China's Pharmaceutical Industry to See 30% Profit Growth in 2009      

China's health and medical system has witnessed great progress since the nation's reform and opening-up drive. However, there still remain lots of problems, notably the imbalance of medical service development nationwide.
   While the rich find it easy to have their medical care demand met, a big part of the rural population and a certain group of the urban residents are still short of medical services due to low income. For the poor, they cannot even enjoy the basic medical and health services.
   To improve the situation, the Chinese government is forging ahead a reform plan in the medical and health system, with details set to be announced in the first half of 2009. The reform will undoubtedly be conducive to the long-term development of the nation's pharmaceutical industry.
   The reform is aimed at satisfying the whole nation's demand for the basic medical and health service. This will be realized by increased government investment in setting up medical and health service infrastructures at grassroots levels and a multi-layer medical insurance system as well as a security system for drug use. The reform will optimize and rationalize the allotment of the nation's medical resources, improve the way how patients see doctors and enable the medical care organizations to provide services to more grassroots patients.
   Generic pharmaceutical (drugs that are commonly used) makers, diagnostic reagent producers, and the manufacturers and vendors of medical apparatus and instruments are expected to benefit from the medical reform.
   Market observers estimated that the increased coverage of medical insurance nationwide would translate into new pharmaceutical consumption of around RMB80 billion in 2009, 44% up from 2008. The domestic pharmaceutical industry is set to rise approximately 20% in sales volume and about 30% in net profit in 2009.
   The medical reform would also boost the pharmaceutical distribution sector. However, as rural market is always too distant and community housings are too scattered, the distribution cost will go up. This indicates the medical logistics sector would see a slighter growth in end markets.