Industry

Executive summary

China has established a pharmaceutical industry structure, and has become one of the largest pharmaceutical producers in the world. The Chinese pharmaceutical industry has increased in value with an annual average growth rate of 16.72% over the last few decades.

However, the industry is still small-scale, with a scattered geographical layout, duplicated production processes, and outdated manufacturing technology and management structure. The Chinese pharmaceutical industry also has a lower market concentration and weak international trading competitiveness, coupled with a lack of patented pharmaceuticals developed in-house.

As China joins the World Trade Organization (WTO) (see section 4.1), it will need to integrate more completely into the global economy. The international competition will place an intense pressure on the Chinese pharmaceutical industry and further open the door to a lucrative market for non-Chinese companies, especially for pharmaceutical producers and manufacturers. Accession to the WTO will bind China by fundamental WTO principles, such as improved transparency and the strengthening of commercial legal procedures. China’s WTO commitments include the tightening of rules on intellectual property, tariff concessions, and market access of non-Chinese service suppliers engaging in the distribution of pharmaceuticals. All such moves will create additional business opportunities for non-Chinese pharmaceutical companies in China, and in turn, place an intense pressure on the Chinese pharmaceutical industry.

This report will discuss the state of the Chinese pharmaceutical industry and the opportunities available to non-Chinese pharmaceutical companies doing business in China, based on Chinese official statistics.

In a move to open up and expand the industry, Chinese authorities have permitted investors from outside China to set up non-Chinese investment enterprises, including:

• Sino-foreign equity joint ventures (joint venture by Chinese and non-Chinese investors)

• Wholly foreign-owned enterprises (solely funded by non-Chinese investors)

• Sino-foreign contractual joint ventures (joint venture by Chinese and non-Chinese investors).

Sales derived from non-Chinese investment enterprises have made up 22.23% of the total Chinese domestic market.

So what are the key factors to encourage non-Chinese companies to invest in China? The advantages of business investment in the country include the vast consumer demand for pharmaceuticals, the lower labor costs and the changes resulting from economic reform. Changes to the patenting laws in full compliance with the requirement of the TRIPS Agreement and the lack of Chinese pharmaceutical R&D have also left gaps in the market that can be exploited by non-Chinese companies.

How to capture business opportunities in China? Non-Chinese pharmaceutical manufacturers can capture business opportunities in China by establishing wholly non-Chinese-owned pharmaceutical companies and produce pharmaceuticals with in-house patent rights. Another way is to purchase existing pharmaceutical companies, and produce goods using pharmaceuticals developed in-house, substituting for older agents.

Organizations and companies are being created in China that can help companies from outside the country to create these relationships, and resources and help are available from Governments and trade bodies outside China.

Professor Xiaoming Wu, Chancellor China Pharmaceutical University said of this report:

"This is an important report that looks at the World Trade Organization (WTO) implementation and business opportunities for international pharmaceutical companies in China. The comprehensive analysis of the multifaceted pharmaceutical industry and market, based on full and accurate statistics, helps guide the reader through the many changes transforming the Chinese pharmaceutical sector.

Indeed, as shown in this study, China is one of the fastest growing global economies. It has achieved and maintained an average GDP growth rate well above 7% since the 1980s. The domestic pharmaceutical industry has been a key contributor to the country’s impressive economic growth. As one of the world’s major producers of pharmaceuticals, the sector achieved an annual compound growth rate of 16.7% between 1978 and 2003. Sales over the same period increased by 16.5%. Both far outpaced other economies in the world, making China the world’s fastest growing pharmaceutical market. Although China has enjoyed the benefits of an expansive market for pharmaceutical production and distribution, the industry is suffering from minimal innovation and investment in R&D and new product development. The sector’s economies of scale have yet to be achieved. Most domestic manufacturers in the pharmaceutical industry lack the autonomic intellectual property and financial resources to develop their own brand name products. Most manufacturers rely on the repetitive production of low value added bulk pharmaceuticals and imitation drugs.

China’s entry into the WTO, in December of 2001, opened the door to a lucrative market for foreign companies, and especially for pharmaceutical manufacturers and distributors. Accession to the WTO will bind China by fundamental WTO principles, such as improved transparency and the strengthening of commercial legal procedures. China’s WTO commitments also include the tightening of rules on intellectual property, tariff concessions, and permission of foreign distributors’ entry into domestic market. These commitments will help reduce the risk of doing business in China and encourage increased flow of trade and investment, enhancing the business opportunities for international pharmaceutical companies and investors. This study highlights all such implications in detail.

I welcome this report and believe that it will provide a valuable contribution to those looking to establish a presence in China or gain greater market penetration."

Table of Contents

Executive summary

Foreword - Professor Xiaoming Wu, Chancellor, China Pharmaceutical University

1. Introduction

2. An overview of the pharmaceutical industry in China

2.1. Economic reform and the open door policy in context

2.2. The growth of the Chinese pharmaceutical industry

2.3. The structure of the Chinese pharmaceutical industry

2.3.1. Industry output

2.3.2. Import and export

2.3.3. The industry layout

2.4. R&D in China

2.5. Marketing approvals and manufacturing

2.6. Non-Chinese investment enterprises in China

3. Competing in the international market

3.1. Introduction

3.2. Measuring trading competitiveness

3.3. Potential trading competitiveness

4. Business opportunities for non-Chinese pharmaceutical firms in China

4.1. Factors affecting business opportunities in China

4.1.1. Chinese Authorities' commitments and administrative measures

4.1.2. Chinese consumer demand for pharmaceutical products

4.2. The factors bringing business opportunities

4.3. How to capture business opportunities

4.4. Which would be the profitable fields for non-Chinese pharmaceutical firms?

5. Conclusion

6. Appendices

6.1. Case studies

6.1.1. Sino-Swed Pharmaceutical Corp.LTD (SSPC)

6.1.2. Pfizer (China) Pharmaceuticals Limited

6.2. References

6.3. Glossary

6.4. Source data

6.5. Author’s Biography

6.6 Company’s Description

Format: Electronic copy: US$600.00

Price

BioPortfolio uses RBS Worldpay Secure Server for credit card transactions