Zhejiang Huili Capsules Co., Ltd.
Huili Imports and Exports Co., Ltd.
Add: Ru'ao Industrial Zone, Xinchang, Shaoxing, Zhjiang, China
Contact: Mr Barney Wang
Tel: +86-575-86780098
Mob: +86-13616508976
Fax: +86-575-86780116
E-mail: sales@hl-jn.com
Pharmaceutical industry in China - 2
Dec 12, 2017

Structure and trends


Currently China has about 3,500 drug companies, falling from more than 5,000 in 2004, according to government figures. The number is expected to drop further. The domestic companies compete in the $10 billion market without a dominant leader. As of 2007, China is the world’s ninth drug market, and in 2008 it will become the eighth largest market.


China’s thousands of domestic companies account for 70 percent of the market, and the top 10 companies about 20 percent, according to Business China. In contrast, the top 10 companies in most developed countries control about half the market. Since June 30, 2004, the State Food and Drug Administration (SFDA) has been closing down manufacturers that do not meet the new GMP standards. Foreign players account for 10% to 20% of overall sales, depending on the types of medicines and ventures included in the count. But sales at the top-tier Chinese companies are growing faster than at Western ones, according to IMS Health Inc. 


Even the top selling companies just barely exceed sales of $100 million (hospital market). Most of the Chinese drug-makers fall below the 20th ranking, but 30 of the top 50 companies are local. 


In addition, China’s over-the-counter market is growing fast and has become the fourth largest OTC market in the world. Foreign enterprises have been closely monitoring the expanding OTC market. Merck announced the launch of OTC program in China in September 2003. Roche listed China as one of its 10 core OTC markets, with the aim of growing its OTC drug sales by 50% in the next five years and reaching 1.3 billion in 2008. Novartis is expanding its OTC market share in China, and Wyeth has also entered OTC market.


The pharmaceutical market in China is dominated by its non-branded generic industry that operates with basic technology and simple production methods. Domestic pharmaceuticals are not as technologically advanced as western products, but nonetheless occupy approximately 70% of the market in China. Domestic companies are mainly government owned and fraught with overproduction and losses. The Chinese government has begun consolidating and upgrading the industry in an effort to compete with foreign corporations.


It is estimated that most hospitals derive 25-60% of their revenue from prescription sales, hospitals remain the main outlets for distributing pharmaceuticals in China. This will change with the separation of hospital pharmacies from healthcare services and with the growing numbers of retail pharmacy outlets. Retail pharmacy outlets are expected to grow in number once the government finally introduces its system to classify drugs as OTC. The government is now encouraging development of chain drug stores, but the full effect might not be seen for several years.


The price of pharmaceutical products will continue to decrease steadily. In June 2004, the price of 400 antibiotics in 24 categories, including penicillin, was reduced by, on average, 35%. The total value affected by this reduction was US$42 million. The central government has been playing a significant role in pharmaceutical price readjustment. Future price reductions will originate from hospital pharmaceutical retail shops.


The rural pharmaceutical market will shift significantly. 80% of counterfeit products are consumed in rural areas. This provides a huge opportunity for pharmaceutical companies to develop the market in rural areas. In 2005, Huanan Pharmaceutical Group, Guangzhou Ruobei Huale, Baiyunshan Pharmaceutical Group, and others, have stepped up efforts in targeting the rural market. 


The China Pharmaceutical Equipment Industry 2015 Market Research Report is a professional and in-depth study on the current state of the Pharmaceutical Equipment industry. 

 

Historic foreign involvement 


Bayer of Germany, the inventor of aspirin, began trade with China in as early as 1882. Hoechst AG, known as Aventis, sold its products through 128 distribution agents across China in 1887, becoming China's no. 1 Western medicine and dyeing provider. Eli Lilly and Company opened its first overseas representative office in Shanghai in 1918. ICI, the predecessor of the world's no. 3 pharmaceutical enterprise AstraZeneca, began trade with China in 1898.


Production levels 


In the 9 months from January to September 2004, the total output of the country’s pharmaceutical industry reached $40 billion, 15.8% higher than the same period of 2003. In the same period, 23 major state-owned pharmaceutical companies had sales of $10 billion. A survey of 16 typical city hospitals, the usage of drugs increased by 32.23% in the first half of 2004 as compared with that of 2003.

Around 36% of all China’s pharmaceutical enterprises are state-owned. Another 35% are privately owned domestic enterprises and the remaining 29%, foreign-funded. Synthetic drug manufacturing remains the pharmaceutical industry’s largest business in China, constituting 65% of industry sales. Another 21% of industry sales come from traditional Chinese medicine. Biotech-related medical products and medical equipment make up the rest.


Zhejiang Huili Capsules Co., Ltd.

                    Huili Imports and Exports Co., Ltd.


Add:Ru'ao Industrial Zone, Xinchang, Shaoxing, Zhjiang, China

Contact:Mr Barney Wang ,  Mr Cage Wang

Tel:+86-575-86780098


Mob:+86-13616508976 (WhatsApp/WeChat)

            +86-13362547777 (WhatsApp/WeChat)

Fax:+86-575-86780116

E-mail:sales@hl-jn.com


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