The present title on “China Pharmaceutical Industry Research and Forecast to 2016” offer detailed study on drugs market in terms of OTC, Patent and Generic drugs. Also assess industry performance in terms of recent developments, driving forces, regulatory structure, economy environment and political situation.

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2. TABLE OF CONTENTS
1. Global Pharmaceutical Market
1.1. China Healthcare Sector
1.1.1. Hospitals and Hospital Beds
1.2. China Pharmaceutical Industry Snapshot
2. China Pharmaceutical Industry
2.1. Market Size
2.2. China Pharmaceutical Market Forecast
2.3. Chinese vaccine market
2.4. Chemical and Bio-pharma Market
2.5. Traditional Chinese Drugs Market
2.5.1. Herbal Supplements Market
Issues in Approval for Chinese Herbal Medicines in the US
3. Industry Classification
3.1. Patent Drugs
3.2. Generic Drugs
4. Over the Counter Drugs (OTC)
4.1. Market Size
4.2. China Vitamin Demand
Vitamin E
Vitamin C
5. Growth Drivers
6. Industry Developments
6.1. Recent Trends and opportunities
6.2. Recent Pharmaceutical Industry M&A’s
6.3. Regulatory Structure
7. Country Analysis
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3. 7.1. Key Findings
7.2. Political Environment
7.3. Macro-economic Indicators
7.3.1. GDP Recovery and Growth
7.3.2. Import/Export
7.3.3. Population and Literacy Rate
7.3.4. Literacy Rate
8. Industry Competition and Domestic Players Profiling
8.1. Competitive Landscape
8.2. Shanghai Pharmaceuticals (SPGC)
8.3. Harbin Pharmaceuticals
8.4. Pfizer China
9. Appendix
9.1. Abbreviations
9.2. Definitions
9.3. Research Methodology
Data Collection Methods
Approach
9.4. Disclaimer
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4. LIST OF FIGURES
Figure 1: Global Pharmaceutical Market by Value (2006-2011E)
Figure 2: China Healthcare Industry by Value (2006-2011)
Figure 3: China Healthcare Industry Investment Trend (2006-2011)
Figure 4: China Hospital Drugs Sales (2006-2011)
Figure 5: Average Drug Cost per Inpatient and Outpatient (2006-2010)
Figure 6: Chinese Pharmaceutical Industry Value Chain
Figure 7: China Pharmaceutical Market Segments in 2011
Figure 8: China Pharmaceutical Market by Value (2006-2011)
Figure 9: China Drugs Retail Sales by Distribution Channels in % (2006-2011)
Figure 10: China Pharmaceutical Retail Sales Forecast by Value (2011-2016)
Figure 11: Traditional Chinese Medicine Market by Value (2006-2011)
Figure 12: China Herbal Supplements Demand by value (2006-2015F)
Figure 13: Patented Drugs Market Size by Value, (2006-2011)
Figure 14: China Generic Drug Market Size by Value (2006-2011)
Figure 15: OTC Drug Retail Sales by Value (2006-2011)
Figure 16: China Vitamin Market by Value (2003-2015F)
Figure 17: Aging Population Proportion in Chinese Total Population (2006-2011)
Figure 18: China Per-Capita Disposable Income in Rural Areas (2006-2011E)
Figure 19: Private Healthcare Expenditure in China (2006-20111f)
Figure 20: Government Healthcare Expenditure in China (2006-2011F)
Figure 21: China Urban per capita Disposable Income (2003-2010)
Figure 22: China Gross Domestic Product (2003-2010)
Figure 23: China Population (2003-2010)
Figure 24: China Literacy Rate (2003-2010)
Figure 25: Competition by Type of Players in 2011
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5. LIST OF TABLES
Table 1: Leading Countries Market Share (2009-2011)
Table 2: China Healthcare Institutions (2007-2010)
Table 3: Chinese Vaccine Market by Value and Share in % (2006-2010)
Table 4: Market Share of Major Chinese and Foreign Vaccines Companies by Class I and
Class II Category in % by volume (2006-2009)
Table 5: Market Share of Major Chinese and Foreign Vaccines Companies by Class I and
Class II Category in % by Value (2006-2009)
Table 6: China Chemical Drugs and Bio pharma Therapeutic Market in 2011
Table 7: Bio-Pharma Products and Description in 2010
Table 8: Average Medical Expenditure per Inpatient and Outpatient in Public Hospitals
(2007-2010)
Table 9: China Mergers and Acquisitions in 2010
Table 10 : Country Overview
Table 11: China Economy (2010-2012)
Table 12: Import & Export Statistics (Jan to May 2011)
Table 13: Vitamin Import Data in China in January 2010
Table 14: Chinese Herbal Medicines Imports and Exports (2008-2010)
Table 15: Market Share of Leading Multinational Pharmaceutical Companies in China in
2011
Table 16: Shanghai Pharmaceuticals Revenue (2008-2010)
Table 17: Shanghai Pharmaceuticals Key Strategies
Table 18: Harbin Pharmaceuticals Revenue Statement (2007-2010)
Table 19: Harbin Pharmaceutical Key Strategies
Table 20: Pfizer China Key Strategies
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6. 1. GLOBAL PHARMACEUTICAL MARKET
Trends towards healthy lifestyles and rising healthcare awareness have become a global
phenomenon. The pharmaceutical industry is one of the leading industries worldwide as a
result of increased efforts to reduce mortality and
China pharmaceutical industry
morbidity, the technological advancements in medical
was ranked on 5th place in 2011
and is soon expected to outpace facilities & treatment, and the aging segment of the
Germany and Japan society. In the first quarter of 2010, advertising
expenditures on pharmaceutical products grew 3.60%
as compared to the same period last year, generating USD 1.79 billion revenues. In 2011, the
US continued to dominate the worldwide pharmaceutical market with around ~% market
share along with strong growth registered by Latin American and Asian pharmaceutical
markets. The pharmaceutical market in Europe declined for third consecutive year in 2011
mainly because of Euro’s weaker exchange rate against the USD. The Chinese
pharmaceutical industry is soon expected to outpace Germany and Japan.
Figure: Global Pharmaceutical Market by Value (2006-2011E)
1,000
900
800
700
USD Billion
600
500
400
300
200
100
0
2006 2007 2008 2009 2010 2011E
Table: Leading Countries Market Share (2009-2011)
Countries 2009 2010 2011
The US
Japan
Germany
China
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7. CHINA HEALTHCARE SECTOR
Chinese healthcare industry encompasses pharmaceuticals, healthcare institutions (hospitals,
nursing homes, clinics, and diagnostic centers), medical devices and health insurance
companies. Both public and private sectors are contributing in the industry growth with
private sector providing huge investments in building
Government’s viable regulations the infrastructure while public sector offering low
for foreign investment in Chinese
pharmaceutical industry are
cost healthcare services. The total healthcare industry
supporting the industry growth in the country has reached USD ~ billion in 2011 at a
growth rate of 16.67% from previous year and is
expected to grow by 22.00% by 2016 led by medical equipment demand and rising demand
of pharmaceutical industry.
Figure: China Healthcare Industry by Value (2006-2011)
350.00
300.00
250.00
USD Billion
200.00
150.00
100.00
50.00
0.00
2006 2007 2008 2009 2010 2011
Figure: China Healthcare Industry Investment Trend (2006-2011)
4,500.00
4,000.00
3,500.00
3,000.00
USD Million
2,500.00
2,000.00
1,500.00
1,000.00
500.00
0.00
2006 2007 2008 2009 2010 2011
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8. In 2010 & 2011 hospital drugs sales grew by 21.25%
In 2010 & 2011, hospital drugs and 20.27% respectively. The fall in the revenue growth
sales grew by 21.25% and
rate was largely due to the government’s price control
20.27%
policy. The necessity of the treatment is helping drug
manufacturers to cover their losses from the new pricing reform. In coming years, price index
will fall further but in terms of volume, sales are expected to register positive growth.
Figure: China Hospital Drugs Sales (2006-2011)
40.00
35.00
30.00
25.00
USD Billion
20.00
15.00
10.00
5.00
0.00
2006 2007 2008 2009 2010 2011
Figure: Average Drug Cost per Inpatient and Outpatient (2006-2010)
100.00
90.00
80.00
70.00
60.00
RMB
50.00 Inpatient
Outpatient
40.00
30.00
20.00
10.00
0.00
2006 2007 2008 2009 2010
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9. HOSPITALS AND HOSPITAL BEDS
With rising number diseases, number of healthcare facilities has also showed signs of
improvement to balance demand and supply but the limiting factor is the number of trained
medical practitioners which have become an area of concern. Now government’s next agenda
is to encourage students to opt for medical services.
Table: China Healthcare Institutions (2007-2010)
2007 2008 2009 2010
Hospital
Grass-roots Healthcare Institution
Specialized Public Health Institution
Other Institution
Total
CHINA PHARMACEUTICAL INDUSTRY
MARKET SIZE
Chinese pharmaceutical industry is showing a consistent growth and now moving forward to
outpace other leading markets. Rising per capita disposable income, government measures to
support healthcare (introduction of cost effective
Prescription drugs dominate the
policies) and a large number of rural population
pharmaceutical market in the
country in terms of both
moving to urban areas are the major factors driving the
production and retail sales industry growth. The Chinese pharmaceutical market
is dominated by prescription drugs in terms of both
production and retail sales which contributed 38% to the total pharmaceutical retail sales in
2011. Cold and flu medicines accounted for the largest demand in the OTC segment while
diabetes, hypertension and heart diseases drugs were driving the demand in the prescription
drugs segment.
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10. Figure: China Pharmaceutical Market Segments in Percentage, 2011
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
OTC Drugs Prescription Drugs TCM Others
Note: Others includes a portion of medical devices and illegal drugs which are either banned or imported from other
countries
Figure: China Pharmaceutical Market by Value (2006-2011)
70.00
60.00
50.00
USD Billion
40.00
30.00
20.00
10.00
0.00
2006 2007 2008 2009 2010 2011
Introduction of EDI (essential drug list) has left an inverse impact over small drug
distributors; MoH is signing contracts with distributors who can spread their reach nationally
to standardize the drug distribution system.
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11. Figure: China Drugs Retail Sales by Distribution Channels in % (2006-2011)
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2006 2007 2008 2009 2010 2011
Medical Institutions/Hospitals & Clinics Retail Drug Stores
CHINA PHARMACEUTICAL MARKET FORECAST
Modern Chinese medicine demand is rising and it is expected that in coming years MCM will
grow at 17% growth rate led by the rise in exports. A large demand for Chinese herbal
supplements is also expected from European countries with the help of improved technology
and rising interest of international pharmaceutical companies. Chemical drugs are expected to
grow at 16% growth rate by 2014. OTC drugs demand in chain drug stores is rising compared
to pharmacies because of the display and higher self life. From 2011-2016, the Chinese
pharmaceutical industry is expected to grow at CAGR 14.36% generating revenues of USD ~
billion.
Figure: China Pharmaceutical Retail Sales Forecast by Value (2011-2016)
160.00
140.00
120.00
USD Billion
100.00
80.00
60.00
40.00
20.00
0.00
2011 2012F 2013F 2014F 2015F 2016F
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12. CHINESE VACCINE MARKET
Vaccine market is witnessing a rapid growth in the country wherein a major portion of sales
in volume terms comes from Class I vaccine 1 but in terms of value its contribution is low.
With the help of state immunization program, demand for Class I vaccine increased by 94.9%
in 2010 to USD 920 million.
Table: Chinese Vaccine Market by Value and Share in % (2006-2010)
Share (%) Sales Value
Share (%) by
Year Class by Value Volume (USD Million)
Class I
Class II
2006 Total
Class I
Class II
2007 Total
Class I
Class II
2008 Total
Class I
Class II
2009 Total
Class I
Class II
2010 Total
CHEMICAL AND BIO-PHARMA MARKET
Chemical drugs hold the largest share in the Chinese pharmaceutical market and showed a
relatively strong growth in 2011. Among Chemical and Bio-pharma therapeutic products
anti-infective, Antineoplastic and Cardiovascular accounted for the largest demand.
1 Class I vaccines (vaccines purchased by the government for the state immunization programs) and class II vaccines (self-
paid vaccines)
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13. Table: China Chemical Drugs and Bio pharma Therapeutic Market in 2011
Therapeutics Market Size USD million
Anti-Invectives for Systemic Use
Antineoplastic and Immuno-Modulating Agents
Cardiovascular System
Nervous System
Respiratory System
Bio-pharma products are slowly gaining importance in the pharmaceutical industry with
sector growth driven by recent acquisitions. Retail sales in this segment recorded 27.00% and
28.40% growth in 2010 and 2011 respectively.
Table: Bio-Pharma Products and Description in 2010
National List
Patent Prescription NMID of Essential
Product Name Usage Expiry Drug OTC Drugs Drugs
Ulinastatin for
Injection
Peifelkang (Live
Combined
Bifidobacterium,
Lactobacillus and
Enterococcus
Capsules, Oral))
Urinary
Kallidinogenase for
injection
Chymotrypsin for
Injection
Note: NMID stands for National Medical Insurance Drugs
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14. TRADITIONAL CHINESE DRUGS MARKET
A large proportion of rural population in China prefers traditional medicines with most of the
general hospitals operating a separate TCM department. Outside China, TCM is becoming
popular with rising exports in both value and volume terms. In
In 2011, Traditional recent years, Modern Chinese medicines (MCM) have replaced
Chinese Market drug sales
traditional medicines with continuous research and
registered 2.11% growth
to USD ~ billion developments and advancements in proteomics, genomics,
molecular biology and stem cell research. This segment of the
In 2011, TCM sales grew by 2.11% to USD ~ billion as compared to 3.74% growth
registered in 2010 with market worth of USD ~ billion..
Figure: Traditional Chinese Medicine Market by Value (2006-2011)
30.00
25.00
USD Billion
20.00
15.00
10.00
5.00
0.00
2006 2007 2008 2009 2010 2011E
HERBAL SUPPLEMENTS MARKET
China is specialized in the field of herbal medicine, thus finding a greater demand for their
traditional herbal products. From 2005-2010, the Chinese herbal medicine market grew at a
CAGR of 4.38%, to USD ~ billion in 2010. The market is expected to grow by 7.69% CAGR
from 2010 to 2015F.
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15. Figure: China Herbal Supplements Demand by Value (2006-2015F)
7.00
6.00
USD Billion
5.00
4.00
3.00
2.00
1.00
0.00
2006 2007 2008 2009 2010 2011E 2012F 2013F 2014F 2015F
PATENT DRUGS
In China, patented drugs market is small but registered a continuous growth even during
economy slowdown. A stable growth is the result of
Patented drugs sales grew at literate segment of the population and migrates who
CAGR 28.19% from 2006 to USD
believe in paying high on drugs for better cure. Per
~ million in 2011
capita income is also rising which support spending
power wherein healthcare is on top priority.
Figure: Patented Drugs Market Size by Value, (2006-2011)
6,000.00
5,000.00
4,000.00
USD Million
3,000.00
2,000.00
1,000.00
0.00
2006 2007 2008 2009 2010 2011
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16. GENERIC DRUGS
Generic drugs market is witnessing a rapid growth wherein small domestic players hold a
dominant position. With the expiry of patent of branded drugs, domestic companies try to
first launch the drug. There are almost ~
Generic segment enjoy dominant pharmaceutical companies working in the country
position in the market driven by
including domestic as well as foreign players. By the
rising interest of foreign
investors as well as number of
end of 2011, generic drugs market reached USD ~
M&A activities billion by growing at a CAGR ~% from 2006-2011.
Figure: China Generic Drug Market Size by Value (2006-2011)
60.00
50.00
40.00
USD Billion
30.00
20.00
10.00
0.00
2006 2007 2008 2009 2010 2011
OVER THE COUNTER DRUGS (OTC)
In value terms, OTC drug market reached USD ~ billion 2 and demand was high in retail
stores compared to the hospitals. In terms of disease type, cold & flu medicines accounted for
the largest sales by volume. Also vitamins, minerals and gastrointestinal medication
supported OTC demand. The historical figures suggested a stable growth in OTC market and
according to the present sales, growth rate is improving year on year. In Chain, drug stores
are rapidly expanding due to the availability of all types of drugs (herbal, chemical) at one
place.
2
This figure include herbal medicines including traditional Chinese medicines
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17. Figure: OTC Drug Retail Sales by Value (2006-2011)
18.00
16.00
14.00
12.00
USD Billion
10.00
8.00
6.00
4.00
2.00
0.00
2006 2007 2008 2009 2010 2011
Source: AM Mindpower Solutions
CHINA VITAMIN DEMAND
In the past decade, demand for vitamins in China have grown at a fast pace. In terms of
production volume, country has experienced rise in demand in 2010 as compared to previous
years, with large demand coming for vitamin C
In term of value, vitamin
supplements. In term of value, vitamin market grew by
market grew by 9.48% in 2010
to USD ~ million 9.48% in 2010 to USD ~ million as compared to 2009
results. China vitamin demand is expected to surpass
USD ~ million by 2015, driven by rising population and economic growth of the country.
Further, a large educated and urban population accompanied with rising personal disposable
income will support the demand for vitamins to increase immunity and fight chronic diseases.
Figure 1: China Vitamin Market by Value (2003-2015F)
1,400
1,200
1,000
USD Million
800
600
400
200
0
2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012F 2013F 2014F 2015F
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