SHANGHAI, May 27, 2013 /PRNewswire/ -- Rising incomes, improving healthcare infrastructure, and enhanced insurance systems have propelled the Chinese pharmaceutical market to become the third-largest in the world. The entry of multinational companies has granted local manufacturers access to advanced technologies and further aided market development in the country.
New analysis from Frost & Sullivan (http://www.lifesciences.frost.com), Chinese Pharmaceutical Market, finds that the market earned revenues of $131.63 billion in 2012 and estimates this to more than double to $280.30 billion in 2016.
"Apart from the opportunities created by government healthcare reforms for essential drug systems as well as medical insurance and primary healthcare solutions, the impending expiry of several drug patents boosts the prospects of local pharmaceutical manufacturers in China," said Frost & Sullivan Healthcare Research Analyst Kai Lu.
While government reforms have fuelled market growth, they have also led to challenges in essential drug tendering, market access, and price setting, affecting certain manufacturers' margins in the country.
Therefore, local companies must build strong market-access capabilities, and engage with the government to secure national and provincial reimbursement listings. They also need to strengthen their relationships at the provincial and city levels by investing in commercial teams and distribution partnerships.
It is clear that companies with rich product portfolios will be better positioned to meet the diverse needs of different regions. Large domestic pharmaceutical manufacturers with a powerful technology team to maintain product quality will enjoy higher competitiveness and clinical performance. The integration of active product ingredients and pharmaceutical formulations will also maximize profit margins.
"Innovative products will hasten market growth in China, as mature products with expired patents experience significant price reduction and poorly-differentiated products lose market share," opined Lu. "Hence, local pharmaceutical companies should widen their portfolio and expand presence in growing segments through partnerships and acquisitions."
In fact, the market in China has already consolidated its strategic position globally with local mergers, acquisitions and joint ventures, and investments in private infrastructure are expected to go up significantly.
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