China is expected to become the world’s second-largest pharmaceutical market in 2015 due to macro-developments including socio-economic changes and a modernized health care infrastructure. However, the top 10 Western drug companies in the market each have only a single-digit market share. Domestic drug companies number more than 5,000 and are primarily focused on generics manufacturing and the manufacturing of active pharmaceutical ingredients (API). A count in August 2010 put the number of API producers at 1,200. The country also boasts over 700 companies in the biological and biochemical markets. Five Chinese biotech companies have gone public this year. China’s drug makers also include biosimilar manufacturers and makers of traditional Chinese medicine. The country’s outsourcing services sector grew around 23% in 2010 and is now valued at $2.05 billion. China’s CRO market is expected is grow 33%. However, the country’s updated GMP regulations, which took effect in March with a five-year grace period, are expected to result in the closure of 500 drug makers due to compliance cost.

Source: KPMG