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pharmaceutical market remains consistently strong at approximately 20%. Urban Population: 557m
Urban Setting: 49 cities
China is a highly localized and fragmented market, but the major local markets with a population >1m;
are very attractive. Due to this fragmentation, distribution is complex requiring There will be 219 cities
localized strategy for comprehensive coverage. with >1m by 2025
Size: Roughly the same
Qualified care giving staff is a significant problem, as is general access to modern land mass as the US
healthcare. While pressure on the healthcare system may limit future growth,
Languages: More than 235
China’s growing middle class is expected to reach 700 million by 2020, which distinct languages
drastically increases the potential of many to afford healthcare. GDP (PPP): US$7.18 trillion
(2008 est.)
Healthcare Funding & Infrastructure: GDP Real Growth Rate:
• The government is experimenting with various solutions to improve healthcare and equity of care 9.8% (2008 est.)
delivered across the country. Currently China ranks fourth from the bottom in health equity.
GDP per capita (PPP):
• China has several multisite hospitals with beds in the 3k-4k range; reportedly, the largest single site US$6,100(2008 est.)
hospital, in Sichuan, has 3,400 beds.
• Up to 30% of people of the lowest economic status point to problems with health as their primary Major Industries: Mining,
cause of poverty. Reduced earnings and large out-of-pocket health expenses due to poor health Textiles, Manufacturing,
very often lead directly to poverty. Consumer Products,
Electronics
HEALTHCARE FUNDING SNAPSHOT CHINA US
Total expenditure on health as percentage of GDP 4.5% 15.3%
Per capita total expenditure on health at average exchange rate US$90 US$6,714 REALITIES OF
General government expenditure on health as percentage of total 9.9% 19.1% HEALTHCARE
government expenditure
Private expenditure on health as percentage of total expenditure on health 58% 54.2% Only 40% of the population
Out-of-pocket expenditure as percentage of private expenditure on health 92.9% 23.5% is covered by some type of
Social security expenditure on health as percentage of general 54.1% 28.7% health insurance.
government expenditure on health
Within the healthcare system
NASCENT AREAS OF RESEARCH: Eight years ago, the focus was on molecular biology while four there are no treatment
years ago, protein analysis. Today, the focus is on cell analysis. The government also has a strong guidelines, little regulation,
interest in the validation of TCM (Traditional Chinese Medicine). Life science research accounted for
1.5% of overall R&D spending in China. As a percent of R&D, life science R&D was 0.023%. There is inadequate government
little interest in personalized medicine. Instead the priorities are on issues such as liver cancer and funding, and a high need
rabies. Accessible vaccines are also a major concern. for well trained staff.
TRAINING: 47% of health professionals have only a secondary school diploma while 14% of health Lower respiratory infections,
professionals only have a bachelor degree or above. Medical staff is not well distributed throughout the Hepatitis B, and tuberculosis
country creating inequalities in healthcare service across the country. Hospital accreditation is not well are the major communicable
regulated and is not linked to comprehensive safety records.
diseases. Leading causes of
GOVERNMENT FUNDING: There are short-term uncertainties with government funding. Previous death are heart disease,
funding growth rates were at 40-50%, but are now expected to increase at a rate of 15-20%. However, stroke, and cancer.
the government has a strategic interest in maintaining its commitment to government funding of research.
Most funding is prioritized from the top down. There are PI initiated projects, but these are small in
comparison to centrally determined priorities. Beginning 5 years ago, there has been a steady increase
in government research funding – from 2.5b RMB in 2004 to 8.2b RMB in 2009 (US$365m to US$1.2b).
Many top lab directors seek to build showcase facilities.
Woodward Partners is a management consulting firm that provides strategic assistance to help firms grow in Asia. This report reflects a few of
the recent findings Woodward Partners generated through in-depth interviews with key opinion leaders and analysis of the market realities of the
hospital, pharmaceutical, and healthcare markets in China. Contact Woodward Partners for further information on how to navigate within
the healthcare, life science industry in China. Please email Woodward Partners at inquiry@woodward-partners.com or phone +1 503 345 0764.