SOURCE: MarketResearch.com

MarketResearch.com

October 03, 2011 10:08 ET

China to Become the World's Third-Largest Pharmaceutical Market by 2013

ROCKVILLE, MD--(Marketwire - Oct 3, 2011) - MarketResearch.com has announced the addition of the new report "Emerging Pharmaceutical Market in China - Forecast to Become The World's Third-Largest Pharmaceutical Market By 2013," to their collection of Country Overviews market reports. For more information, visit http://www.marketresearch.com/GBI-Research-v3759/Emerging-Pharmaceutical-China-Forecast-Largest-6564799/

The US and Europe dominate the contract research organization market and account for the majority of clinical research activities. However, this trend is changing with the emergence of regions such as Central and Eastern Europe, Latin America, India and China as preferred locations for outsourcing. China provides access to a large patient population, good infrastructural facilities and a large pool of healthcare professionals. China is also more cost-effective, with comparable quality standards to developed regions such as the US and Europe. In addition, China has aligned its clinical research regulations with international standards and requirements, which allows it to conduct clinical trials and research on behalf of pharmaceutical companies in developed countries. As a result, pharmaceutical and biotechnology companies will have good reasons to increasingly outsource clinical trials to China in order to benefit from the cost, time and expertise advantages and also to leverage emerging countries' compliance with international standards such as the Good Laboratory Practices (GLP) and Good Clinical Practices (GCP).

With the new healthcare reform, China will have the fastest growing pharmaceutical market in the world, growing at the rate of 20% per year. By 2013, China's pharmaceutical industry market size is predicted to grow from the ninth largest in the world to the third largest in terms of value. The market size for Chinese pharmaceuticals in 2009 was $46.2 billion and the industry is expected to grow at a 12.5% compound annual growth rate (CAGR) during the period 2009-2014.

Foreign companies are strengthening their research and development (R&D) capabilities in China by taking advantage of the healthcare reform and the availability of cheap labor and manufacturing facilities in the country. For example, Novartis is investing close to $1 billion into expanding its Shanghai laboratories. The French drug company Sanofi-aventis and the British drug companies GlaxoSmithKline and AstraZeneca are also planning to invest in the Chinese pharmaceutical sector.

The Chinese government has encouraged foreign investment in the R&D activities of the drug development. To achieve this, the government is providing tax incentives for R&D activities in the form of business tax exemption on the technology development and technology transfer, and the deduction of R&D expenses by up to 150% in the development of new technologies or products. In addition, the reduction of the corporate income tax (CIT) rate of 15% for high and new technology enterprises (HNTE), tax exemption for three years if the HNTE is established in Shenzhen, Zhuhai, Shantou, Xia'men, the Hainan Special Economic Zone and the Shanghai Pudong New Area, and duty free imports of capital equipment or value added tax (VAT) refund on the locally purchased equipment used for R&D activities.

For more information, visit http://www.marketresearch.com/GBI-Research-v3759/Emerging-Pharmaceutical-China-Forecast-Largest-6564799/

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