Chinese government pays 55% of the all medical expenditure:
China looks a full grown country with regards to its healthcare sector. The number of diseases and mainly the kind of ailments that its citizens suffer from is very similar to that of the developed countries. Although the industry is well developed and has multiple facilities, the insiders believe this to be just the beginning. The private insurance companies make up to only 3% of the total industry in the nation. This obviously is stated to be a mere coverage and there is a potential for growth. China is shelling out 5% of its GDP (gross domestic product) into healthcare whereas countries like the US, Japan and Korea are investing much more comparatively. Highest of the GDP’s is spent by America (17.9%) followed by Japan (9.3%) and Korea (7.2%).
Even though the authorities are striving and adding up investment into healthcare and wellness the currently it is only spending 30% services and this is way behind with regards to the US and Japan which account for around 70%.investment wise the country’s healthcare industry is creeping up and 50 investments made out of the total 180 ventured into pharmaceuticals. Further there were wholesome investments made in different segments of the sector. A total of 30 investors saw devices as their pick, 60 of them chose services present in the healthcare niche and 40 of them went into research and development activities focusing on biotechnology. A total of 18 million Yuan spent on IT by healthcare ministry in 2012-a rise of 23% from previous year.
Moreover, China itself is well preparing to take over a notable space into the global healthcare industrythere are successful examples like Microport, Mindray and Fosun which are both into producing medicines and medical devices. These companies are catering to the homegrown market as well the foreign medicine markets.
According to the market research in the segment profitable opportunities are still possible for the local players as they have low penetration into their own market.
Homegrown healthcare brands are planning for expansion and this growth includes investing in the adjacent medical device segment. Such an act will increase the competition massively and bring down the profit margins.
After Microport, there are similar companies who are about to venture into the international markets.
Much more within the global and Chinese healthcare industry
which needs high range of research and development (example: cord blood, transplants, personal gene testing) can have heavy contribution from China.
Some activities which are expected to happen resulting in the growth of Chinese healthcare sector by 2020:
Local healthcare companies are starting up first to the market generic medicines along with high quality generic doses which are eligible as exportable drugs.
Local pharmacy leaders from China will take special interest in the development of innovative Molecules and Biosimilars.
The OTC (Over the Counter) market is expected to at least double or beyond to $60 billion by the end of 2020.