First China Overview
|Keys to Success|
|First China Pharmaceutical Group is one of a few pharmaceutical distribution companies in Yunnan Province to be granted a "License of Internet Pharmacy Information Service" allowing online marketing and order processing.
|First China Pharmaceutical Group is positioned to achieve near-term growth by dramatically expanding its product offerings, leveraging online ordering in order to bypass city and county distribution layers, increasing its customer base, and acquiring other established distributors.
|The Chinese pharmaceutical market is growing more than 20% per year. China is on track to become the third-largest prescription drug market next year, with sales expected to grow by $40 billion by 2013 as the country improves its healthcare infrastructure.
In the People’s Republic of China disposable income, standards of living, government support for healthcare, percentage of the population over sixty, and lifestyle related diseases are on the rise, creating increased health consciousness and demand for health products. With health becoming a top priority for the world’s most populous nation and second largest economy, China’s pharmaceuticals market is thriving.
The global market for pharmaceuticals is expected to grow nearly $300 billion over the next five years, reaching $1.1 trillion in 2014. Global pharmaceutical sales growth of 4 to 6% is expected this year. In 2009, the market grew 7% to reach $837 billion. China’s pharmaceutical market is expected to continue to grow at a 20+ percent pace annually. (IMS Health, “IMS Market Prognosis”, April 10, 2010).
China is arguably the most attractive emerging pharmaceutical market. Through 2013, BMI forecasts a robust annual growth rate with annual per capita spending rising from $27.60 to $54.40. Spending as a percent of GDP is expected to increase from 0.97% to 1.16%. Key drivers of market expansion are the introduction of universal health insurance, a booming economy, more chronic diseases, and an aging population. By 2018, annual pharmaceutical sales will have reached a staggering $132.7 billion. (BMI, “China Pharmaceuticals and Healthcare Report Q4”, October 2009)
In April 2009 the Chinese government announced a new set of reforms aimed at universal, safe, affordable and effective basic healthcare for the nation’s 1.3 billion population by 2020. The government has committed to spending an additional $124 billion on healthcare between 2009 and 2011. (OECD, “Economic Survey of China”, February 2010)
China’s pharmaceuticals market, including nutritional products and consumer drugs, will more than double to $110 billion by 2015 from $44 billion in 2008, Credit Suisse AG estimated in a November 2009 report.