Unlocking China’s pharma market

Why is China important?

As a multinational pharmaceutical company, venturing into the Chinese market isn’t just an opportunity, but a necessity for several compelling reasons:

• Large and growing market: China’s significant and ageing population, estimated to be about 1.41 billion in 2021, presents a substantial market for pharmaceutical companies. By 2050, approximately 26% of China’s population, or around 366 million people, will be over 65 (Source: World Population Prospects 2022 by the United Nations). This demographic shift emphasises the growing need for healthcare and pharmaceutical products, highlighting China’s importance as a market for multinational pharmaceutical companies.
• Rapid economic growth: China’s rapidly growing economy is expected to lead global economic growth. Its GDP growth, forecasted at an average of 4.4% from 2022 to 2030, surpasses that of the US and EU. This growth suggests a significant increase in healthcare spending, enhancing access and affordability, and expanding the customer base for pharmaceuticals.
• Innovation and R&D opportunities: China is emerging as a key player in pharmaceutical R&D, with its R&D expenditure reaching 2.4% of its GDP in 2020. The government’s active encouragement of healthcare innovation offers companies opportunities to develop and test new drugs in this dynamic market.
• Government support: The Chinese government has been reforming drug approval processes, reflecting its commitment to healthcare innovation. In just the first half of 2023, 24 innovative drugs were approved for market launch, showcasing a streamlined approach to medical product review and approval.

Why is understanding China crucial?

Distinct from the familiar terrains of Europe and the US, China presents a rapidly evolving landscape, brimming with unique challenges and prospects. The market dynamics here are shaped by China’s unique business models, deeply rooted in its specific cultural and healthcare ecosystem, and demand-tailored strategies. The digital infrastructure and IT landscape are advanced, necessitating adaptation to local digital platforms and technologies. Additionally, the Chinese government plays a pivotal role in healthcare, influencing policy, regulation and public health initiatives. Understanding these aspects is crucial for successful market penetration, compliance and leveraging the substantial growth opportunities in this dynamic market.

What is PwC’s latest view?

To help companies better understand China’s transformative trends in healthcare, PwC Strategy& is pleased to share our latest insights into China’s healthcare market, blending our own rigorous analysis with observed market trends, particularly in HCP and patient engagement. This allows us to offer a unique perspective, combining our strategic expertise with real-world market dynamics. The findings are invaluable for European and US pharma companies seeking to expand their footprint, innovate and stay competitive in the Chinese pharmaceutical sector. Here are the key insights distilled:

There’s a significant transition in HCP behaviours driven by post-pandemic-related guidelines and regulations, as well as internal demands for more effective, engaging and compliant ways to continue professional development and peer interaction. This shift is shaping a new landscape for medical engagement and communication in China.

1. Hybrid engagement model: In China, healthcare professionals (HCPs) have adapted to a hybrid model of online and offline engagement, with distinct preferences for each. Offline meetings and events are favoured for in-depth discussions on topics like standardised treatments, guideline updates, clinical research and product detailing. Meanwhile, online platforms are preferred for peer-to-peer information exchange, allowing HCPs to share insights and experiences more informally and flexibly.
2. Active learning and peer engagement: Chinese HCPs are increasingly valuing active learning methods like online courses and proactive engagement, such as peer-to-peer communication and producing academic content. This behavioural shift reflects a growing preference for interactive and self-directed learning experiences in the healthcare community.
3. Embracing omni-channel approaches: Chinese HCPs are increasingly utilising integrated platforms like WeChat for information and learning. However, pharmaceutical companies risk limited access to HCP behaviour data if they over rely on these third-party platforms. This scenario presents an opportunity for leading pharmaceutical companies to consider developing more multifunctional omni-channel strategies to better understand and engage with HCPs.

The Chinese patient population is becoming more proactive and discerning in its healthcare choices, driven by technological advancements and shifting societal attitudes towards health and wellness. These changes are prompting healthcare providers and businesses to rethink and adapt their strategies to meet these emerging needs effectively.

1. Increased demand for drug accessibility: Due to value-based purchasing (VBP) policies and medication listing restrictions in hospitals in China, patients are seeking more convenient access to medications, including a broader range of options, affordability and simpler processes. In response, the national government is promoting both online and offline pharmacies, with local governments working on lifting the restrictions and optimising the drug selection system, allowing hospitals to choose medicines more reasonably, introduce innovative drugs and meet the diverse needs of patients.
2. Call for holistic disease management: There remains a substantial disparity between hospital-based medication and providing a holistic patient-centred solution. Patients require comprehensive disease management, encompassing lifestyle interventions and meaningful changes to foster overall well-being. Taking T2DM (Type 2 Diabetes Mellitus) as an example, patients are seeking more comprehensive and continuous care solutions. This includes a desire for regular monitoring, personalised treatment plans and support systems to manage their health effectively over time.
3. Rising voice from patients: By December 2022, 363 million Chinese people had embraced Online medical services. Two notable trends have emerged: a growing demand for reliable information sources in the digital age and the increasing influence of patient groups in China, empowered by Internet-driven social media. These groups are shifting from passive recipients of treatment to active voices, mirroring developments in Europe and America.

The healthcare industry in China is increasingly adopting innovative, patient-centred approaches to the 5 ‘A’s: ‘awareness’, ‘availability of prescription’, ‘accessibility’, ‘affordability’ and ‘adherence’, such as utilising social media for patient education and offering personalised digital health services. They’re also exploring novel payment methods such as performance-based agreements and subscription models to improve drug affordability. Furthermore, collaborative efforts among pharmaceutical, technology and healthcare companies are fostering advancements in treatment, patient engagement and healthcare service delivery.

How will companies prepare themselves?

Looking ahead, we suggest a multifaceted approach for healthcare stakeholders. An omni-channel strategy is crucial, blending various communication and engagement channels to meet HCPs and patients where they are. Leveraging AI and data analytics will enable personalised care and predictive health insights. Additionally, a strong emphasis is placed on collaboration – across industry borders and traditional silos – to innovate and drive meaningful change.

In this rapidly evolving era, the core of healthcare – the well-being of patients and the commitment of healthcare professionals – remains unchanged. The path forward, while intricate, offers abundant opportunities for those prepared to adapt and innovatively pursue new avenues, always with patient care as their primary focus. This perspective is particularly relevant for European and US pharmaceutical companies eyeing the Chinese market, underscoring the importance of staying agile and patient-centric in their approach.