Foreign drugmakers hit pay dirt as China rolls out healthcare reforms: Fitch

Pharma sales will surge as new policies kick in.

Multinational pharmaceutical companies are among the biggest winners as China continues to liberalise its healthcare sector, a new report by Fitch revealed.

“Whilst the Chinese pharmaceutical market continues to face uncertainty on the back of challenges around drug pricing and the low levels of intellectual property protection, we maintain our view that it presents one of the most attractive investment destinations in the Asia Pacific region. The pharmaceutical sector is well-placed to see an uptick in foreign drugmaker activity,” the report said.

Fitch noted that China is well-positioned for continued foreign investment flows into the pharmaceutical sector, due mainly to its rapidly ageing population, a well-established manufacturing industry for pharmaceuticals and notable government commitment to sector development.

"China will continue to liberalise the healthcare sector to improve its quality and increase the coverage of the universal healthcare scheme to support the population with lower-income. This will enable a significant improvement in healthcare access which will result in increased demand for medicines, providing an improved outlook for healthcare providers and pharmaceutical firms,” the report noted.

In fact, the vast majority of major multinational pharmaceutical firms, including Novartis, AstraZeneca and Sanofi reported positive sales growth in China in the second quarter of 2018.

"Given the bright outlook for medicine sales and the substantial potential for growth in the market, these firms will seek to expand their presence,” the report said.