Caring for the Future: Opportunities in China’s Healthcare Sector
The provision of effective, universal healthcare to its people has always been a concern of the Chinese Government. With a rapidly ageing population, an increasing rate of urbanisation and an ominous rise in
cases of non-communicable diseases, there is widespread awareness in China of the need to improve and modernise all aspects of the healthcare system.
With this in mind, the Chinese Government has identified as key priorities the improvement of the quality of the healthcare service and the harnessing of technologies that will help overcome geographical disparities in service. Investment of US$124 billion was earmarked in 2011 and hundreds of billions of dollars have been budgeted in pursuit of the aim to achieve universal healthcare coverage by 2020. The government also aims to extend the network of hospitals and clinics and has prioritised the
development of primary care and preventative healthcare systems.
Increasing the number and quality of facilities will underpin many of the other developments that China hopes to make in the provision of healthcare. Thousands of new hospitals have already been built and this construction activity will continue alongside the rebuilding and refurbishment of large numbers of existing facilities.
As well as architecture, design and construction, these projects will also include supply-chain opportunities in pharmaceuticals, medical equipment, e-health, ICT, diagnostics, training and facilities management.
In addition to public facilities, the involvement of private healthcare providers is also being encouraged by the government. Whereas joint-ventures were previously mandatory for entry into this sector, from 2011 wholly foreign-owned medical facilities have been able to enter the market.
China is now the world’s third-largest market for medical equipment. Sales reached US$14.7 billion in 2009 and are predicted to grow a further 12 percent in 2010-2014. However, for an overseas manufactured device to be sold in China, foreign companies must go through a rigorous registration process which
can be time-consuming and costly.
Despite increased local competition, opportunities remain for overseas manufacturers of medical equipment because of their advanced technology and a desire for foreign products among hospitals and patients. China is one of the world’s fastest-growing markets for the sale of pharmaceutical drugs
and for investment in medical research and development. Investment in R&D has been strongly encouraged by the Chinese Government and considerable potential exists in the market to develop cost-effective drug
treatments and to sell pharmaceutical products.
Large UK pharmaceutical firms have been active in China for many years and ambitious research programmes are underway into some of the world’s most widespread serious diseases, including those, such as gastric and liver cancers, that are increasingly common in Asia.
British pharmaceutical companies are at the forefront of this move into China, with important players including GlaxoSmithKline (GSK) and AstraZeneca rapidly expanding their operations throughout the Asian region. At GSK’s major R&D facilities, work focusses on neurosciences, with a start-to-finish approach that includes target identification, candidate selection, late-stage clinical studies and global registration. Medical conditions being researched include multiple sclerosis, Parkinson’s disease and Alzheimer’s disease.
AstraZeneca has seen similar growth in its partnerships with Chinese healthcare providers and government ministries since its entry into the market in 1993. Since then, the company has gained valuable insights into the opportunities for conducting R&D work tailored to patient needs in China and other parts of
Six years ago, the company established its first major R&D centre in China, the AstraZeneca Clinical Research Unit East Asia, located in Shanghai. It proved so successful that the company committed a further US$100 million for R&D expenditure in the country, including a state-of-the-art facility named the Innovation Centre China (ICC).
Going forward, the UK and China are creating a platform for cooperation between participants in the field of translational medicine and biopharmaceuticals, in particular between relevant policymakers, regulatory agencies, businesses, R&D centres and academic institutions in the two countries. By achieving
a step change in the UK-China relationship in two-way trade, investment and R&D, this may lead to the creation of a new generation of shared intellectual property and commercial ventures.
Investment in healthcare IT has risen significantly in China in recent years. Spending is expected to continue to rise, with much future spending be directed at establishing Regional Healthcare Information
Networks. These will be data centres and telecommunications networks designed to share data and clinical services among geographically dispersed communities. As well as driving efficiency, “e-health” is seen
as a way to bridge the geographic divide in the quality of healthcare provision across China.
The refurbishment of existing healthcare facilities and the ongoing construction of new ones have led to increased demand for the training and recruitment of hospital staff. This presents opportunities for the delivery of training programmes locally, in the UK and online in areas such as new medical practices
and techniques, the use of new equipment, hospital management processes and good healthcare practice.
The need to expand healthcare coverage and quality is creating increasing opportunities for providers of private health insurance. Premium healthcare has become part of the general boom in the consumption of luxury goods and services previously unavailable in China. Private insurance still accounts for only a very small amount of total healthcare spending, but this is not an insignificant figure considering the
size of the Chinese market and the fact that spending on private insurance continues to grow steadily in absolute terms.
Although there is no doubt that the life sciences market in China is a complex one, it is important to bear in mind the central importance given by the government to the reform and modernisation of the sector. This ongoing, high-level support means there will continue to be opportunities for UK companies
with the relevant experience and expertise over the years to come.
This article is taken from a special CBBC publication celebrating the 40th anniversary of UK-China diplomatic relations. View the full publication here.
Visit www.cbbc.org to find out how CBBC can help UK companies from all sectors do business with China.
Countries: China and Far East