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Political and Policy Analysis for the Chinese Healthcare Industry 2010
Frost & Sullivan, March 2009, Pages: 46
The Chinese healthcare industry has been experiencing robust growth, driven by government’s initiative to open up the economy and reform the healthcare system. Providing universal healthcare coverage, improving rural healthcare infrastructure and improving healthcare services is of high priority for the government. To make healthcare accessible for all, government is drafting policies to control the prices of medical products and services. The Country Industry Forecast gives an in-depth analysis of China's recent changes in the policies, its implications and opportunities that it has created for the Healthcare Industry.
With a double digit growth rate since 2000, China has one of the fastest growing healthcare industries in the world, mainly because of the government’s continuous efforts to simplify the regulatory procedures, enhance trade relations, and attract foreign entities. Over the last decade, the Chinese economy has been opening up to foreign investors through investor-friendly policies, which has benefited the country and its healthcare system. Further, China's ascension to the World Trade Organization (WTO) in 2001 led to the standardization of regulations and import tariff reduction. This, in turn, aided the country’s trade balance, development of regulatory system, establishment of the State Drug Administration (SDA) {similar to the United States’ Food and Drug Administration (FDA)}, and initiatives to strengthen Intellectual Property (IP).
The Chinese healthcare industry functions through the joint efforts of the public and private sectors. While the majority of the funding comes from the private sector, the public health institutions provide infrastructure and services. Healthcare in China is divided into urban and rural health insurance system. The urban employees can obtain basic healthcare services using the New Basic Insurance System (BIS), whereby both the employee and employer contribute to the premium. Similarly, people living in the rural regions can also gain access to healthcare services through the New Co-Operative Medical System (NCMS), which was co-founded by both the rural population and the government. The Government is also actively working on offering insurance cover to non-workers such as students and the self employed. The government is also aiming to reduce the disparity in the allocation of health resources between rural and urban areas. It will continue to invest in public health, rural health, basic medical insurance, healthcare infrastructure, disease prevention programs, and programs for the elderly. Further, it announced a fiscal stimulus package in response to the recent economic downturn and allocated $5.00 billion to medical care and education. It unveiled a new medical reform plan and set apart $124.00 billion to continue providing universal healthcare and basic health services to all, as well as improve rural healthcare infrastructure.
China’s extensive efforts to improve its regulatory environment concerning registration, import, and sales of medical devices have begun to bear fruit, with an increasing number of pharmaceutical and biotechnology companies complying with international standards such as good manufacturing practice (GMP) and good clinical practice (GCP). This astuteness in production has enhanced the country’s image as favored clinical trial destination. With each new initiative, the country is shortening and streamlining its production process. The health reform movement has also stimulated demand for medical devices, as medical institutions are eager to replace their old equipment with new ones. To improve the delivery of health services, China is laying emphasis on the proper implementation of health information system (HIS). This initiative gained momentum mainly after the outbreak of severe acute respiratory syndrome (SARS) in 2003. In 2002, China laid down guidelines for the Development of National Health Informatization Planning from 2003 to 2010. However, the health service statistics and health system statistics collection methods are still not adequate, providing opportunities for healthcare industry participants.
Meanwhile, the country’s pharmaceuticals market has been expanding rapidly since 1978. Generic drugs have traditionally dominated the Chinese market, mainly due to insufficient financial and technical resources among the domestic companies. Generic drugs still holds tremendous growth prospects in the country. To reduce healthcare costs, the government encourages the use of generic drugs and over the counter (OTC) drugs for non-critical diseases. Additionally, the Chinese Government is supportive of the Traditional Chinese Medicine (TCM) sub segment, and TCM modernization is one of the key areas of development for China's Ministry of Science and Technology.
Frost & Sullivan’s Healthcare Country Industry Forecast service provides vital inputs for evaluating the attractiveness of a country and its healthcare industry. Besides enabling decision makers to assess the impact of non-market forces, it also helps in identifying new market opportunities. This service provides a strong base for preparing contingency plans. In addition, investors can assess industry-specific risk factors as well as conduct a more in-depth micro research.
Benefits
Expert Frost & Sullivan analysts thoroughly examine the following benefits in this research:
Identifying New Market Opportunities
The future trends and developments in the Chinese healthcare industry have been identified by taking into account the political and policy environment of the country as well as analyzing global market trends. This analysis will provide valuable information to industry participants, which will aid in seizing the strategic market opportunities.
Understand Future Industry Trends
The study gives an insight into the Chinese healthcare market, policies, and their implications. This will help industry participants to gauge the trends in their respective markets and thereby, enable them to devise appropriate strategies to improve their market shares.
Comprehend Policy and Regulatory Environment
A detailed analysis of the policy and regulatory framework of the Chinese healthcare industry provides insights into the regulatory environment, as it exists, and the future direction of the same.
Evaluate Industry Segment Potential
An analysis of the segments of the Chinese healthcare industry along with a discussion of its vertical market segments provides details of the trends and forecasts for the segments of the healthcare industry as well as an insight into the key indicators and resources. This will help corporate planners in developing accurate business plans and planning company resources.
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