Boston, MA -- (SBWIRE) -- 09/04/2012 -- BMI View: Despite the country's calls for cheaper pharmaceutical access, we maintained that China will be a highly attractive market for pharmaceutical players. In addition, its strong pharmaceutical and medical devices trade in 2011 and in the first quarter of 2012 highlight that the general weakness in its macroeconomic has not filter down to the sector and instead the sector performance will largely hinge on the country's healthcare reform plans and the subsequent release of its Second National Essential Drug List this year.
Headline Expenditure Projections
- Pharmaceuticals: CNY432bn (US66.7bn) in 2011to CNY523bn (US$81.7bn) in 2012; +20.9% in local currency and +22.1% in US dollar terms. Forecast broadly in line with Q212.
- Healthcare: CNY2297bn (US$355bn) in 2011 to CNY2,595bn (US$406bn) in 2012; +13% in local currency terms and +14.1% in US dollar terms. Forecast up from Q212 following receipt of new data.
- Medical Devices: CNY117bn (US$18.2bn) in 2011 to CNY146bn (US$22.8bn) in 2012; +24.4% in local currency terms and +25.7% in US dollar terms. Forecast up from Q212 due to stronger than expected trade.
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Risk/Reward Rating: China maintains its score of 62.5 from Q212 and moved up the ranks from the firth to the fourth position on our proprietary index. This is largely due to the decline in Singapore's score from 63.4 in Q212 to 61.9 in this quarter.
Key Trends And Developments
- In May 2012, The president of J&J's Xian-Janssen Pharmaceutical joint venture, Thad Huston, said the firm is interested in acquiring local firms or products in mental health, oncology, immunology, vaccines and over-the-counter drugs in order to continue its growth in China. Huston specifically said the firm is 'not interested in doing a generic or traditional Chinese medicine (TCM), for example'.
- In April 2012, Chinese police arrested 22 people for producing and selling pharmaceutical capsules containing high levels of chromium. The police detained 11 people from four manufacturing firms in Xinchang, a major production base, a public security bureau spokesperson said. According to reports, 43 capsule manufacturing firms will be inspected by the police. The State Food and Drug Administration has released an emergency notice ordering the suspension of sales and consumption of drugs packed into the contaminated capsules. Drugmakers will face legal action if the results of the inspection show they were unable to meet government standards.
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