China Healthcare Industry China Healthcare Consulting Presentation Outline Market Background...

China Healthcare Consulting

China Healthcare Industry

Presentation OutlineMarket BackgroundRegulatory EnvironmentIndustry IssuesIntellectual Property RightsGrowth SectorsConclusions



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Detailed Slides and Presentation can be available upon request



China- the fastest growing market in the world

China GDP and Growth Rate

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China- Import vs Export

China Export, Import, Ex Rate, Balance

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Strong Hard Currency Reserve

China US$ Reserve

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Increasing U.S. Direct Investment into China

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China Pharmaceutical Industry Output & Growth Rate ---A Large and Growing Market

China Pharmceutical Industry Output & Growth Rate

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China Pharmaceutical Commercial Sales & Growth Rate (Billion Yuan)

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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Year

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Rank of Drug sales in 14 major area 2001 China

2001 2000 Company1 1 Shanghai Roche

2 3 Shanghai BMS

3 2 Dalian Pfizer

4 7 Merck Sharp & Dohme

5 6 Glaxo

6 8 Beijing Double-Crane pharm.

7 10 Sino-Swed Pharm Corp

8 4 North China Group

9 5 Sandoz

10 12 Harbin Pharm. Group

11 16 Novartis

12 9 J&J

13 11 Astra-Zeneca

14 17 Bayer

15 34 Shandon Lu Nan Pharm.



Problems in Healthcare System Lack of Stable Budget ResourcesGreat Variability in Ability to Pay by EmployersCasual Attitudes toward Medical ExpenditureIncompatible with New Ownership StructureDeferred Payment Causes Resentment and Social Problems



SDAMerger of 3 Former Governmental DepartmentsCompositionDepartment of Drug Registration

• Synthetic, Biological and TCM Divisions

Department of Medical Devices• Standards, Product Registration and

Supervision DivisionsDepartment of Safety SupervisionDepartment of Market Compliance



IPR Counterfeiting of TrademarksLax Enforcement of Law and Protection of Local IndustryWTO Accession Exempts China From Giving Immediate Patent ProtectionAdministrative Protection (AP) is Rumoured to be Phased Out in Favour of 20-Year PatentPre-AP Local Generics Considered LegalRequirement of Large Generic Prints on Labels



WTO Challenges (1)

Regulatory EnvironmentMore in Line With International

StandardsMore Transparent Administration ICH Guideline Increasingly More

RelevantAdministrative Barriers to Offset WTO

Requirements



Biological ProductsTypes Biochemical, Biological and Genetically

Engineered Products

Science and Technology DrivenAverage Growth Rate 12.5% Worldwide Compared with 8% for PharmaceuticalsUS$ 20 Billion in 2000 with 100+ Products



OTC Market in China

• 700 OTC, 70 % will be registered as OTC• Urbanization. Large migration from rural• Sales by chain pharmacies in coastal cities increased by 45% in

2001. • Foreign companies allowed to run OTC distribution



TCM: Traditional Chinese Medicine

TCM Source Materials Number Over 12,000TCM Industry Produces 5,000+ TCM Preparations in Large-Scale ProductionTCM Sector Outperforms Average Medical Industry’s Performance IndicatorsRide on the Back of Strong Worldwide Demand for Natural Medicines



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