Presentation title UNCLASSIFIED. 2 China Healthcare & Lifesciences Roadshow.
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Transcript of Presentation title UNCLASSIFIED. 2 China Healthcare & Lifesciences Roadshow.
Presentation title
UNCLASSIFIED
2
China Healthcare & Lifesciences Roadshow
Life Sciences in China 2015
Presentation title
UNCLASSIFIED
Agenda for today
• Background to China Life Science & Pharma sector
• Commercial Challenges
• Opportunities for UK Companies & Research Organisations
In general, a small percent of people account for a high percent of spending
Distribution of health expenditures for the U.S. population, by magnitude of expenditure
(2009)
1%5%
10%
45%
65%
22%
50%
97%
$90,061
$40,682
$26,767
$7,978
Annual Mean Expenditure
• In the United States, 10% of patients account for 65% of costs
• Efforts should be focused on patients with the highest costs
• The situation may be quite similar in China
In China, total healthcare expenditure is growing rapidly…
Healthcare expenditure is growing rapidly… but remains below OECD average (China targets 7% by 2020)
China: 5.4% of GDPOECD: 9.3% of GDP
Out of pocket expenditure is decreasing as government expenditure is increasing.
China is a major contributor to global pharmaceutical market growth
China
Russia
Japan
Canada
U.S.
Brazil
U.K.
India
Spain Italy
GermanyFrance
≥20% 10-20% 5-10% 0-5% ≤0%
2010-15F CAGR
Percent ccontribution to global pharmaceutical market growth(2005-10 vs. 2010-15)
2711
127
58
44 48
100
80
60
40
20
0
China
Japan
EU5
U.S.
World
2010-15F
26
2005-10
12
Pharmaceutical market growth rate by major country (2010-15F)
IMS Analytics
There has been double digit growth in drug spending for many years in China
Standard Chartered. (2014) “China health care”. Equity Research.
China will soon be the world’s second largest drug market after the US, larger than Japan the top 5 EU countries by sales value
Drug spending still constitutes close to 40% of total healthcare expenditure(THE) but is slowly falling
Drug spending as a percent of THE in China is far higher than in the OECD, even after the declines of the last several years
Source: OECD Health Statistics and China Statistical Handbook 2013
740-50% of both inpatient and outpatient costs
Center for Health Statistics and Information, 2013; Meng et al., 2005
Background: There are many ministries, commissions, and organizations involved in healthcare
• There are many different bodies responsible for different aspects of healthcare in China (see next slide for org chart)
– NHFFC, NDRC, MoHRSS
– MOF, MoCA, MIIT, MOFCOM, CIRC
– CFDA, SIPO, SAIC, SATCM
• These agencies can sometimes have conflicting goals, which can complicate the reform process (i.e. MOF limiting the amount of government subsidies NHFPC calls for)
Rationalizing prescribing: Declines in antibiotic sales growth
• A sample of 420 hospitals showed declines in growth of second/third line antibiotics (and more use of more appropriate first line drugs) following national campaigns.
Tao et al. (2013) “Analysis of the Current Situation of Antibiotics Use in China: A Hospital-Based Perspective”. Therapeutic Innovation & Regulatory Science, 47(1), 23-31.
First-line
Second-line:
Third-line:
Standard Chartered. (2014) “China health care”. Equity Research.
Market Fragmentation: Multiple distributors and wholesalers cause price to go from RMB 20 to RMB 98 between wholesaler and patient
Factory price (RMB 20) increasing many times before getting to patient (RMB 120) from Chinese colleagues
Market Fragmentation
• Significant fragmentation exists at the manufacturing level, as well as along the distribution chain. In 2011 there were:
– 4,629 drug manufacturers
– 13,853 drug wholesalers
– 440,248 drug trading enterprises
• This fragmentation has led to significant problems with quality; China’s GMP standards do not meet international standards
UK Life Science Sectors
•Pharmaceuticals
•Genomics
•MedTech
•Big Data
Pharmaceuticals
What’s Included?Drug Manufacture/Services use technology to R&D - innovative skills and knowledge lead drug development. Fundamental and applied research from UK Universities.
Why is it a Priority?• China has an increasing requirement for new drug therapies
and clinical services to meet the needs of its aging population. A population exposed to an increasingly western life style and with it many of the concurrent conditions e.g. heart disease and cancer .
• China’s own Pharma industry is seeking opportunities to license and JV with innovative technologies . China current spends less than 1.5% of its GDP on life science/Pharma R&D.
Size of Market• China plans to spend 75 Billion RMB ($11.8B) on its
biopharmaceutical and medical technology sectors under the 13th Five Year Plan China’s $50 B pharmaceutical industry is dominated by generics and TCM it is under pricing pressures. Government is pushing the industry to move up the value chain e.g. biologics
Companies/ Stakeholders
•Enigma Diagnostics & Beijing Leadman Biochemistry Co., Ltd signed a £50m joint venture agreement to support the growing healthcare needs of China’s population.•Phynova, market approval for a traditional Chinese medicine (TCM) from the Medicines and Healthcare Products Regulatory Agency (“MHRA”) for its product, Phynova Joint and Muscle Relief Tablets•
Recent Activity
Genomics
Working with industry and government partners to develop both technology lead solutions to Data capture and use and construct appropriate data management policies for gathering and sharing health information.
Why is it a Priority?1.China has invested in the basic research of genome science Newborn screening programs are mandated throughout the country but vary between provinces and territories Genetic tests are encouraged while there are only one accredited state laboratory and few territorial laboratories in China.
2.China needs to develop a fully integrated and quality driven screening service deploying latest UK technology.
Size of MarketAnalysts estimate the market to be worth 50 billion Yuan ($8 billion) a year, based on the number of expected births and a testing fee of 3000 Yuan ($480) each. In the United States, the comparable market is estimated to be worth upward of $1.3 billion a year.
• Enigma Diagnostics & Beijing Leadman Biochemistry Co., Ltd signed a £50m joint venture agreement to support the growing healthcare needs of China’s population.
Presentation title
UNCLASSIFIED
UK Life Science Organisationhttps://www.gov.uk/government/organisations/ukti-life-sciences-organisation
•We help UK life science companies to do business overseas
•We help foreign life science companies to invest in the UK.
•We provide support from the earliest stages of research and development through to clinical trials, commercial operations and business partnerships
Contact the UKTI team for more information
• Visit: www.ukti.gov.uk/
• Email: [email protected]
• Mobile (China) : +13901014332
• Mobile (UK): 07957860939
• WeChat: AlanJMuir
Presentation title
UNCLASSIFIED
Thank You
谢 谢