Major regulatory changes at the China Food and Drug Administration to modernize drug approvals led to more than 35 major new launches in 2017 (versus only five in 2016), most from multinational companies (MNCs). This higher rate will continue. And more than 300 drugs were added to the National Reimbursement Drug List. More drugs in the market, more drugs reimbursed, more patient access through online services, and more funding from billions of dollars of private-equity and venture-capital funding supplemented by true innovation by Chinese companies.
In biotech, Chinese companies have more than 800 molecules in the development pipeline and are aggressively licensing in and out of China. They also invested billions of dollars for the first time in outbound M&A—not just in biopharma but also in healthcare services and med tech start-ups.
China’s tech and finance leaders, such as Baidu, Ping An, and Tencent, are launching AI and big data–based innovations, working with local government and hospitals to create better patient outcomes. MNCs are also able to play a leading role. Bristol-Myers Squibb, for example, launched China’s first outcomes-based insurance program for hepatitis C patients in partnership with Shanghai Pharma and Huatai. The era of pushing drugs through sales agents to doctors to be massively marked up by hospitals for sales to patients is ending.
Orr, Gordon: What can we expect in China in 2018? McKinsey, December 2017 | Gordon Orr