China Pharmaceutical Logistics Industry Report, 2009

In recent years, China pharmaceutical logistics industry has changed fundamentally, which is reflected in the accomplished or ongoing logistics projects. Large-scale pharmaceutical distribution centers supported by T-bond discount loans have been founded and many small and medium-size pharmaceutical distribution centers are also under construction.

Pharmaceutical logistics is the result of the development of the pharmaceutical industry which is connected with pharmaceutical
industry most closely. Market capacity and potential demand of pharmaceutical logistics industry can be reflected by those of pharmaceutical industry indirectly. Pharmaceutical industry is called as "eternal sunrise industry", mainly because of expanding market demand, which increasingly rely on the service offered by pharmaceutical logistics. Both of the demand for China pharmaceutical industry and that for China pharmaceutical logistics industry are driven by the following factors -- economic growth, people's awareness of self health care, aging population, urbanization, as well as health care system reform.

According to the latest data released by the National Bureau of Statistics of China in 2009, from January to May of 2009, China pharmaceutical manufacturing achieved the sales revenue of RMB321.988 billion, up 18.07% from the same period last year, but the growth rate was 11.36% lower than that of the same period last year. In 2008 around, China pharmaceutical manufacturing achieved the sales revenue of RMB825.36 billion, up 26.5% year-on-year. The average growth rate of China pharmaceutical manufacturing has been more than 20% over the past decade, far above the GDP growth rate in the same period. Chinese pharmaceutical logistics market has grown up fast with the development of pharmaceutical manufacturing.

In Chinese pharmaceutical market, a large number of pharmaceutical wholesale enterprises emerge and survive owing to China's lack of macro-control policies and market access conditions, the isolation of drug regulation from drug operation, and local protection policies. As a result, in China pharmaceutical logistics industry, there are numerous small pharmaceutical enterprises which accounts for 90%; pharmaceutical enterprises have low intensity, low profit margins and low managerial efficiency; many enterprises produce considerable same products. At present, there are 16,500 wholesale pharmaceutical enterprises and 119,000 retail pharmaceutical enterprises in China, but the annual pharmaceutical sales revenue achieved by them only account for less than 10% of the global sales income. At the same time, the products often belong to the homogeneous varieties. 97% of chemicals produced in China are generic drugs. Innovation and research of new drugs are backward and the development of preparation progresses rather slow. Few innovative drugs exist.

Source: www.researchinchina.com

New Chinese player enters probiotics market

New Chinese player enters probiotics market
By Shane Starling, 01-Sep-2009



Fenchem says its entry into the probiotics market is prompted by global growth in demand for probiotic products in North America and Europe.

The Chinese supplier recently debuted seven “outstanding strains” after spending about two years researching more than 200 versions of the bioactive bacterium.

Company spokesperson, Junny Liu, told NutraIngredients.com Fenchem’s Pro-Fit range will target European and American markets with strains the company says are backed in in vitro and animal studies although she did not provide further details on these.

“The global probiotics market especially European market is now growing rapidly,” Liu said. “So we beginning to move into the probiotics market now. We screened out some strains with high activity and stability through in-vitro and animals studies.”

Liu said the studies were not yet published because the company was in the process of applying for a patent.

“According to the patent application principle, we can not open any information before the patent is granted,” she said. “So we have no plant to publish the studies at present.”

She said small trial deals had been signed with European and American companies, but the “quantity is not very large”.

Manufacturing methods

The seven strains in the Pro-Fit range are Lactobacillus acidophilus, Lactobacillus casei, Lactobacillus paracasei, Lactobacillus plantarum, Lactobacillus rhamnosus, Bifidobacterium lactis and Bifidobacterium longum.

The strains are manufactured using protoplast fusion and recombination engineering technologies were also used to screen the strains and determine their biofunctions.

But the company would not provide further detail about these technologies.

Now that it is claiming membership in the community of probiotic suppliers, Fenchem has joined the Swiss-based International Probiotics Association (IPA), which counts the likes of Danisco and Chr Hansen, in its fold.

As an IPA member, Fenchem, “is authorised to join the forum for the exchange of research and latest breakthroughs in probiotic technology and new product development,” Liu said.

The company said the range was stable enough to be used in both supplements and functional foods and said the ingredient would target traditional probiotic health areas of gut health and immunity.

The company, which has a wide portfolio of offerings including prebiotic fibres in the gut health area, said it has three sectors of excellence for Pro-Fit:

* selection of strains
* high density and stability cultivation
* high density and stability production of “live probiotic powder”

While European and American markets have shown strong growth in recent years, along with others, probiotic health claims are yet to be approved anywhere in the world except Canada, which approved a series of gut health claims earlier this year.

Pharmaceutical giants eye China's booming market

Pharmaceutical giants eye China's booming market

(China Daily)
Updated: 2009-08-24

China's ambitious $124-billion effort to provide basic health coverage for the vast majority of its 1.3 billion citizens by 2011 is a brimming opportunity for global pharmaceutical companies. As growth in the US and European markets remains sluggish, many giant pharmaceutical companies are expanding their sales forces, distribution channels and research operations in China to tap into the country's robust drug market. China's drug market is expected to grow about 22 percent annually over the next five years, said Mandy Chui, senior principal of (Intercontinental Marketing Services) IMS Health Inc.

Chui is the China expert at IMS Health, which provides market data on the pharmaceutical and healthcare industries. "We see companies continuing to invest in China because the other markets are not growing," Chui said. "For companies, China's growth is certainly a good story to tell to Wall Street, right?" With a huge and aging population, rapid urbanization and adoption of Western lifestyles that give rise to hypertension, obesity and other diseases, China is poised to become the world's third-biggest pharmaceutical market by 2013, up from its current No 5 spot, said Chui.

The $24.5-billion market is expected to swell to between $68 billion and $78 billion by 2013, Chui said, leaving it behind only the US and Japan. "China is taking over from Germany and France," she said. "It's like a big wake-up call. If they (big pharmaceutical companies) are not in there at this point in time, all of them are not going to grow," Chui said.

In the race to penetrate the Chinese market, she said European drug makers such as Bayer AG, AstraZeneca PLC and Sanofi-Aventis SA have taken the lead. US drug makers were once content to grow in their home market, but now they are eager to "play catch-up," she said.

Pfizer Inc CEO Jeff Kindler said that China is an increasingly important priority for the world's biggest drug maker, which aims to make vaccines a big part of its China effort. "Not only is it necessary to be there, we are there," Kindler said.

Chui said drugs for diseases commonly seen in China, such as hepatitis B, will have blockbuster potential. An estimated 30 million of China's people have chronic infections with hepatitis B - a virus that can lead to cirrhosis of the liver and liver cancer.

Many large pharmaceutical companies have geared up their outreach efforts to increase treatment rates for the liver disease that kills more than 300,000 Chinese people a year, Chui said. Bristol-Myers Squibb Co's hepatitis B drug Baraclude - a pill introduced in 2006 - has the clear market lead in China over GlaxoSmithKline PLC's antivirals Heptodin and Hepsera, Bayer AG's Nexavar and several interferons, she said.

No company has any products of blockbuster scope, which typically means annual revenues of $1 billion or more. In China, Chui said, some could arrive within five to 10 years. Despite the price gap between generics and branded drugs, branded drugs that have lost patent protection still are favored in China, Chui said.

China zet groeicijfers neer van 25% per jaar in de pharmaceutische industrie

China zet dit jaar verwachte groeicijfers neer van 25 % in de pharmaceutische sector.

2008 Overview of China’s pharmaceutical sector and expectations for 2009

By Daisy Wang, Pharmaceutical Manufacturing News Monday, 26 January 2009 During 2008, China’s pharmaceutical sector continued high growth in sales and profits, with Chinese herbal pieces prepared for decoction, chemical preparations and chemical active pharmaceutical ingredients (APIs) segments seeing higher-than-industry-average increases in profits. Combined sales for the period increased 25.8 percent year on year, mainly driven by rises in sales of chemical preparations and biopharmaceuticals. The average gross margin for the industry stood at 30.7 percent, 0.4 percentage points lower than a year ago, while gross profits posted an annual increase of 29.1 percent, a rate 21.9 percentage points lower than a year ago. For the period, chemical preparations posted an increase of 25.4 percent and 36.6 percent in sales and profits before tax, respectively. However, when comparing the first 11 months of 2008 with the first eight months, chemical APIs recorded a decrease of 6.1 and 27.1 percentage points in growth of sales and profits, respectively, due to reductions in orders, prices and demand from foreign countries as a result of the financial turmoil worldwide. These factors are expected to continue to bring the growth rate of the APIs segment down in 2009. Looking into 2009, the pharmaceutical sector in China is expected to maintain high growth as a whole, thanks to policies put in place by the government to extend the coverage of country’s medical insurance scheme. and increased investments by the government in the manufacturing of vaccines, drugs and medical equipment. Pharmaceutical products made in China were for the most part exported to Europe, North America and other Asian countries in 2008, with exports to the three regions collectively accounting for 88 per cent of China’s total. The country’s foreign trade with other Asian countries reached US$16.2 billion for the first eleven months of 2008, a year over year growth of 17.1 per cent. Exports stood at US$11.3 billion, up 25 per cent from a year prior, with Japan, India and South Korea being the three major export destinations. China’s foreign trade with Europe amounted to US$15.5 billion, a year over year growth of 34.3 per cent. Exports reached US$8.4 billion, accounting for 28.8 per cent of China’s total. Germany was the country’s largest export market in Europe, with exports totaling US$1.9 billion, followed by the Netherlands and Italy. Foreign trade with North America totaled US$8.9 billion, a year over year growth of 30 per cent. Exports added up to US$6 billion, up 34.7 per cent from a year prior. The U.S. remained China’s largest export destination in North America. In addition, approximately 19 per cent of China's healthcare products were exported to the U.S. China’s domestic drug makers remained leading exporters of active pharmaceutical ingredients during the first eleven months of 2008. The leading exporters included Zhejiang Medicine, Zhejiang NHU, Northeast General Pharmaceutical Factory, as well as Hebei Welcome Pharmaceutical and Zhejiang Medicines and Health Products Import and Export. In addition, domestic pharmaceutical producers have played an increasingly important role in China’s exports of preparations for western medicines, though Pfizer Pharmaceuticals remained the largest exporter of the preparations. Six pharmaceutical companies were ranked among the list of top 10 exporters of preparations for western medicines. China's trade surplus in term of pharmaceutical products soared during the first eleven months of last year. The increases in trade surplus are mainly attributable to the upgrade of the country’s pharmaceutical sector. The proportion of high value-added items to exported pharmaceutical products has been growing year by year. However, the deepening of the financial turmoil has had effect on China’s APIs exports, with a number of Chinese pharmaceutical exporters experiencing a decline in export orders.