This report reviews the current trends and market outlook in China’s pharmaceuticals and health care industry. It also discusses the stock performance and financial highlights for leading players in the sector, including Shanghai Pharma, China National Accord (Sinopharm Accord), Harbin Pharma, Yunnan Baiyao, and Huadong Medicine.

Chinese government spending on health care grew at a compounded annual growth rate (CAGR) of 32.01% between 2005 and 2012. As a result of rising disposable income and health awareness, health care spending per capita in both urban and rural areas is trending up. Nevertheless, public health care expenditure as percentage of total GDP in China still trails many developed economies like the United States, Canada, and Germany.

Revenues from the Chinese pharmaceutical industry grew by a CAGR of 23.3% from 2006 to 2012. The Chinese government has allocated RMB 1.49bn to a subsidy fund to support the development of traditional Chinese medicine in 2013. Chemical drugs preparation, Chinese-prepared medicine, and chemical medicine were the three largest product categories in the pharmaceutical industry in the first half in 2013. Total sales of Chinese-prepared medicines topped more than 90% of total industry revenue in 2012.

Key Points:

• Firms surveyed in this report include Shanghai Pharmaceuticals Holding Co. Ltd. (Shanghai Pharma), China National Accord Medicines Corp. Ltd. (Sinopharm Accord), Harbin Pharmaceutical Group Co. Ltd. (Harbin Pharma), Yunnan Baiyao Group Co. Ltd. (Yunnan Baiyao), and Hangzhou Huadong Medicine Co. Ltd. (Huadong Medicine).

• Health care spending per capita in urban and rural China increased at a CAGR of 9.15% and 18.63%, respectively, between 2004 and 2012.

• Sales of traditional Chinese medicines grew at a CAGR of 21.54% between 2002 and 2012.

• Revenues from the Chinese pharmaceutical industry grew by a CAGR of 23.3% from 2006 to 2012.