Transcript Wuhan Life Sciences

Presentation title
UNCLASSIFIED
China Healthcare & Lifesciences
Roadshow
2
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
• 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
Distribution of health expenditures for the U.S.
population, by magnitude of expenditure
(2009)
Annual Mean
1%
Expenditure
5%
10%
$90,061
22%
45%
$40,682
65%
$26,767
97%
$7,978
50%
In China, total healthcare expenditure is growing rapidly…
Health Expenditure (RMB 100 million)
35000
30000
25000
20000
15000
10000
5000
0
2005
2008
2009
2010
2011
2012
Government Health Expenditure
Social Health Expenditure
Out-of-Pocket Health Expenditure
Total
2013
Healthcare expenditure is growing rapidly… but remains below OECD average (China
targets 7% by 2020)
OECD: 9.3% of GDP
China: 5.4% of GDP
Out of pocket expenditure is decreasing as government expenditure is
increasing.
Percentage of total health expenditure by
source
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2005
2008
Government Health Expenditure
2009
2010
2011
Social Health Expenditure
2012
2013
Out-of-Pocket Health Expenditure
China is a major contributor to global pharmaceutical market growth
Percent ccontribution to global
pharmaceutical market growth
(2005-10 vs. 2010-15)
Pharmaceutical market growth rate by
major country (2010-15F)
100
Russia
U.K.
Canada
80
Germany
France
Spain Italy
U.S.
China
44
48
World
8
Japan
7
EU5
11
U.S.
26
China
Japan
India
60
5
12
40
Brazil
27
20
12
2010-15F CAGR
≥20%
10-20%
5-10%
0-5%
≤0%
0
2005-10
IMS Analytics
2010-15F
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
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2009
2010
China
2011
OECD Average
Source: OECD Health Statistics and China Statistical Handbook 2013
740-50% of both inpatient and outpatient costs
60
52
50
51
49
44
43
44
44
43
42
41
40
30
20
10
0
2008
2009
2010
Outpatient
2011
2012
Inpatient
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.
First-line
Second-line:
Third-line:
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.
Market Fragmentation: Multiple distributors and wholesalers cause price to go
from RMB 20 to RMB 98 between wholesaler and patient
Standard Chartered. (2014) “China health care”. Equity Research.
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
•
Companies/ Stakeholders
Recent Activity
•Enigma
Diagnostics & Beijing Leadman Biochemistry Co., Ltd signed a
China plans to spend 75 Billion RMB ($11.8B) on its
£50m joint venture agreement to support the growing healthcare
biopharmaceutical and medical technology sectors under
needs of China’s population.
the 13th Five Year Plan China’s $50 B pharmaceutical industry •Phynova, market approval for a traditional Chinese medicine (TCM)
is dominated by generics and TCM it is under pricing
from the Medicines and Healthcare Products Regulatory Agency
pressures. Government is pushing the industry to move up
(“MHRA”) for its product, Phynova Joint and Muscle Relief Tablets
the value chain e.g. biologics
•
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 Market
Analysts 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.
UK Life Science Organisation
https://www.gov.uk/government/organisations/ukti-life-sciencesorganisation
•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
Presentation title
UNCLASSIFIED
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