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Pharmaceutical Market and Health Care Reform in China 2008 Product Image

Pharmaceutical Market and Health Care Reform in China 2008

  • Published: October 2008
  • Region: China
  • 145 Pages
  • Seed Planning

With total pharmaceutical production reaching RMB 648.9bn. in 2007, the Chinese pharmaceutical market has continued to maintain a two-digit growth dynamics. On the other hand, there remain a number of issues to be addressed before meeting the world standards. Over the past several years, the Chinese government has intensified its efforts to resolve the issues associated with intellectual property, drug quality, and briberies. One of the biggest ongoing issues is the national healthcare reform intended for universal health insurance coverage. The Chinese government initiated a preliminary implementation of basic health insurance for urban residents in July 2007, adopting a wide range of new policies including "Separation of dispensing and prescribing functions", "Implementation of Government-defined unified prices of essential drugs", "Improvement of drug approval process as well as drug distribution system", and "Intensification of environmental protection measures", etc.

I. Summary of Findings

1. Size of Pharmaceuticals Related Market in China
2. Characteristics of each market sector
3. Highlights of 2007 pharmaceutical market in China
4. Improvement and standardization of market order
5. Major regulatory rules issued in 2007
6. Chinese government's approach to achieving universal health insurance coverage

II. Trends of Chinese pharmaceuticals Related Market, 2007

1. Value of pharmaceutical production industry
(1) A significant increase in the total value of pharmaceutical production industry
(2) Growth rates of total production value of major pharmaceutical sectors, 2006-2007
(3) Sales efficiency (ratio of sales vs. production)
(4) Production value by region

2.Total revenues of pharmaceutical sectors
(1) Total revenues of pharmaceutical sectors sustaining stable growth
(2) Sales by region

3.Recovery of accounts receivable

(1) Total profits marking a significant increase
(2) Top 10 provinces and government-ruled municipalities in terms of profits in 2007
(3) Factors affecting the growth of profits in the pharmaceutical sector
(4) Summary of profit growth

(1) Net sales, total sales and purchases
(2) Significant correction taking place in purchases of prescription drugs by hospitals
a) Change in the market size of prescription drugs purchased by hospitals
b) The ratio of pharmaceuticals imported or sold by international joint ventures growing in the prescription drug market
c) Sales of prescription drugs by therapeutic area
d) Pharmaceutical purchases by hospitals and imports of pharmaceuticals
e) Implementation of the new law on prescription management in May 2007
(3) Market size by product category
a) Change in market size of antiulcer drugs
b) Change in market size of hematological drugs
c) Change in market size of dermatological drugs
d) Change in market size of antidiabetic drugs
e) Change in market size of cardiovascular drugs

6. Retail Market
(1) Positioning of the pharmaceutical retail market showing steady improvement
(2) Pharmaceutical sales to the retail sector showing moderate growth
(3) Pharmacies and drugstores in China - Performance of drugstore chains on the rise -

7. Sales posted by the third category of retail offices*1 exhibiting a sharp rise

8. Imports and exports

III. Factors impacting China's Pharmaceutical Sectors in 2008

1. Summary

2. Macroeconomic factors
(1) World economic uncertainty prevailing
(2) Slowdown in growth of the world pharmaceutical market
(3) China having improved its position in the world pharmaceutical market
(4) Booming China's macroeconomy
(5) Signs of inflationary pressures gradually showing up
(6) Trend of the Chinese economy in 2008
(7) Intensification of macroeconomic adjustment policies

3. Completion of the first step of the government policy for the improvement and standardization of market order
(1) Key focus points of the action plan
(2) Full-scale implementation of the action plan
(3) SFDA issues the revised Provisions for Drug Registration in July 2007
(4) Key contents added to the old Provisions for Drug Registration
(5) Supplementary Provisions for TCM Registration
(6) Assessment Standards for Pharmaceutical GMP Certification (trial)
(7) Increasing size of sales and pharmaceutical market centralization
a) Increase in size of sales posted by top 100 pharmaceutical companies
b) Pharmaceutical wholesalers representing a prominent increase in size of sales, with a polarlization trend becoming prominent
(8) Summary of full-scale promotion of the Government's action plan

4. Healthcare Reform Proposal
(1) The government being opted to increase funding for the scheme with China's Healthcare reform framework established
(2) Market size expanded by healthcare reform
(3) Basic medical insurance for urban residents
(4) Establishment of new medical insurance for rural residents
(5) Establishment of Community-based health care system
(6) Impact of new medical insurance for rural residents and the establishment of the regional health care system
(7) How will the new medical insurance for rural residents contribute to the 82 increase of the market size?
(8) How will the establishment of regional health care system contribute to the increase of the market size?
(9) How would the market size increase if migrant workers should be covered by medical insurance for migrant workers in urban areas?
(10) How would the market size increase if urban and rural residents are Comprehensively covered by medical insurance?

5. Separation of dispensing and prescribing function
(1) Outline
(2) Significance and impact of the separation of dispensing and prescribing functions

6. Establishment of the basic drug system
(1) Outline
(2) Detailed regulations for the use of basic drugs for urban and rural residents
(3) The first basic drug production by specified pharmaceutical companies
(4) Summary of China's new Healthcare Reform Plan

7. Pricing policy
(1) Pricing policy looking ahead to the years following drug price markdowns
(2) Measures implemented by the National Development and Reform Commission (NDRC) and their impact
(3) The NDRC making the first revision of the list of drug retail prices
(4) All prescription drugs will be priced at the initiative of the government in the future
(5) Clarify the right of central and regional lead offices in fixing drug prices
(6) Restraint of price additions at the distribution stage
(7) New drug development promotion through drug pricing policies
(8) New drugs and generics potentially priced under the different principles
(9) Impact of the drug pricing policy

8. Tendering-based pharmaceutical purchases
(1) Background of the tendering system
(2) Guangdong model: Online bidding
(3) "Dual-billing system" introduced in the Guangdong model
(4) Henan model: Minimum expected bid price
(5) Fujian model: Two places for purchasing drugs coexisting
(6) Ningxia model: Direct delivery of pharmaceutical products
(7) Summary of pharmaceutical purchases through competitive bid

9. Environmental protection
(1) API production plant forced to close due to the environmental protection requirements
(2) Revised standards for industrial pollution control to be put into effect in 2008

10. Reduction of the Export Tax Refund Rates (EVRRs) for APIs

11. Increase in API prices

12. Industry structural changes associated with the merger boom in China's pharmaceutical industry
(1) Industrial restructuring through mergers
(2) Case examples of typical joint ventures formed by multinational companies
(3) Intracorporate reorganization
(4) Reorganization of companies under the direct control of central government

IV. 2008 Forecast of Pharmaceuticals-related Market

1. Quantitative analysis
(1) Model setting
(2) Time-series data associated with the development of China's pharmaceutical market
(3) 2008 forecast of the pharmaceuticals-related market

2. Qualitative analysis
(1) Major characteristics of the pharmaceutical market in 2008

V. Pharmaceutical Companies

1. Top 100 pharmaceutical companies in China
(1) Size of the market for China's top 100 pharmaceutical companies in terms of sales
(2) List of top 100 pharmaceutical companies in terms of sales in 2007
(3) Outline of 20 leading companies

2. Sino-foreign joint venture companies
(1) Multinational joint venture companies
(2) Market share of foreign-invested joint venture companies
(3) Outline of top 10 foreign-invested JV companies

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