New Healthcare Reform in a New Era

Challenges for Multinational Pharmaceutical Companies and Corresponding Countermeasures to be Taken

The report

New Healthcare Reform in a New Era: Challenges for Multinational Pharmaceutical Companies and Corresponding Countermeasures to be Taken is a series of articles on multinational pharmaceutical companies (MPCs) developed by Deloitte Research. As the healthcare reform progresses, MPCs are facing an increasingly challenging environment. For MPCs, if they achieve to adapt to China’s policies and market trends and reconstruct their strategies accordingly, they will still be able to seize market opportunities and develop new competitive advantages. This report analysis MPCs challenges and opportunities under the healthcare reform environment.

Viewpoints / key findings

The pharmaceutical industry, as a pillar industry that will fuel economic growth in the future, is expected to maintain medium to high growth rates during China’s 13th Five-Year Plan period. More precisely, several key factors are likely to jointly increase the consumption demand for medicine in China. These include: the increase in resident income, the upgrading of consumption structure, the accelerated population aging process and urbanization, the implementation of the "Healthy China 2030 plan" as well as further improvements in China’s healthcare insurance system. Meanwhile, other factors, including the need for medical cost controlling, the complicated ecosystem of the medical and pharmaceutical industry and the reinforced regulatory supervision over business compliance, will bring challenges for MPCs. The main findings are as follows:

  • Growth of MPCs’ sales in China has slowed down
  • Brand-Name Drugs have lost the advantage of high premium
  • “Trade price for market” negotiations have failed to achieve desired results
  • Looming trend towards replacement of imported drugs with home-made drugs
  • Operating pressure pushes pharmaceutical companies to adjust their business arrangements
  • A strategic transition has become essential
(English version)
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