According to the hospital drug purchase audit of the Chinese Pharmaceutical Association (CPA), the total drug purchase by Chinese hospitals in 2006 rose 4.60% in volume and 9.78% in value.
Major regional markets
The 16 major Chinese regional markets monitored by CPA were again led by Beijing, Shanghai and Guangzhou in 2006, and together they accounted for 59.0% by volume and 53.2% by value of the total 16 regional markets combined. The following table illustrates the shares of the 16 Chinese regional markets in 2006:
Shares of 16 major Chinese regional markets in 2006
|
Province/City |
Share by Value (%) |
Share by Volume (%) |
|
Beijing |
22.9 |
24.7 |
|
Shanghai |
17.5 |
19.7 |
|
Guangzhou |
12.8 |
14.6 |
|
Hangzhou |
6.7 |
5.5 |
|
Hubei Province |
5.3 |
4.2 |
|
Chengdu |
4.5 |
5.7 |
|
Nanjing |
4.2 |
4.1 |
|
Hunan Province |
4.2 |
3.7 |
|
Chongqing |
4.2 |
3.9 |
|
Jinan |
3.6 |
3.8 |
|
Tianjin |
3.1 |
2.2 |
|
Harbin |
3.0 |
1.7 |
|
Shenyang |
2.8 |
1.8 |
|
Zhengzhou |
2.2 |
2.2 |
|
XiAn |
1.6 |
1.2 |
|
Shijiazhuang |
1.4 |
1.0 |
|
Total |
100.0 |
100.0 |
Source: CPA
Hospital sales of foreign companies
Hospital drug sales by foreign companies rose considerably in the past two years, according to CPA data. The growth of foreign product sales was much higher than the average hospital market growth in the period.
Sales of foreign company drug products was 38.4% and 54.6% higher in volume and value respectively in the third quarter of 2006 compared with the first quarter of 2005.
CPA data suggests that the share of foreign companies in the 16 Chinese regional hospital markets was around 8.0% by volume and 18.0% by value. The data also suggests a higher concentration of foreign company sales in larger cities.
The following table demonstrates the regional market shares of foreign drug product sales in 2006:
Regional market shares for foreign drug products in 2006
|
Province/City |
Share by Value (%) |
Share by Volume (%) |
|
Beijing |
25.7 |
23.9 |
|
Shanghai |
19.0 |
22.0 |
|
Guangzhou |
16.2 |
17.8 |
|
Hangzhou |
7.6 |
6.5 |
|
Hubei Province |
4.6 |
5.2 |
|
Chengdu |
4.0 |
3.1 |
|
Hunan Province |
3.6 |
4.4 |
|
Chongqing |
3.1 |
2.7 |
|
Tianjin |
3.0 |
1.8 |
|
Nanjing |
2.9 |
2.3 |
|
Jinan |
2.9 |
3.3 |
|
Harbin |
2.7 |
2.7 |
|
Shenyang |
1.9 |
1.4 |
|
Zhengzhou |
1.2 |
1.4 |
|
Shijiazhuang |
0.9 |
0.6 |
|
XiAn |
0.8 |
0.9 |
|
Total |
100.0 |
100.0 |
Source: CPA
Hospital sales of joint venture companies
The growth of hospital drug sales by Sino-foreign joint venture companies was much slower than that for foreign companies in the past two years.
Compared with the first quarter of 2005, sales of joint venture drug products in the third quarter of 2006 grew 15.9% in volume and 19.0% in value.
The market share of joint venture companies in the 16 Chinese regional hospital markets combined was 12.5% by volume and 17.0% by value. The data also suggests a higher concentration of joint venture company sales in larger cities.
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The following table demonstrates the regional market shares of joint venture-made drug products in 2006:
Regional market shares for JV-made drug products in 2006
|
Province/City |
Share by Value (%) |
Share by Volume (%) |
|
Beijing |
23.6 |
26.1 |
|
Shanghai |
22.4 |
23.7 |
|
Guangzhou |
12.5 |
11.5 |
|
Hangzhou |
6.2 |
6.4 |
|
Hubei Province |
4.8 |
4.4 |
|
Chengdu |
4.7 |
5.1 |
|
Hunan Province |
4.2 |
4.6 |
|
Jinan |
3.6 |
3.8 |
|
Nanjing |
3.2 |
2.4 |
|
Chongqing |
3.1 |
2.8 |
|
Tianjin |
2.8 |
2.1 |
|
Harbin |
2.5 |
2.8 |
|
Shenyang |
2.0 |
0.9 |
|
Zhengzhou |
1.8 |
1.9 |
|
XiAn |
1.4 |
0.9 |
|
Shijiazhuang |
1.2 |
0.7 |
|
Total |
100.0 |
100.0 |
Source: CPA
Hospital sales of local companies
Hospital drug sales by local companies rose slower than average hospital market growth in the past two years, according to the CPA. Compared with the first quarter of 2005, sales of local drug products in the third quarter of 2006 grew only 13.8% in volume and 27.4% in value.
According to CPA data, local companies represented 79.5% by volume and 65.0% by value of the total 16 regional Chinese hospital markets combined in 2006.
The regional market shares of local drug products in 2006 are shown in the following table:
Regional market shares for local drug products in 2006
|
Province/City |
Share by Value (%) |
Share by Volume (%) |
|
Beijing |
22.0 |
24.6 |
|
Shanghai |
15.9 |
18.8 |
|
Guangzhou |
12.0 |
14.7 |
|
Hangzhou |
6.5 |
5.2 |
|
Hubei Province |
5.7 |
4.1 |
|
Chengdu |
4.9 |
3.9 |
|
Nanjing |
4.6 |
5.9 |
|
Hunan Province |
4.9 |
4.4 |
|
Chongqing |
4.4 |
4.2 |
|
Tianjin |
3.8 |
3.9 |
|
Jinan |
3.5 |
1.9 |
|
Harbin |
3.1 |
2.2 |
|
Shenyang |
2.7 |
1.7 |
|
Zhengzhou |
2.6 |
2.4 |
|
XiAn |
1.8 |
1.2 |
|
Shijiazhuang |
1.6 |
1.0 |
|
Total |
100.0 |
100.0 |
Source: CPA
General market assessments
Despite government’s intensive cost containment measures and regulatory corrections, the Chinese hospital drug market continued to grow in both volume and value in the past two years for all players, namely the foreign companies, joint ventures and local companies.
However, the growth of foreign company drug products in the period was significantly higher than those of joint venture and local products, indicating less government policy impacts on foreign companies.
Local experts believe the sharp growth trend of foreign drug products is likely to continue in 2007, resulting in further market share losses, especially in larger cities, on the part of local companies.
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