The life science industry in China and the related capital market have grown fast in the past 40 years.
According to the latest research by McKinsey & Co, China’s healthcare market is projected to grow at an unprecedented compound annual growth rate (CAGR) of approximately 12%, reaching $1 trillion by 2020, up from $357 billion in 2011.
China has already become the world’s second-largest medical device and pharmaceutical markets. However, this rapid growth has not kept up with strong demand driven by an increasingly aging population and a growth in the number of affluent consumers who seek better quality medical services.
Two major forces continue to drive China’s healthcare environment for the foreseeable future. It is common knowledge that the aging population (over 60) is expected to peak from the current 17.5 percent to 35 percent by 2050 – a number larger than the entire US population today.
The other key factor is the dramatic shift in the type of health conditions that are becoming prevalent. China reached a tipping point this year as chronic conditions have overtaken infectious diseases as the leading cause of death. The shift to chronic conditions is substantial and shows no signs of slowing down. Examples include pancreatic cancer which has jumped from 57th spot in 1990 to number 24 in just 27 years. Alzheimer’s jumped from number 28 to the 8th spot during the same period, according to the Chinese Centre for Disease Control.
Some of these forces combined with other facts such as improvements in infrastructure, the broadening of insurance coverage and significant support for innovation will have positive implications for multinational companies in particular.