The document summarizes a PwC study on opportunities for pharmaceutical companies in China's county-level hospital market. Some key points:
- China's county-level hospital market (Tier 6-7 cities) is estimated at $200 billion currently and is poised to become the largest sector and main driver of growth in the coming decades.
- County hospitals have improved infrastructure and attract patients from rural areas, maintaining 20-30% annual growth even as China's overall market growth slows.
- However, few domestic or international drug companies have penetrated this market currently. Understanding local needs, regulations, and developing new business models will be critical for companies to succeed.
To date, the Indian pharma market has been dominated by the trade/retail segment. This is unlike most mature
markets globally which usually operate in a multi-channeled business model involving
not only trade outlets, but also hospitals, over-the-counter and retail chains. However, in light of the increasing demand for quality care in hospitals, as well as
increased government spending and recent regulatory changes, India is slowly evolving
into a multi-channel market. The most striking aspect of this shifting paradigm is the
increasing dominance of the hospital segment.
The Hospitals and Outpatient Care Centers Market Analytics Report (http://bit.ly/2a34J1U) provides strategists, marketers and senior management with the critical information they need to assess the global hospitals and outpatient care centers and compare it with other markets and across geographies.
Buy Now
Hospitals and Outpatient Care Centers Global Market Analytics Report is a detailed report giving a unique insight into this market. The report is priced at $2000 for an individual user. To use across your office the price is $3000 and $4000 if you wish to use across a multinational company.
Clients are able to input on the design of the report and highlight points of special interest.
IMS Health’s Thailand GM Amit Backliwal explains the central role that the three government reimbursement schemes play in Thailand’s pharmaceutical market and how recently enacted spending limits on government healthcare schemes have left MNCs struggling to adapt. This new arena makes placement on the National List of Essential Drugs (NLED) critical, say Backliwal. Click to learn how to get your products placed on the NLED.
To date, the Indian pharma market has been dominated by the trade/retail segment. This is unlike most mature
markets globally which usually operate in a multi-channeled business model involving
not only trade outlets, but also hospitals, over-the-counter and retail chains. However, in light of the increasing demand for quality care in hospitals, as well as
increased government spending and recent regulatory changes, India is slowly evolving
into a multi-channel market. The most striking aspect of this shifting paradigm is the
increasing dominance of the hospital segment.
The Hospitals and Outpatient Care Centers Market Analytics Report (http://bit.ly/2a34J1U) provides strategists, marketers and senior management with the critical information they need to assess the global hospitals and outpatient care centers and compare it with other markets and across geographies.
Buy Now
Hospitals and Outpatient Care Centers Global Market Analytics Report is a detailed report giving a unique insight into this market. The report is priced at $2000 for an individual user. To use across your office the price is $3000 and $4000 if you wish to use across a multinational company.
Clients are able to input on the design of the report and highlight points of special interest.
IMS Health’s Thailand GM Amit Backliwal explains the central role that the three government reimbursement schemes play in Thailand’s pharmaceutical market and how recently enacted spending limits on government healthcare schemes have left MNCs struggling to adapt. This new arena makes placement on the National List of Essential Drugs (NLED) critical, say Backliwal. Click to learn how to get your products placed on the NLED.
Pharmaceuticals: KHR718bn (US$178mn) in 2011 to KHR806bn (US$193mn) in 2012; +12.2% in local currency terms and +8.8% in US dollar terms. Growthforecast unchanged from Q312, although we have adjusted the absolute value following reassessment of the market size.
The insights driving superior healthcare outcomes in Asia Pacific.
Asia-Pacific Insight Magazine brings together IMS Health experts from across the region, delivering fresh perspectives on how to navigate through the challenges and opportunities in Asia-Pacific pharmaceutical market.
The pharmacy retail market is valued at INR 216 bn in 2009 and estimated to reach INR 432 bn in 2011. The market is fragmented and dominated by the unorganized sector.
The report provides a snapshot of the pharmacy retail market. Market overview gives a quick picture of the market with estimated market size, growth rate and revenue split between the organized and unorganized sector. An analysis of drivers reveals that growth in pharmaceuticals sector, increase in healthcare spending, changing disease profile, consumer attitudes, attractive margins and growth in OTC segment is driving growth in this sector. The key challenges identified include fragmented nature of Industry, lengthy supply chain, counterfeit drugs and FDI Regulations.
The report identifies the current market trends including loyalty schemes, value added services, tie-ups with retail firms, rural expansion, entry of Government in pharmacy retailing, entry of private labels, organized retailers starting pharmacy chains. The competitive landscape profiles the major players in this sector including the business description, number of stores and expansion plans for each player. The report also provides details of the key developments in this sector.
Pharma Co's in Emerging Markets - Innovation & Technology are Key to GrowthAnup Soans
Emerging markets are predicted to account for a third of global pharmaceutical spend by the end of next year – and seen as critical for the sustained growth of leading pharma companies.
The report summarises the findings of a Cambridge Consultants workshop held in Mumbai, India, earlier this year. The product design and development firm brought together senior personnel from both Indian and multinational pharma companies to debate whether emerging markets can be an opportunity to drive sustainable growth.
The consensus was that the term ‘emerging markets’ covers nations in parts of Africa, the Middle East and South East Asia, as well as the more traditional countries of Brazil, Russia, India and China. But all the delegates said emerging markets cannot be grouped into a single cluster to chalk out common strategies. Clustering markets around parameters such as regulatory pathways or therapeutic applications was considered the best approach.
“Emerging markets are facing rapid growth of chronic ‘Western’ diseases like diabetes, hypertension, chronic respiratory problems, cancer, heart disease and neurological disorders,” said Ambuj Jain, India general manager at Cambridge Consultants. “In some cases, conditions like diabetes are turning into near-epidemic situations.
“In India, for example, the prevalence of diabetes and cancer is projected to rise by 25-40% over the next 10 years. This shift gives pharma companies an opportunity to market their global products in emerging markets, backed by tested ‘go-to-market’ strategies and operating models.”
The report says key barriers which need to be addressed in many emerging markets are the affordability and accessibility of medicines. Improvements in affordability will be driven by rising disposable incomes and increasing insurance coverage. Growth in accessibility will come from increases in government spending and medical infrastructure, and new business models for rural areas. The acceptability of medicines is also expected to rise, as a result of the growth in chronic conditions – and the resulting increase in the self-administration of drugs.
Workshop delegate Sanjay Bhanushali, a director of global pharma company Cipla, said: “Emerging markets are critical for the sustained growth of leading pharmaceutical organisations. They represent a significant proportion of the world’s population and many of their governments are increasingly focusing on improving healthcare. Innovation and technology – with the emphasis on patient and stakeholder needs – will be crucial to success in these markets.”
Diagnostics was seen by the workshop delegates as a key focus area where innovation can drive sustained growth.
The United States might out-perform the IVD markets of many other nations in growth as well as size. Yet there are challenges. Will ACA-based changes be shortlived? This White Paper discusses them. Based on information from our United States IVD Market.
India pharmacy retail market report -2020 |India Pharmacy Retail MarketKen Research Pvt ltd.
India Pharmacy Retail Market Outlook to 2020 – Growth Driven by Surge in OTC Drugs Sales and Expansion of Online Pharmacies” provides a comprehensive analysis of the various aspects such as market size of the India Pharmacy Retail and Online Pharmacy Retail Market. The report also covers the market segmentation on the basis of organized & unorganized pharmacies, prescribed drugs, OTC drugs & private label products, category of drugs and generic & patented drugs. The report shares the company profile and competitive landscape for major players in the organized pharmacy sector and online pharmacy market.
Pharmacy retail market in India is driven by growth in the pharmaceutical sector, registered revenues of INR ~ billion in FY’2015. With the advent of online pharmacy retailers in the market, the industry is likely to witness a surge in the coming future. The retail pharmacy in the India has escalated at a CAGR of 19.4% from INR ~ billion in FY’2010 to INR ~ billion in FY’2015. The surge in growth is chiefly guided by the escalation in urbanization, increase in household expenditures, increasing smartphone users, need for convenience and rising literacy rate in the country coupled with growing medical awareness.
Pharmaceuticals: KHR718bn (US$178mn) in 2011 to KHR806bn (US$193mn) in 2012; +12.2% in local currency terms and +8.8% in US dollar terms. Growthforecast unchanged from Q312, although we have adjusted the absolute value following reassessment of the market size.
The insights driving superior healthcare outcomes in Asia Pacific.
Asia-Pacific Insight Magazine brings together IMS Health experts from across the region, delivering fresh perspectives on how to navigate through the challenges and opportunities in Asia-Pacific pharmaceutical market.
The pharmacy retail market is valued at INR 216 bn in 2009 and estimated to reach INR 432 bn in 2011. The market is fragmented and dominated by the unorganized sector.
The report provides a snapshot of the pharmacy retail market. Market overview gives a quick picture of the market with estimated market size, growth rate and revenue split between the organized and unorganized sector. An analysis of drivers reveals that growth in pharmaceuticals sector, increase in healthcare spending, changing disease profile, consumer attitudes, attractive margins and growth in OTC segment is driving growth in this sector. The key challenges identified include fragmented nature of Industry, lengthy supply chain, counterfeit drugs and FDI Regulations.
The report identifies the current market trends including loyalty schemes, value added services, tie-ups with retail firms, rural expansion, entry of Government in pharmacy retailing, entry of private labels, organized retailers starting pharmacy chains. The competitive landscape profiles the major players in this sector including the business description, number of stores and expansion plans for each player. The report also provides details of the key developments in this sector.
Pharma Co's in Emerging Markets - Innovation & Technology are Key to GrowthAnup Soans
Emerging markets are predicted to account for a third of global pharmaceutical spend by the end of next year – and seen as critical for the sustained growth of leading pharma companies.
The report summarises the findings of a Cambridge Consultants workshop held in Mumbai, India, earlier this year. The product design and development firm brought together senior personnel from both Indian and multinational pharma companies to debate whether emerging markets can be an opportunity to drive sustainable growth.
The consensus was that the term ‘emerging markets’ covers nations in parts of Africa, the Middle East and South East Asia, as well as the more traditional countries of Brazil, Russia, India and China. But all the delegates said emerging markets cannot be grouped into a single cluster to chalk out common strategies. Clustering markets around parameters such as regulatory pathways or therapeutic applications was considered the best approach.
“Emerging markets are facing rapid growth of chronic ‘Western’ diseases like diabetes, hypertension, chronic respiratory problems, cancer, heart disease and neurological disorders,” said Ambuj Jain, India general manager at Cambridge Consultants. “In some cases, conditions like diabetes are turning into near-epidemic situations.
“In India, for example, the prevalence of diabetes and cancer is projected to rise by 25-40% over the next 10 years. This shift gives pharma companies an opportunity to market their global products in emerging markets, backed by tested ‘go-to-market’ strategies and operating models.”
The report says key barriers which need to be addressed in many emerging markets are the affordability and accessibility of medicines. Improvements in affordability will be driven by rising disposable incomes and increasing insurance coverage. Growth in accessibility will come from increases in government spending and medical infrastructure, and new business models for rural areas. The acceptability of medicines is also expected to rise, as a result of the growth in chronic conditions – and the resulting increase in the self-administration of drugs.
Workshop delegate Sanjay Bhanushali, a director of global pharma company Cipla, said: “Emerging markets are critical for the sustained growth of leading pharmaceutical organisations. They represent a significant proportion of the world’s population and many of their governments are increasingly focusing on improving healthcare. Innovation and technology – with the emphasis on patient and stakeholder needs – will be crucial to success in these markets.”
Diagnostics was seen by the workshop delegates as a key focus area where innovation can drive sustained growth.
The United States might out-perform the IVD markets of many other nations in growth as well as size. Yet there are challenges. Will ACA-based changes be shortlived? This White Paper discusses them. Based on information from our United States IVD Market.
India pharmacy retail market report -2020 |India Pharmacy Retail MarketKen Research Pvt ltd.
India Pharmacy Retail Market Outlook to 2020 – Growth Driven by Surge in OTC Drugs Sales and Expansion of Online Pharmacies” provides a comprehensive analysis of the various aspects such as market size of the India Pharmacy Retail and Online Pharmacy Retail Market. The report also covers the market segmentation on the basis of organized & unorganized pharmacies, prescribed drugs, OTC drugs & private label products, category of drugs and generic & patented drugs. The report shares the company profile and competitive landscape for major players in the organized pharmacy sector and online pharmacy market.
Pharmacy retail market in India is driven by growth in the pharmaceutical sector, registered revenues of INR ~ billion in FY’2015. With the advent of online pharmacy retailers in the market, the industry is likely to witness a surge in the coming future. The retail pharmacy in the India has escalated at a CAGR of 19.4% from INR ~ billion in FY’2010 to INR ~ billion in FY’2015. The surge in growth is chiefly guided by the escalation in urbanization, increase in household expenditures, increasing smartphone users, need for convenience and rising literacy rate in the country coupled with growing medical awareness.
In this file, you can ref resume materials for tv production coordinator such as tv production coordinator resume samples, tv production coordinator resume writing tips
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The 2016 IMS APAC Insight Magazine provide insights to unveils new areas of play, new methodologies and new geographies that are poised to disrupt the healthcare landscape in this region.
The Future of Community Pharmacy in England
http://www.atkearney.com/documents/10192/649132/The+Future+of+Community+Pharmacy.pdf/1838dede-b95a-4989-8600-6b435bd00171
Growing Pains. China new's realities and the necessity of an informed strateg...QuintilesIMS Asia Pacific
China is a rapidly evolving healthcare market. However companies that take too macroscopic approach to projecting growth, disregarding the more granular trends across drug categories, risk facing a gap between assumed and actual portfolio growth. To address this gap, companies have a variety of options, ranging across levels of difficulty and the degree of transformation necessary.
Download the paper to learn more.
Growing population, increasing affordability, comparative cheaper treatment costs and JCI,quality standards as opposed to the west and medical tourism thereof, increased health insurance penetration, increased patient awareness, out-of-the-box unconventional thinking by the healthcare players for better operations, government opening up its arms to PPP and even providing tax holidays will be the key factors to look out for which would drive the future of healthcare in India.
PharmAsia Summit2013 report "In search of new growth models for Big Pharma in...Franck Le Deu
Our latest report on the dynamics of the China pharmaceuticals market. Developed with BayHelix and Elsevier. We discuss the recent trends impacting the market and their implications on Pharma MNCs strategies and business models.
Future Trends in Healthcare Industry in India by Dr.Mahboob Khan PhdHealthcare consultant
According to recent studies conducted, the customer's (patient) aspirations are fast changing. Customers are growing more aware of their health needs, demand quick response, less waiting times, and above all - demand nearness of the healthcare unit to them.
Customers though now demand better quality care; they however now do not want to travel much as in earlier days.
And if you notice, the billing and pricing though important, is not a very high priority now as insurance reach is getting stronger (to the tune of 40 per cent among patients visiting a urban hospital).
If this is the window to the future of healthcare, then it leaves immense opportunity for existing hospitals across the country to revamp and re-organise in order to woo back their immediate local drainage population as the competition would heat up soon. The patients would have a lot to choose from, now being insured.
As per various studies including a report by IDFC, and Mc Kinsey, Indian Healthcare industry will be worth $125 billion in the next five years.
Good Foundations: Building Healthcare M&A and Real EstateDuff & Phelps
Several fundamental shifts have changed the face of healthcare in North America. A new report, “Good Foundations: Building Healthcare M&A and Real Estate,” published in association with Mergermarket, explores the way healthcare companies are increasingly embracing innovative ways to raise capital and fund future projects, including selling real estate assets to third-party capital providers.
1. 1 8 i n s i g h t n ov e m b e r 2 0 1 4
B Y ANDREW CHEN AND JOHN LIN
healthca re
A PwC study
reveals
significant
opportunities
for pharma-
ceutical
companies at
county-level
hospitals in
China
Editor’s note: This article is part of a short series
from PwC. Given recent developments regarding
the pharmaceutical industry in China, this piece
looks at whether the China pharmaceutical
market is still attractive.
A
s the world’s fastest-growing
pharmaceutical market, China
a t t r a c t s i m m e n s e g l o b a l
attention for its rapid economic
growth. However, the market has
recently slowed due to challenges from
government pressure in regard to cost
containment and anti-corruption programs.
Analysts have scaled down their growth
estimates from last year, and this trend could
continue. However, earlier this year, a PwC study
found that by dividing the China market into
multiple city tiers by economic scale, the county
segment not only shows great potential but is
also poised to become the most important driver
of growth in the decades to come.
The growth is coming from the county-level
hospitals, located in more than 1,700 “basic”
county level cities (Xian Ji Shi) which we also
define as Tier 6 and 7 cities. This market bears
great opportunities, but also carries unique
challenges. Thanks to healthcare reform, county-
level healthcare institutions, e.g. People’s
Hospitals, have been improving their
In Counties,There’s
Room for Growth
County hospitals are ripe with opportunities for drug companies. Pictured here is Jingdong Hospital in Luannan county,
Hebei province.
shutterstock
2. n ov e m b e r 2 0 1 4 i n s i g h t 1 9
Aside from the attractive market size and
growth rate, prescription behavior has also
drastically diversified and improved. Though
antibiotics continue to dominate the market with
a more than 50 percent share, oncology and
cardiovascular products occupy a relatively large
share as well. These are mostly OTC products,
where Rx and branded generics account for
roughly 30 percent. Though small, the demand
for MNC and MNC-JV products has achieved
considerable scale as well.
PwC’s research shows that only a few
domestic manufactures have approached this
Tier 6 and 7 market, accounting for less than 10
percent of the market share. Beside usage of
products on China’s Essential Drug List (EDL),
the market is monopolized by general dealers,
individuals and distributors. Part of the issue is a
knowledge gap. Many hospital leaders and
healthcare professionals (HCP) have expressed
the desire for additional clinical education on
the therapeutic usage of the drugs to understand
the efficacy and benefits to patients. Further
study reveals that it’s the complexity and unique
characteristics of the market that have hindered
MNCs from pursuing the pharamecutical
market. Most companies struggle to understand
entry barriers including affordability, policy,
HCP needs and the requirement for a different
channel model.
Low affordability
Generally speaking, income and consumption
level are relatively low in rural areas. Although
healthcare reform has provided nearly full
coverage, the county system primarily uses the
new rural cooperative medical scheme, which in
reality, serves only 70 percent of the insured
population. The system’s limitation regarding the
funding, reimbursement and medical care
constrain market access for portfolio products.
Policy impact
While Chinese healthcare reform prioritizes
the development of county-level hospitals, it also
infrastructure around capacity and technology.
Many of these county-level hospitals even exceed
t h e s t a n d a r d s o f C l a s s I I h o s p i t a l s ,
benchmarking Class III hospitals. The quality of
the county-level hospitals has attracted more
patients from rural and township counties
because of the lack of basic healthcare services
back home, further boosting the prosperity of
county-level hospitals. Currently, this segment
has maintained a healthy growth rate of 20 to 30
percent over the past few years.
Considering the macro environment changes,
the growth rate of the county-level market
segment will persist at more than 20 percent
each year, while the total China market may slow
down to only 10 to 15 percent. The county
hospitals will fuel the future growth of this
sector, and understanding the competitive
landscape in this market will help MNC’s to
drive their future business strategies in China.
Currently, the market size of tier 6 and 7
cities is around RMB200 billion. Our research
indicates that government hospitals typically
boast more than 500 beds and an annual drug
procurement budget of about RMB60 million.
More advanced institutions with revenue in
excess of RMB200 million with 1000-plus beds
may have a drug procurement budget upwards
of RMB100 million. Based on the configuration
that each county has one People’s Hospital, one
traditional Chinese medicine (TCM) hospital
and one women and children’s health center,
PwC estimates that the average drug value size is
approximately RMB100 million per county via
these hospitals.
The drug consumption volume from the
1,700 county hospitals compounded with local
clinics and community health stations is
estimated at RMB200 billion, accounting for a
quarter of the entire China pharmaceutical
market. Going forward, in light of the saturation
of tier 1 and 2 cities, the government will
continue to expand its healthcare coverage at the
county level. The county segment is expected to
become the largest sector of the Chinese
pharmaceutical market and will fundamentally
change the current configuration.
“Understanding
the
competitive
landscape in
this market
will help
MNC’s to
drive their
future business
strategies in
China.”
3. 2 0 i n s i g h t n ov e m b e r 2 0 1 4
enacts strict market restrictions. First, public
hospitals are required to control their overall
drug consumption percentage—for those at the
county-level, this percentage is at less than 40
percent. Meanwhile, with the release of the
Essential Drug List (EDL), the Ministry of
Health requires institutions of different tiers to
reach specified proportions of EDL usage, a task
that is harder to execute in large hospitals
compared with in county-level ones. Currently,
EDL usage hovers between 10 to 20 percent and
is expected to exceed 20 percent.
Additionally, healthcare reform has stipulated
a “zero mark-up” policy for public hospitals in
Tier 6 and 7 cities, impacting these institutions’
profits. PwC estimates that about 80 percent of
county-level health institutions have adopted
this policy or central management to cope with
these challenges as alternatives.
Differentiated demands from HCPs
Many foreign manufacturers believe that the
compliance risk is rising in this market and that
county-level HCPs have clinical education needs
that are tough to meet. As such, compliance
becomes a key concern. “The doctors have quite
clear clinical education requirements, and the
demand has not been satisfied,” says one
company leader after visiting a large number of
hospitals at the county-level. “The support of
such academic requirements on the content is
key to penetrating this market but overshadowed
by compliance concerns.” Moreover, the program
needs to be re-engineered considering the HCP
knowledge gap and the dynamic regulatory
requirement to meet county-level hospital needs.
Need for a feasible model
Agents and big distributors are the primary
channels through which to sell products to
county-level hospitals, due to any single
hospital’s small sales volume. Nonetheless,
logistical challenges abound. The successful
operations of any drug manufacturer will require
more innovation than just simple adaptations of
Tier 1 and Tier 2 sales models.
The medical market of Tier 6 and 7 is
attractive, and PwC believes it is important for
Mickey:
Please
use
a
box
around
and
light
gray
color
background.
Tier 6&7 cities market size estimation (2013)
PwC
4. n ov e m b e r 2 0 1 4 i n s i g h t 2 1
local players and especially for MNCs. This
segment will be the main driver for steady
growth in China over the next few years. MNCs
have huge advantages including a sophisticated
promotion model, top sales management, strong
product portfolio and R&D capability. This
competitive edge enables MNCs to perform well
in the premium market. However, it may be too
difficult to translate their existing business
models to conquer the challenges of the county
market. Some of the first companies in this
market are still struggling to develop a feasible
business model after failing due to various
reasons.
Consequently, pharmaceutical companies
intent on pursuing this burgeoning business
opportunity will need to conduct in-depth
analysis of the characteristics and factors affecting
the Tier 6 and 7 markets, devise an innovation
model in line with the laws of market operations
and make strategic developments based on the
nature of market enterprise. PwC has analyzed
and identified some practical elements for success
and suggests manufacturers integrate them into
their enterprise strategy and tactics before
working out their market entry model. In next
issue, we will discuss more about how some of the
companies have successfully executed these
innovative models to meet the new market and
compliance requirements.
Andrew Chen is China Med Tech Leader in the
PwC Management Consulting Shanghai office. He
can be contacted at andrew.cy.chen@cn.pwc.
com. John Lin is a Senior Manager in the PwC
Management Consulting Shanghai office, and can
be contacted at john.j.lin@cn.pwc.com