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LONDON, Feb. 4, 2014 /PRNewswire/ -- Reportbuyer.com just published a new market research report:
China's 2013 Life Sciences Industry Outlook and Regulatory Review
Government Investments Could Make China the Third-largest Pharmaceutical Market in the World
China is predicted to become the third-largest pharmaceutical market in the world by the end of 2013 due to the government's considerable investment in the healthcare industry and the population's unmet healthcare needs. The life sciences industry is broad and involves a wide range of disciplines. This research service focuses on the trends and market opportunities in China's life sciences industry-the regulatory environment, the registration pathway of various drugs and IVD products, and M&A. Medical devices and the related registration pathway are not included. In this study, the base year is 2012, and the forecast period runs 2013–2017. An analysis of market challenges, drivers, and restraints impacting industry growth are provided.
• China is predicted to become the third largest pharmaceutical market in the world by the end of 2013 due to the government's considerable investment in the healthcare industry and the population's unmet healthcare needs.
• The aging population and the development of what are know as Western diseases, such as type 2 diabetes, cardiovascular diseases, breast cancer, allergies, and mental health problems are positioned to drive medical needs. The new drugs expected to hit the Chinese market will address these needs.
• The State Food and Drug Administration (SFDA) is adopting more stringent requirements for the registration of drugs and in vitro diagnostics (IVD), leading to increasing efforts by companies to focus on manufacturing high-quality products. To narrow the drug quality gap and align with international standards, the SFDA will strengthen its supervision of the safety and quality of healthcare products.
• In 2012, the SFDA approved 615 drugs, of which X were chemical generic drugs and X were new chemical drugs. The Chinese pharmaceutical market yielded $X billion and is expected to grow at a CAGR of X% from 2012 to 2017.
• With the ongoing reform of public hospitals and the ensuring drug pricing mechanism, IVD testing revenue is likely to account for an increasing proportion of a hospital's income. In 2012, the Chinese IVD market generated $Xmillion and is forecast to expand at a CAGR of X% from 2012 to 2017.
• Integration, optimization of distribution channels, and cost reduction are major factors encouraging domestic participants and multinational corporations (MNCs) to engage in merger and acquisitions (M&A) activities. Domestic M&A surge as Chinese pharmaceutical companies lead a new wave of consolidation.
Pricing Cuts and MNCs' Future Operations in China
• At present, the major challenges for MNC pharmaceutical companies are price control and cost-cutting. Conducting M&A by way of vertical integration and horizontal consolidation are considered smart approaches for MNCs to reduce costs, optimize the value chain, and re-allocate resources.
• Further, MNCs endeavor to eliminate unnecessary spending from manufacturing to marketing. Selecting manufacturing sites is becoming more deliberate and the aggressive capacity for expansion is no longer considered desirable.
• Marketing activities now target patients' specific needs, part of a nationwide effort to maintain previous profit levels.
• The bribery scandal of GlaxoSmithKline China triggered national investigations into the business operations of MNC pharmaceutical companies. The investigations mark a change in the MNCs' positions within the Chinese market.
• In the tightened regulatory environment, MNC pharmaceutical companies that once received favored treatment now face growing pricing pressures and stringent governmental supervision.
• The excessive returns traditionally enjoyed by MNCs from patented drugs are now being curbed, leading to lower profit margins. Competition in various sectors has intensified, pushing MNCs to develop new products and focus on hot-spot diseases.
oRedundant layers of distribution and uncompetitive market participants will be phased out during this process.
Methodology and Scope
• The life sciences industry is broad and involves a wide range of disciplines. This research service focuses on the trends and market opportunities in China's life sciences industry-the regulatory environment, the registration pathway of various drugs and IVD products, and M&A. Medical devices and the related registration pathway are not included.
• In this study, the base year is 2012, and the forecast period is from 2013 to 2017. A detailed analysis of market challenges, drivers, and restraints impacting industry growth are provided.
• This research was derived from published sources including the following: public health organization Web sites; company publications including annual reports, initial public offering (IPO) filings, and press releases; government public sources; and published articles in scientific journals.
Unmet Needs and New Market Opportunities
New Vaccine Development
New vaccine development remains the most important unmet need in the life sciences industry. The growth rate of the Chinese vaccine market is expected to increase remarkably over the next few years. The government implemented the Biological Industry 12th five-year development plan and invested $Xbillion (USD) to endorse this market. In addition, compared to type I, type II vaccines -including influenza, pneumococcus, and rotavirus-enjoy a higher profit margin.
Monoclonal Antibody Agents
Monoclonal antibody agents have great potential in the life sciences industry. The superiority and focus of monoclonal antibody agents mainly appear in 3 areas: cancer therapy, organ transplant, and autoimmune diseases. The CAGR of monoclonal antibody agents was much higher than that of biotech drugs from 2006 to 2012.
Used for both the prevention of and therapeutic effects on various diseases, genetic engineering drugs, especially polypeptide drugs, are hot spot R&D areas and have gained national policy support and company investment attention. The most common type of polypeptide drug treats cancer and metabolic diseases.
Blood products are always in short supply. The Ministry of Health (MOH) pursued the Blood Products Double Plan and raised the retail prices of those products to boost the blood products market. Many factors will guarantee continuous growth in this area such as the increasing economy, the aging population and the evolving prescription habits.
Future Healthcare Trends
Topic: Clinical Trials Requirements
Present (2013): Although efforts are made to expedite clinical testing, stringent good clinical practice (GCP) is implemented to ensure quality products.
Future Outlook (2017): Requirements will increase (e.g., for more effective treatment of the disease itself rather than of just symptoms in comparison with placebo).
Present (2013): Increasing pressure has been imposed on reducing drug prices, and the MOH is focusing on streamlining the centralized procurement and distribution of essential drugs.
Future Outlook (2017): Price ceilings on essential drugs, together with restrictions on drug price margins during the distribution phase, are expected to curb unnecessarily high retail prices, making products more affordable.
Topic: Biological Medicines
Present (2013): The advantage in minimizing sides effects makes biological medicines important for finding the causes of patients' disease.
Future Outlook (2017): Strategic investments in funding projects on protein drugs, monoclonal antibody drugs, therapeutic vaccines, and small molecule drugs will strengthen companies' innovative capabilities.
Topic: Personal Genomic Data
Present (2013): Genomic analysis is conducted and performed primarily for individual patients' needs.
Future Outlook (2017): Physicians may aggregate individual patient case data to leverage daily practice findings in a sample population. This will be particularly useful in rate indications.
Game Changing Strategies
Goal: Build Strategic Alliances to Tap Potential Market
Game Changing Strategy: Considering the approaching patent expiration deadlines, domestic companies will see broader potential collaboration in research and development (R&D), manufacturing, and commercialization of current products to improve their core competitiveness.
Goal: Focus on Complex Diseases by Providing High-quality Products
Game Changing Strategy: Treatment for a complex disease such as oncology that addresses multiple indications are not well served. Therefore, biopharmaceutical companies may expand or continue their focus on complex disease therapeutics, capturing the opportunities to meet the unmet clinical needs.
Goal: Open Innovation
Game Changing Strategy: Companies may actively cooperate with top research institutions and universities to develop innovative drugs by permitting outside expertise to help expand product pipeline, which achieves greater returns from intellectual property.
Table of Contents
1. Executive Summary
2. China's Regulatory Pathway for Drugs and IVD
3. China's Regulatory Trends and Market Outlook
4. External Challenges: Drivers and Restraints
5. Forecasts and Trends
6. Leading Life Sciences Companies to Watch in China
7. M&A Activities
10. The Frost & Sullivan Story
Read the full report:
China's 2013 Life Sciences Industry Outlook and Regulatory Review
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