Outlook on Pharmaceuticals Market in 2010    

"From January to August this year, China's combined production value of the pharmaceutical industry was RMB615.877 billion, a growth of 17.39% over one year earlier, the growth was lower than that in 2008," released Lin Jianning, director of the Southern Medical Economic Institute of the State Food and Drug Administration of China, at the 21st Session of the National Medical Economic Information Briefing held on October 26th in Beijing.
   When reviewing the running situation of the national pharmaceutical industry in 2009 and forecasted the medical economy in 2010, Lin also disclosed that the sales revenue of China's pharmaceutical industry in the first eight months amounted to RMB577.675 billion, with a year-on-year increase of 17.57%, compared with the 28.41% growth in the same period of 2008.
   Lin Jianning analyzed that the reason of slower growth in the pharmaceutical industry this year was largely due to the plunged exports amid the global financial crisis. In the first eight months, the total pharmaceutical imports and exports was RMB33.175 billion, with an increase of 2.3% year over year. Of that the exports suffered a year on-year drop of 3.85%. The pharmaceutical active ingredients (or pharmaceuticals technical) exports contributed to 47.38% of the total exports, and suffered a year-on-year drop of 12.1%.
   Therefore, the pressure caused by the shrinking exports can only be alleviated by expanding the domestic markets. In fact, China's central government has promulgated the new healthcare reform decree on April 6th, defining an enlarged coverage of health insurance, increased governmental subsidies for healthcare system and other favorable factors, which has further enhanced the domestic demand for pharmaceuticals and helped fundamentally the pharmaceutical industry recover and grow.
    Lin Jianning gave his prediction at the meeting that China's pharmaceutical industry is expected to achieve a combined production value of around RMB1 023 billion in 2009, an increase of 18% over the previous year. In 2009 the total pharmaceutical consumption in China was about to reach RMB620 billion. The rigid demand for pharmaceuticals and the expanded medical insurance consist of the main engines driving the pharmaceutical economy to grow, Lin Jianning emphasized.
   "The overall pharmaceutical industry enjoyed a great growth this year," said Mr. An Haoyi, chairman of Sichuan Shuzhong Pharmaceutical Company Limited. "Our company is expected to record sale revenue of RMB1.8 billion this year, with an increase of 50%."  
   As one of the five major special subjects in the new healthcare reform decree, the regime of essential medicines has recently been launched officially, the essential medicines catalogue (primary part) and the government's guideline management on maximum retail prices has also been issued. With regard to the impact of essential medicines system on China's pharmaceutical market, many industry specialists once believed that the implementation of the system would trigger broad industry reshuffle and promote the realization of a nationwide pattern of distribution. But viewing the practical results in the past few months, the system only brought small short-term impact on the pharmaceutical industry. "The implementation of the essential medicines system would not lead to industry-wide reshuffle in short term, may benefit some companies only," Lin Jianning analyzed. "Among the RMB850 billion governmental expenditures, around RMB289 billion will be used to subsidy consumers by expanding the scope of healthcare insurance."
   Lin Jianning estimated China's pharmaceutical industry is expected to achieve a combined production value of around RMB1 250 billion in 2010, up 23%.