The Government’s efforts to cut drug spending will create challenges for international drugmakers.
The pharmaceutical market in China will grow by 3.2%, reaching a value of $149.37b, a report from Fitch Solutions has revealed. In 2019, the market was valued at $149.7b with a YoY growth of 5.5%. Over the extended forecast period, medicine sales will experience a 10-year compound annual growth rate (CAGR) of 4.5%, reaching $232.9b by 2029, the report added.
Though Fitch Solutions indicated government pressure to rein in pharmaceutical spending and a worsening fiscal position would create a challenging environment for drugmakers, they expect that the country still holds robust growth potential for pharmaceutical companies over the long term.
As the second largest pharma market in the world, China has become a strategic priority for most global companies. A rapidly ageing population, well-established manufacturing industry for pharmaceuticals, and notable government commitment to sector development are attracting foreign investments.
The report also revealed that medicine market access has improved significantly in the past few years, and that 181 drugs had been added to the national reimbursement drug list (NRDL) in two rounds of updates since 2017. In addition, 187 were added to the essential drug list (EDL) in 2018, including important medicines for treating cancer and metabolic disorders.
Fitch Solutions also found that global drugmakers were facing challenges as the Chinese government was on an ambitious campaign to cut spending on generic medications by billions of dollars so that it can shift funds toward novel treatments for life-threatening diseases like cancer.
The latest round of China’s centralised drug procurement saw the government pick 55 medicines and the bidding process resulted in the average price of the drugs dropping by 53%, the report further added.
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