China Biopharmaceutical Industry Report, 2006-2007

Summary

In 2006, under the influences of drug depreciation, publishing commercial bribery and the rise in raw material cost, the growth in manufacturing and sales of China pharmaceutical industry slowed down and so did the benefits. Although the sales revenue of the pharmaceutical industry increased by 19.7% year on year, the profit before tax only increased by 6.2%. Since the second quarter of 2006, the growth rate of drugs used in hospitals (first terminal) decreased dramatically to 6.3%, which was the lowest level in recent 10 years; while the retail terminal (second terminal) remained a steady growth, increased by 16.67% over the same period of 2005.

The sales revenue and total profit growth rate of Bio-pharmaceutical industry are 8.2% and 10.9% higher than the average level of pharmaceutical industry respectively, while the sales expenses growth rate is 6.1% lower averagely than the pharmaceutical industry.

Since 2005, the growth rate of global pharmaceutical market mainly pulled by North America slowed down to below 10%. Meanwhile, as the multi-national companies began to accelerate the globalization strategy, the Chinese market became the competitive hotspot and the investment featured by the sole proprietorship also increased greatly. Besides, the production & research in patent drugs are gradually localized in Chinese market.

The Chinese government is now taking steps to punish the commercial bribery and to standardize the market rule in the pharmaceutical field, and in addition, the drug price is getting decreased, all of which may temporarily restrict the industrial growth but is helpful to make the pharmaceutical administration much stricter and promote those enterprises superior in innovation of product and technology to enlarge market shares.

Bio-pharmaceuticals mainly engage in prescription drug. The old pharmaceutical products (including bacterin) have become very popular among doctors and patients owing to its higher performance-price ratio, so the sales also kept stable. However, the popularization of the new-born bio-pharmaceuticals in hospitals and disease control centres has to be confronted with the challenges in sales modes and price-making policy from multi-national pharmaceutical giants. So, it is imperative and necessary for sales increase of new prescription drug to catch up with the international academic extension model as soon as possible.

As the investment hotspot of China bio-pharmaceutical industry, the growth of bacterin, especially the bacterin outside plan, is far higher than that of the normal treatable drugs; the R&D of monoclonal antibody drug is quite active because of its strong pertinence and low risks in clinical research.

Contents

• 1. Development Overview of China Bio-pharmaceutical Industry
  • 1.1 Operation Status of China Bio-pharmaceutical Industry in 2006
  • 1.2 Analysis on Key Bio-pharmaceutical Enterprises in China
    • 1.2.1 Beijing Tiantan Biological Products Corporation Limited
    • 1.2.2 Hualan Biological Engineering Inc.
    • 1.2.3 Others
• 2. Prospect and Opportunities of China Bio-pharmaceutical Industry
  • 2.1 Prospect
  • 2.2 Investment Opportunities