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Jun 1, 2009 (Vol. 29, No. 11)

China Increases Healthcare Investment

Government Largesse Opens up Opportunities for Domestic and Multinational Companies

  • Market-Oriented Reform

    Click Image To Enlarge +
    Table 1. National Immunization Program (NIP) Coverage*

    Though still heavily regulated, China’s vaccine industry has also been through market-based reforms in recent years. In June 2005, China’s “Guidance on Vaccine Distribution and Immunization” came into effect, which permits vaccine makers and distributors to directly sell vaccines not covered by NIP to the CDC, other vaccine distributors, and vaccine-consuming organizations. The new regulation breaks the CDCs monopoly and increased vaccine sales channels from 54 provincial CDC centers to over 5,700 sales terminals. While seen as good news to both domestic and MNC vaccine makers, it also increases competition.

    The gradual market-oriented reforms also benefit MNCs that are mostly engaged in secondary vaccines. With better technology, wider sales networks, and brand image, they appeal to more affluent parents seeking comprehensive immunization for their children.

    In 2008, sanofi-aventis finished first-stage construction of its flu vaccine production base in Shenzhen—a $94 million project that the firm said would produce 25 million flu shots annually for the domestic market.

  • Click Image To Enlarge +
    Table 2. Domestic Vaccine Products
  • Government Commitment

    While economic reform and an open-door policy have brought decades of rapid growth, international travel has made disease control a more daunting task for  Chinese authorities. This was made clear by the recent outbreaks of SARS and bird flu. In the more affluent coastal areas, keeping dogs as pets is also becoming trendy, which means greater demand for rabies vaccines. These factors are among the trends influencing the government’s strong commitment to vaccine development.

    In 2008, NIP coverage was expanded to include four additional vaccines, bringing  the list of infectious diseases being immunized against to 15. The government’s commitment is energizing domestic producers, which see growth opportunity in NIP-covered vaccines.

    While the central government has expanded NIP coverage, some municipal authorities have also started to make moves to reimburse these secondary vaccines. For example, the Beijing municipal government has subsidized flu vaccines to Beijing residents since 2007, providing free immunization to over 1.85 million children.


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