by
Brendon Nafziger, DOTmed News Associate Editor | February 25, 2010
"McKesson has sent a lot of senior executives to understand the health system. There is opportunity. That said, if you don't understand the system, I think it would be much harder," Glorikian says.
And even with all the due diligence in the world, many local companies will still have an advantage because of their closer relationships with government officials, Glorikian says, which is why he recommends companies looking to enter China consider forming partnerships with local outfits.
"You're not in Kansas anymore," he observes. "Whenever we're there, we're always learning something."
Diagnostic Rockets
This state spending spree will also benefit numerous diagnostics sectors, including the in vitro diagnosis market, projected to grow from $1.1 billion (as of 2007) at spanking double-digit yearly rates. The report says this sector's growth is also fueled by the burgeoning middle-class willing to spend money out-of-pocket to test for diseases like hepatitis B, an infection ravaging the mainland (and whose tests have good profit margins because of lack of royalties paid).
Molecular diagnostics - tests that seek genetic clues to pathogens - also look to benefit. While the market now stands at only $100 million (as of 2007), cheaper technologies, government windfalls and population factors should spark growth. According to the report, almost 300 million women in China are at screening age for human papillomavirus, which is detected through molecular diagnostics. Point-of-care products should gain too, Scientia notes. Although a relatively modest $147 million now, this market should more than double in the next five years as a growing number of the patients will have access to the tens of thousands of new rural clinics set to be built under the Chinese stimulus plan.
Medical devices won't be left in the cold, either. According to Scientia, a startling two-thirds of conventional medical equipment in China was made in the 1980s or earlier. As Chinese get wealthier, they want access to newer, better machines.
But competition from locals in fields that aren't as advanced as CT and MR will be fierce, as domestic companies can sell products for dramatically less money. In the patient-monitoring device world, for instance, local producers like Mindray can market monitors for almost a third less than foreign OEMs, according to Scientia.
Read a report on China in the February 2010 edition of DOTmed Business News, now online.
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