Chinese pharma sector sees slower growth in 2014
Market hit by a slowing economy, regulations, cost containment measures and price cuts
The Chinese pharmaceutical sector saw slower but double-digit growth in 2014, in spite of a host of challenges. A slowing economy, regulatory shake ups, cost containment measures and price cuts, as well as healthcare reform turbulences have hit the drug sector in the country.
The drug market in China is estimated to have grown 13.4% in 2014 to reach CNY1,245bn, according to the China Pharmaceutical Guide 2014.
The slowing growth has, to a large extent, been driven by falling government healthcare investment as a result of the faltering economy, cost containment and activities against healthcare corruption, in addition to intensive and often irregular competition.
Following nearly a decade of healthcare reform, the old Chinese pharma business model, which has been mainly sales driven and heavily dependent on face-to-face promotions to doctors, is finally coming to an end.
Under pressure of escalating anti corruption campaigns, increasingly sophisticated cost containment measures as well as upcoming policy shifts in drug pricing and reimbursements, the pharmaceutical industry in China, especially in multinationals and leading domestic players, is now forced to look for a new business approach which is more in line with the reality of the Chinese healthcare business.
China is expected to move quickly from a sales driven to a marketing driven culture, said industry experts. They have warned that the Chinese pharmaceutical economy will face a more complex environment in 2015, with challenges from fallen growth as well as restructuring of the pharma industry and its external environments.
There will 'uncertainties and unbalances ahead', they added.
