Why this is important to Wisconsin businesses: China is providing more subsidies for health insurance, and one province is making it easier to sell drugs from global producers.
China’s consumption of pharmaceuticals is growing rapidly as social changes pave the way for more access to medication.
The market size of the pharmaceutical industry in China reached ¥1.7 trillion ($250 billion USD) in 2021. In addition to domestically produced medical supplies and pharmaceuticals, China imported 220,000 tons of medical materials and drugs in 2020, a 39% increase over the previous year, according to China’s customs agency.
Several societal and governmental changes have fueled the trend:
- Financial subsidies for basic health insurance are rising.
- China’s growing middle class is demanding health management, and is willing and able to pay for it.
- The aging population—which is also on the increase—needs more medication, especially more expensive, imported drugs. As of 2021, nearly 20% of China’s population was over 60 years old.
Imported drugs face strict filing and inspection procedures before they can be sold in China, but the country is considering loosening some of those rules by shortening the drug registration review process.
Meanwhile, in Henan province, the State Council approved a three-year e-commerce pilot program for imported drugs. The first 13 over-the-counter medications already have received market authorization in China.
The program, which started in 2021, is expected to put pharmaceuticals into the hands of consumers more quickly and at a lower cost than by going through the traditional supply chain.
Wisconsin companies in the pharmaceutical industry may find more opportunities to sell their products in China as a result of the changing policies.
