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On fast-track growth orbit
Anil Mathew | Thursday, June 18, 2009, 08:00 Hrs  [IST]

The thriving pharmaceutical market in China is turning to be an irresistible destination for global pharma players, as it is predicted to see a revenue growth between 20 to 25 per cent and a profit growth of 30 per cent in 2009. It seems the economic turmoil hasn't gathered enough force to hamper the strides that the Chinese pharma industry has been making over the past years.

With the booming Chinese drug market, including all western and traditional domestic medicine drug products and biopharmaceuticals, at retail price level growing at an average annual rate of 15.3 per cent between 2001 and 2008 to US $70.7 billion, it has almost become strategically crucial for global pharma players to enter this market and succeed.

The foreign pharma players will have a lot of business opportunities in this dragon land in this year, as the drug sales in the country is learnt to expand by at least US $12 billion in 2009, as coverage of the Chinese population by urban employee resident basic medical insurance systems and the new rural cooperative medical system expands.

"Restored order in the marketplace after regulatory corrections, anticipated market expansion brought by the healthcare reform under which government investments will increase considerably, continued industry consolidation resulting in higher market shares and profitability of larger companies, relatively steady drug prices, rise of new product launches by multinational pharma houses, and continuous inflow of foreign and domestic investments to the drug industry would all fuel the growth of Chinese pharma industry in 2009 and thereafter," said an industry expert, who is familiar with the developments in Chinese pharmaceuticals front, on condition of anonymity.

"To take full advantage of what China offers, foreign pharma players are advised not to rank China's importance by its current share in total revenues, but to elevate it to a position at least comparable to that of Japan. China is at the early stage of becoming ripe for multinational players. But the harvest time is near," he added.

The Chinese pharmaceutical market is the third largest in Asia Pacific, ahead of India and behind Japan. The region saw combined sales of prescription products and over-the-counter (OTC) medicines reaching US $36.99 billion in 2008. As per the information available, in China drug spending accounts for 0.97 per cent of gross domestic product and annual per capita expenditure is US $27.50.

According to a recent BMI forecast, overall Chinese pharmaceutical market is expected to grow at a compound annual growth rate of 14.92 per cent through 2013.

"The Chinese pharmaceutical market is not only a large, but also a rising opportunity in itself - reaching an estimated $37 billion in 2008 and still growing at near 20 per cent annually. In the near future, it will also join the world's biggest pharmaceutical markets. Hence it is a crucial market for global pharma. However, the Chinese drug market has unique characteristics which must be understood to make the China potential a reality," apprised the industry expert who requested secrecy.

"A host of factors, including continued robust market growth, successful business restructure in China, active merger and acquisitions, sufficient senior management attention at the headquarters and adequate resource allocations, will together foster and facilitate the Chinese pharma market's rise as a key revenue source for foreign players in the near future," he added.

Apart from the growth of growth opportunities it offers to foreign players, the Chinese pharma industry has also witnessed major changes of late. What deserves a mention is local drug makers' new found love of intellectual property.

"It appears that intellectual property is being embraced by local drug makers. It was revealed in April 2009 that the number of submissions and approvals for patent application from domestic players in China's pharmaceutical industry were increasing at a faster rate than those from foreign parties," pointed out the industry expert.

CPhI CHINA 2009
At a time, when the Chinese pharma industry is fast becoming a favourite destination for global pharma players, UBM International Media, a leading organiser of pharmaceutical and food ingredient trade shows, in its efforts to gather global pharma and its allied players to this booming market to explore emerging business opportunities, would hold CPhI China 2009 at Shanghai New International Expo Centre (SNIEC), China from June 23 to 25.

"With a 5 per cent growth in attendance, CPhI China is proving to be the dominant force as East Asia's largest annual pharmaceutical networking event. The diverse range of visitors and exhibitors highlight how much the global pharmaceutical community value China's capabilities. The event would address individuals from manufacturing and purchasing of fine chemicals and pharmaceuticals to solution providers' need for latest innovations and networking opportunities," said the organisers of the event.

"CPhI China is attracting more and more visitors each year. They include specialists from general management, marketing and sales, purchasing, production, quality control, engineering and research and development. On average, nearly 70 per cent of all visitors have real purchasing power," they added referring to the popularity the event is gaining.

As in the previous editions of the show, this year too events like International Contract Services Expo (ICSE) and Pharmaceutical Machinery and Equipment Convention (P-MEC) would be held concurrently with CPhI China 2009.

Dedicated to contract services within the pharmaceutical manufacturing process, ICSE is expected to provide visitors an opportunity to network with highly qualified outsourcing specialists from around the world, while P-MEC is learnt to help the participants explore theChinese market for processing and packaging.

"Showcasing cutting-edge pharmaceutical machinery and equipment and advancements in chemical analysis, testing instruments, filtration systems, extraction lines, automated packaging and drug-filling equipment, P-MEC China continues to go from strength to strength," according to the CPhI China organisers.

This year, CPhI China would also feature CPhI China 2009 International Forum in its bid to focus on current issues that affect the worldwide pharmaceutical market.

"Organised jointly by UBMi, UBMSinoexpo and eChinaChem, CPhI China 2009 International Forum will introduce a series of activities that cater to supply-demand communication between Chinese and foreign companies, market trends and technology hot topics. This is the perfect platform and time to exchange professional knowledge," noted the event organisers.

Though there are enough ingredients to make the event a huge success, the main attraction of CPhI China 2009 would be dedicated pavilions like China, India, Italy, Japan Bulk Pharmaceutical Manufacturers Association, Korea, Technology Licensing Organisation and UK.

"Both diverse and exciting, the Chinese pharmaceutical industry continues to expand providing the perfect environment for CPhI China 2009. All the more, the event would open new doors of opportunities to forge exciting partnerships to enhance your business. Also, this event will provide unrivalled access to the pharmaceutical industry and a platform to launch new products and increase your market knowledge," said the organisers of CPhI China.

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