Big pharma companies have made China a major target in recent years, with good reason. The world’s most populous country is experiencing spiralling demand for western medicines as the standard of living increases and more people move from rural areas into its burgeoning cities. The economy is booming, and with a projected pharma market growth of 20 per cent , it is predicted to become the world’s second largest in terms of global market size by 2015.

This rapid growth is made possible by the sheer size of the population, tied in to the current low proportion of GDP currently spent on healthcare, and per capita spending on medicines in China is one of the worlds lowest. As disposable income rises and western ‘lifestyle’ diseases such as obesity, hypertension and lung cancer become more prevalent, the demand for medicines is clearly set to grow dramatically. The ageing population will also have an impact. A general rise in life expectancy is leading to an increase in diseases of the elderly, particularly dementia.

The country’s healthcare reforms are also having an impact. Price caps on prescription drugs are set to limit profitability and the government plans to increase access to healthcare facilities and expand the country’s system of public medical insurance. All of which will certainly increase the number of patients receiving western medicines.

The Chinese pharmaceutical market is extremely fragmented, with none of the big players – foreign or domestic – having more than about a 2.5 per cent  share of the market. Foreign multinationals are increasing their research and manufacturing to take advantage of the lower cost base, and in tandem have been expanding their marketing and sales forces with the aim of growing their products’ presence and profitability.

The Chinese Ministry of Health’s five-year plan for 2011–2015 should strengthen the country’s drug distribution industry, by giving active support to mergers, acquisitions and reorganisations. This is allied to the formulation of competitive strategies for the future.

Currently, there are more than 5000 domestic pharmaceutical companies within China. There is a particular strength in generic products and the manufacture of APIs, destined both for the home market and for export. Now the world’s largest exporter of APIs, some of the country’s larger players have market capitalisations in the multi-billions of dollars, and are expanding both organically and by acquisition to increase their market penetration.

As in the west, many big-selling blockbuster drugs are set to go off patent soon, or have done so already. This represents a significant opportunity for the Chinese API makers. APIs currently make up more than half of China’s overall pharmaceutical exports, and the Chinese market itself is set to grow at a compound rate of 18 per cent from its 2010 level through to 2017. Demand has increased for the APIs needed to make these newly generic drugs like atorvastatin (Lipitor) and clopidogrel (Plavix) for sale in western countries such as the US and Europe. The lower cost of these generics is set to increase demand significantly for these generic products in the Chinese market – and the APIs required for making them.

This growing demand for raw materials means this year’s CPhI China is set to be the most successful yet. Being held at the SNIEC in Shanghai from June 26–28, more than 27,000 visitors are expected to attend the exhibition and its five co-located pharmaceutical shows – ICSE China for contract services, BioPh China for the biopharmaceutical sector, InnoPack China for innovative packaging solutions, P-MEC China for machinery and equipment, and LABWorld China for lab and analytical equipment needs. More than 1,700 exhibitors from diverse backgrounds will be present.

For the first time this year, the show is being zoned to highlight high-growth sectors of the Chinese market, featuring zones for general ingredients, APIs, intermediates, fine chemicals natural extracts, contract services, machinery and equipment, and environmental protection and clean technology. The aim of the zoning is to make it easier for visitors to find the products and services they seek, and maximise the time they can spend networking with customers and suppliers as they are more likely to be close to each other on the show floor.

The CPhI China modular conference is also making a return on the first two days, after its success last year. This includes six individually bookable modules, on pharma manufacturing in China, commercialising R&D, export strategies and regulatory, developing biosimilars, API sourcing in China and drug delivery systems in generics re-innovation.

The flexible booking system means visitors can choose which of the modules they wish to attend. Each includes presentations from a range of experts plus real-life case studies, and a panel discussion where attendees will be able to pose their business-critical questions to industry specialists.

With the rapid growth the pharmaceutical sector is experiencing in China, and an increased focus on quality, CPhI China and its co-located events provide visitors with access to the broad range of products and services that companies will require to take advantage of the increasing demand. It also enables overseas visitors to meet with a wide range of Chinese API manufacturers who can supply the lower cost raw materials used in the manufacture of both prescription and generic drug products that will enable them to increase their margins.