Bayer Sees Sharp Growth in Chinese Medical Market
Company Plans to Roll Out 20 products in China Over the Next 5 Years
German drug and chemical maker Bayer expects China's medical market to grow nearly 10-fold over the next decade as the country aims to overhaul its medical system, a top executive said on Tuesday.
To tap that growth, Bayer plans to roll out 20 products in China over the next five years, increasing its pace from 2009 when it introduced three new products into the market, said Chris Lee, who heads the company's operations in the China region. Bayer expects China's medical market to be worth $80 billion annually by 2013, and $220 billion by 2020, versus about $25 billion last year, Lee said at a briefing in Beijing.
At the beginning of this year, the maker of Aspirin tablets, weed killers and coatings used to protect cars, carved its Chinese market, including Hong Kong, out of the Asia Pacific region to be an independent one after the China region became one of its global top three markets last year. Bayer reported China sales of €530 million in 2009, up 28% from the previous year. The company established a global research and development center in Beijing last year, and it aims to invest €100 million over the next five years from 2009.
China, with 1.3 billion people, holds great promise for foreign drug makers, especially those with patents on drugs with no ready alternatives. China's plan to broaden the list of medicines eligible for a rebate from July is also expected to benefit Western drugmakers, such as Astrazeneca and Sanofi-Aventis.
Pharmaceutical spending currently accounts for less than 5% of China's gross domestic product (GDP) but analysts say this could grow by 18% annually, offering opportunities for foreign manufacturers over the coming three to five years. Beijing plans to spend about $125 billion to develop the healthcare system over a three-year period, aiming to establish a platform for universal healthcare access by 2020 and plans to build thousands of hospitals and clinics to make it more accessible to the general public, in particular in rural areas.
"From a business prospective as well as the general standpoint, China does need to improve the overall healthcare availability and access to the general population," said Lee.
"We have an ambitious plan, and we think that we can continue to grow, positioning ourselves as one of the fastest and one of the leading healthcare and pharmaceutical companies in China."