In China, reports of the 12th five-year plan for the biomedical and pharmaceutical distributions generated optimistic forecasts for these sectors. Beijing, Shanghai, and other provinces also followed suit by introducing their own supplementary 12th five-year plans for biomedicals.
This optimism contrasted with the more somber note made by an investment consultancy on the lack of meaningful progress in the medical reform. The anticipated adjustment to measures relating to the Essential Drug System also captured the attention of the editorial media. The media reported that the “zero-margin” policy may be abandoned and the original planned system of designated production and distribution favored by major domestic suppliers adopted.
The news that captured the most attention in terms of follow-up commentaries, however, was the story that a district government in Hangzhou spent 300 million yuan to buy back the health institutes it sold for 75 million yuan to private investors between 2002 and 2003. Commentators viewed the price as an expensive lesson for buying back public service responsibilities previously abdicated by the district government.
In the region, biomedicals are also capturing the attention of the Singapore government, which announced a plan to invest S$3.7 billion to further develop the biomedical sciences sector. IT and electronic businesses are also expanding their presence in the healthcare sector in the region with Agilent Technologies announcing its plan to open a global bioanalytical instruments facility in Singapore and Samsung reported to be mulling an investment in a medical equipment company.
This month’s news reports suggest a generally optimistic prospect for biomedical and medical IT businesses. In China, for business aiming to capitalize on opportunities from the medical reform, the evolving nature of the healthcare service system continues to present challenge. Judging from the issue frames expressed through commentaries, public opinion remains critical of the medical reform’s progress to date and shall continue to represent a key force in influencing the future policy direction of the market.
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中投顾问对医改进展的进度则持谨慎态度。该顾问公司发表的分析研究指出，“新医改已经过去一大半，其当初中央财政8500亿的拨款也所剩无几，但是为什么中央及地方投入这么大的财力和精力，医改仍然停滞不前？”（新医改方案进行大半仍浮于表面）。另根据新快报报导，广东省卫生厅副厅长廖新波在自己的博客上发起投票， 74%的网友选择“看病报销比例大了，自费也多了”。廖新波说，在一年半的实践中，很多问题都找不着北，或者重新陷入“政府与市场”之争。 (医改一年半费用降了吗?)
The Communist Party of China Central Committee has proposed the nation’s new five-year development program for 2011 to 2015. On the social development front, the government indicated that China is to improve public services.
In addition, biomedical is listed as one of the key strategic areas for economic development. The five-year plan for the pharmaceutical distribution sector is expected to continue the theme of consolidation and increased scale and strength.
According to China Security Net (生物医药产业振兴规划:三大领域受益最明显):
….The preliminary plan has confirmed the value of industry production target to exceed 300 billion yuan, a 200% increase from the value of 2009. Beijing, Shanghai and other provinces have all introduced supplementary 12th five-year plan for their biomedical sectors.
…Medical equipment and vaccines are areas attracting the most market attention. Presently, the medical equipment market represents 14% of the overall medical market in China, compared with 42% in international markets. As for the vaccines market, the global vaccine market is 38 billion US while China’s market is estimated at 5 to 6 billion yuan.
…The pharmaceutical distribution sector’s 12th five–year plan aims to nurture one to two key national market players with annual sales value in excess of 100 billion yuan and 20 regional market players with annual sales value in excess of 10 billiion yuan. The development key for the sector continues to be consolidation and increasing scale and strength.
In an investment analysis and prospect report covering 2010 to 2015, an investment consultancy pointed out that the progress of medical reform remains stagnant even as the reform has passed its half-way schedule and most of the 850 billion yuan expended. The report urged the government to seriously identify areas that stalled the progress in order to right the reform’s track within the remaining schedule. （新医改方案进行大半仍浮于表面）
The media reported on the government’s report of key medical reform achievements:
China Broadcast News reported that the health insurance system is now extended to 90% of China’s population, according to the minister of health. (基本医疗保障覆盖已超90%人口)
The Economic Observer reported that the Essential Drug List has achieved an average savings of 25% to 30% on drugs, although it remains to be seen if the fiscal financing structure is sustainable. (虚高药价得到控制)
…in addition to questions and possible changes to the essential drug system:
Liao Xingbo, deputy health official of Guangzhou Province, who is an active blogger questioned whether healthcare charges have been lowered. According to an informal survey he conducted through his blog, 74% of respondents reported that “while there is an increase in the proportion of reimbursement, the out-of-pocket expenses are higher.” (医改一年半费用降了吗?)
Separately, the essential drug policy may undergo significant adjustment, according to Pharmaceutical Economics News. The report cited an unnamed source from a state-owned enterprise who indicated that the system might revert to the original proposed plan of designated production and distributions. (调查称零差率实施困难 基本药物政策面临调整) This is due to the difficulties that the government has had in implementing the “zero-margin” policy. (基本药物“零差率”多处遇阻或重回老路)
The news that a district government spent 300 million yuan to buy back 28 health institutes it sold to private investors for 75 million yuan set off an avanlache of editorial commentary. (杭州余杭区政府全资回购股份制卫生院)
Most view the experience as a pricey lesson by the district government that had abandoned its public service mission. (3亿赎回卫生院 这“学费”太贵)
Others called for an investigation and demanded transparency for the decision to buy back the institutes. (在出售与购回间思考“市场化”含义)
Another city in Jiangsu that sold off its 134 hospitals a decade ago to private investors found an alternative way to qualify for government medical reform funding. The city has established an investment management center that will manage and supervise non-public funded national healthcare assets. The city has since successfully devised a new model for private-public partnerships. (宿迁医院引国资 公私合作”办医疗之路待尝试)
Business & Initiatives
- China to be top three prescription drug market, but Merck’s Kellogg says don’t inflate emerging markets gains.
- Forbes China Rich List Focus: The Business Aftermath of H1N1
- Roche Diagnostics launches a diabetic care training program for community doctors in China
- (糖尿病管理培训：以社区为主战场), and a commentator writes that revolution in healthcare delivery (is) underway in the Asia/Pacific region.
Health & Wellness
- Ageing problem grips China… but also presents untapped business opportunities (银发经济蛋糕”为何鲜有人切?).
- Following the footsteps of multinational pharmaceutical and healthcare companies, Chinese medicine businesses are poised to enter the consumer healthcare sector (药企进军日化带来中医药新生 外资争相进入).
- A blood shortage in China prompted the Red Cross to call for blood donations.
- One commentator wrote that the shortage reflects public dissatisfaction with the professional ethics of doctors and hospitals. According to the commentator, the public is frustrated with hospitals charging high prices for blood transfusions while taking blood from the public for free (“血荒”背后的公众情绪值得重视).