The soaring growth of China’s pharmaceutical industry is expected to show something of a slowdown in second-half 2008, according to new estimates.

In the first six months of the year, the majority of China’s publicly-listed drugmakers reported revenues up over 20% and net profits more than 40% higher than in first-half 2007, according to WiCON International Group. Demand for Chinese-made drugs is expected to continue growing fast in the second six months, during which time the sector is also set to benefit from new government policies aimed at boosting the industry and controlling inflation, it says.

Nevertheless, growth during the period will be held back by uncertainties related to the new national health care reform plan and its implementation, higher prices for raw materials and energy and an increase in investment and operational costs resulting from the country’s new environmental regulations.

WiCON estimates that in 2007 the Chinese pharmaceutical market - including western, traditional Chinese, biopharmaceutical and herbal medicines - was worth $50 billion, at ex-manufacturer prices, while the South Medicine Economic Institute (SMEI) has put the market’s value for the year, at retail level, at close to $60 billion.

Fast domestic market growth forecast

According to IMS Health, the Chinese pharmaceutical market is the world’s ninth largest, and it will rise to second place in the world league table by 2020, behind the USA and with a value of $220 billion. A recent report from Research and Markets forecasts that the market will show growth of 20% in the year to May 2009 and average an annual increase of 15% over the following five years, to reach a total value of $74.9 billion for domestic sales of patented, generic and over-the-counter drugs in 2012.

Research and Markets also notes that the value of Chinese pharmaceutical exports grew 28.2% in 2007 to $11.69 billion, while imports rose 32.3% to $9.37 billion, resulting in a positive trade balance of $5.62 billion. “Over the next five years, we are expecting both indicators to continue their upward trajectory as internal consumption of foreign medicine increases and demand for Chinese-made drugs grows abroad,” with the value of exports and imports set to reach $39.66 billion and $30.33 billion, respectively, in 2012, it says.