The healthcare market in China continues to expand rapidly, driven by an aging population, economic growth, and an expanding basic health insurance. With the growing awareness of healthcare in China, the market is emerging fast. The pharmaceutical market in China is considered as one of the main sectors in the economy, encompassing many departments of healthcare field like the manufacturing of pharmaceutical machinery, clinical instruments, manufactured chemical substances and medications. There is an increasing number of leading global corporate organizations which have found significant long-term prospects in the healthcare market in China. Hence, a large number of overseas pharmaceutical corporations have already set up or expanded their presence in China.
This article will take a look at some of the main trends in the healthcare market in China, especially in tangent with COVID-19.
The COVID-19 has disturbed mankind’s way of life. Corresponding to the change in life, the consumer demand varies. To dip into the COVID-19 impact, here is a peek at the impact on healthcare in China.
Since the epidemic, 75% of consumers are giving greater importance to their wellbeing, the demand of products for precaution such as dietary supplements, traditional Chinese medicine, vaccines and health insurance are expected to grow.
Chinese mental health was also impacted by COVID-19. During the epidemic, many individuals have reported that themselves and their families have suffered from insomnia. Because of the quarantine, young Chinese people often stay up late watching series and playing games, damaging regular sleeping patterns. Some of them stated that they need help from melatonin and sleeping pills. The situation got even worst for medical workers. Due to high pressure and daily limited scope of activities, mental health significantly weakens and even aroused mental health disorders. When it comes to COVID-19 impact on healthcare in China, mental healthcare should also be taken into consideration.
A notable feature of China’s response to the COVID-19 has been the widespread use of mobile apps for medical information and services. Healthcare apps like Ping An Good Doctor, Ding Xiang Yuan, and Chunyu Doctor saw their user bases grow dramatically in response to the COVID-19. Ping An Good Doctor, for instance, reported a 900 percent increase in new users from December 2019 to January 2020.
During the epidemic, some Chinese hospitals are utilized robots to assist medical workers. Wuhan’s Hongshan Sports Centeri used robots and IoT-enabled technology to monitor patients’ temperatures, vital signs, heart rates, and other indicators to reduce personal interaction.
After the official confirmation that COVID-19 was human-to-human transmissible, Chinese citizens were keen on exploiting methods to combat the virus. Xinhua advised concerned people to try Shuang Huang Lian, an oral remedy, to combat virus, backing up the claim with a study by the Shanghai Institute of Meteria Medica and the Wuhan Institute of Virology. After the news report, Shuang Huang Lian sold out across the country and reached its peak on Baidu search even though the claim was denied by the popular medical information site Dxy.
[Source: Baidu Index, Shuang Huang Lian and COVID-19 searches on Baidu]
However, the Chinese pharmaceutical industry did stand in the spotlight during COVID-19 epidemic by proving its efficacy by practice. Of the confirmed cases of COVID-19 in China, 74,187 people used traditional Chinese medicine, accounting for 91.5%. Observation of clinical efficacy shows that the total effective rate of Chinese pharmaceutical to combat the virus has reached more than 90%. With the effective result shown, the global demand for Chinese pharmaceuticals are expected to soar.
Since the outbreak of COVID-19, people paid continuous attention to vaccines, which is seen as the core method to change the status quo and bring to normal life back.
[Source: Baidu Index, Chinese netizen searches for vaccines during COVID-19]
People’s growing awareness of healthcare and the acceleration of population aging have brought prosperity to healthcare market in China.
Healthcare in China is mainly supported by facilities such as hospitals and nursing homes.
The total number of hospitals in China has increased significantly over the last decade from roughly 197 thousand in 2008 to about 33 thousand hospitals in 2018. The region with the highest number of hospitals in China had been Shandong province with 2,451 hospitals, followed by Sichuan province with 2,219 hospitals. The booming trend of Chinese hospitals can be interpreted by the improve of China’s medical security system. 1,344.52 million people, over 95% of the country’s total population had been covered by the basic medical insurance system.
Chinese hospitals are divided into public hospitals and private hospitals by economic type. There had been 21,165 private hospitals in China, including 2,185 new ones compared with the same period of 2018 and accounting for 63.9% of the total number of hospitals. Social capital largely flows to specialized hospitals which need low investment but produce high return on investment and are in demand. In China, over 65% of private hospitals are specialized hospitals.
With the increase of income and the improve in the pension system in China, pension consciousness is gaining popularity among the elder, the demand for nursing homes in China is stimulated. From 2013 to 2017, the number of patients in nursing homes in China showed an overall upward trend, which reached more than 2 million in 2018. However, the supply gap was growing from 2016 to 2018, reaching 9.14 million in 2018. The composition of nursing homes is unified since most of them are government facilities; there are relatively few privately owned ones.
Regarding the required services for nursing homes, 18.9% of China’s elderly population requires professional treatment, however, 15.9% of practitioners lack senior-focused professional training and 76.9% only receive fundamental training. Related searches to “nursing homes” are “price,” “is it profitable to run a private nursing home,” and “how much is the nursing home per month.”
AI is greatly applied in the healthcare market in China. The market size of the AI-related healthcare industry already reached 9.6 billion RMB. In 2019, AI expenditure in Chinese hospitals was RMB1.7 billion, with an increase of 88% over the previous year. A survey conducted by AI Blue Book – Chinese AI development in healthcare 2019 shows that a majority of Chinese respondents (78.4%) hold supportive attitudes towards the development of AI in healthcare.
AI has become a national strategy in China. The state has put forward higher requirements for the development of medical artificial intelligence. In July 2017, the State Council issued the “Circular if the State Council on Printing and Distributing Plan for Artificial Intelligence Development in a New Era”.
AI’s unprecedented tech advancements stood out during COVID-19. Regarding healthcare, the most visible use of AI is in mass surveillance and diagnosis which greatly help on combating the virus.
The industry scale of the biotech market in China boomed from 2010 to 2017, with a growth from RMB315.6 billion to RMB919.4 billion. The average CAGR is 17.7%. In China, the biotech industry are divided into seven categories: biomedical industry, biomedical engineering, bioagriculture, biomanufacturing industry, bioenergy industry, bioenvironmental protection industry, and bioservice industry.
[Data source: chyxx.com –The Market Size of biotech in China, 2010-2017]
Biotech greatly contributed to speed up the confirmation of COVID-19. The core of COVID-19 testing diagnostic kits are Biochip, which enables virus testing within 15 minutes.
China is currently the country with the largest number of diabetes patients, which is around 116.4 million adults. The prevalence of diabetes in China increased by 2.7% from 2008 to 2013. The 20 to 39-year age group drives the increase of over-weight and obesity. IDF estimates that the annual health expenditure on diabetes in China is 294.6 billion dollars, ranking the first in the world.
In the early stage of diabetes, the increase in blood sugar of diabetic patients will not cause obvious symptoms of discomfort. It can only be discovered and diagnosed by blood collection, which makes it difficult for early detection and screening of diabetic patients. The penetration rate of diabetes diagnosis and treatment in China is only 30%, and over 60 million patients have not received treatment. With the development of economic, the national healthcare in China raises. Local governments have proposed a policy of free medical examination for the elderly once a year. In the early future, the demand of diabetes treatment will continue to expand with increasing penetration rate of diagnosis.
Dominated by foreign brands
Foreign brands still dominate the diabetes treatment market in China. They remain as the major contributors of new diabetic drug innovations. Compared with the global market, China’s diabetes drug structure is backwards, with traditional hypoglycemic drugs as the mainstay. But the new hypoglycemic is developing. In the adjustment of the national medical insurance catalog in 2017, five domestic DPP-4 inhibitors were included in the national catalog, and then liraglutide also entered the national medical insurance catalog through national negotiations. The launch of the new mechanism of hypoglycemic medicine in China and the introduction of them into the national medical insurance will bring about a structural upgrade of the domestic diabetes drug market. However, due to the high price of the new mechanism of hypoglycemic drugs, they are only used as second-line drugs.
China’s pharmaceutical market has been constantly growing in recent years. It is estimated to reach $161.8 billion by 2023 and take a 30% share of the global market. As part of the “Made in China 2025” industrial plan, China hopes to reinvent its pharmaceutical industry. The pharmaceutical industry is a high-technology field that requires massive amounts of research and development.
The vaccine market in China
As an important precaution method, vaccine is spurring in the healthcare market in China. Driven by the ‘Two Child Policy’ and the booming demand for novel vaccines such as HPV vaccine, the market size of Chinese vaccine is estimated to grow to 40 billion yuan in 2025.
[Data source: Statista, size of Chinese Vaccine Market, 2019-2025]
There are two categories of Chinese vaccine one stands for public sector (Category I) which are compulsory and free of charge, while the other one is part of the private sector (Category II). Category II vaccines in China will be included in the free-of-charge category I vaccines in China, leaving less market share for foreign companies and making it more difficult for foreign-made vaccines to stay in the Chinese vaccine market.
The market size of TCM is expected to reach to RMB537.6 billion in 2020, which account for 32.4% of the medicine market in China. TCM treatment shared the same popularity as western medicine when it comes to healthcare in China. A survey shown that 49% of respondents prefer TCM treatment, which is basically the same as that of Western medicine.
[Data source: Qianzhan, The Market Size of TCM in China, 2011-2020]
Indeed, we can find the first traces of traditional Chinese medicine 5,000 years ago. The treatment also adapted to the modern life and modern practices of the Chinese medicine. Traditional Chinese medicine has spread to 183 countries and regions in the world, currently 103 Member States have approved the use of acupuncture, 29 of which have established laws and regulations on traditional medicine, and 18 have included acupuncture in the medical insurance system. With the international recognition of traditional Chinese medicine and the “Belt and Road Development Plan for Traditional Chinese Medicine (2016-2020)” and other policies to encourage Chinese medicine culture to “go global”, the import and export trade see a good opportunity for development.
Author: Dongni He