The Life Sciences Industry in China (China)
This article was originally published in PharmAsia News
China's life sciences industry has grown steadily by 16.1 percent per year between 1978 and 2005, and by 19.4 percent during the past five years, to become a $51.8 billion industry in 2005. Chinese life sciences companies have dented the dominance of Western synthetic drug products in China, with Western products falling from 60 percent of the market in 2000 to 54 percent today. China's life sciences industry carries a low profitability margin of 8.12 percent in 2000 and 8.45 percent in 2005 because of tough competition, extremely tough generic drug competition, and downward pressure on drug prices from governmental authorities. Chinese research and development spending has expanded by 28 percent during the last four years to reach 1.02 percent of total sales in 2005, an amount far below the 15 percent or more of sales that Western companies redirect into pharmaceutical research. China's aging population and increasing frequency of chronic diseases means that Chinese demand for medicine will grow. China's government plans to promote over-the-counter drugs and also increase market investment in research and development to a goal of 2 percent of sales by 2010, and 2.5 percent of sales by 2020. China's main competition is India, and China's drug regulatory framework remains unclear and too bureaucratic. IMS Heath states that China in 2005 had a $29.6 billion total market for chemical and synthetic raw medicines, and a $12 billion market for over-the-counter and ethical pharmaceuticals, with traditional Chinese medicines representing a third, popular category. (Click here for more
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