CITI: Good News For Drug Makers, The Chinese Pharmaceutical Market Will Reach $200 Billion By 2020

china gold

Photo: gomattolson on flickr

Citi expects China to have a $200 billion pharmaceutical market by 2020 making it the second largest in the world, surpassing Japan along the way.The market is projected to increase from $40 billion now to $100 billion in 2015.

The Chinese market is very attractive for drug companies because of its ageing population, chronic disease growth, expanding healthcare insurance coverage, urbanization and increased investment in rural healthcare services.

Retail pharmacy distribution is also expected to grow from 36,000 to 170,000 pharmacies by 2012.

Citi believes Pfizer, Merck and Eli Lilly are in great positions to drive growth in the region. Merck and Eli are already scaling up their operations in China with Eli putting a special focus on its diabetes and oncology offering.

The drug companies will need to make inroads with Chinese hospitals to drive growth as well, according to Citi. Hospitals are incentivized to prescribe drugs, which account for 50% of a patients’ hospital costs.

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