China’s Health Reform Creates Openings for U.S. Companies

April 30, 2008

China’s efforts to reform its health care system provide a major opportunity for American companies to enter the Chinese market, according to a top U.S. commerce official.

As China looks toward revamping a health care system that currently has hundreds of millions of uninsured citizens, American businesses have the chance to be involved through selling medicine, health services, and health insurance, Undersecretary of Commerce Christopher Padilla told reporters in Beijing.

“We see in China’s health care reforms something that’s not only good for Chinese citizens, but something that is a tremendous opportunity for U.S. companies to expand their business in China,” he said.

At the same time, he noted that China’s attempts to regulate its health care industry remain inadequate, citing the case of heparin, a blood thinner linked to the deaths of 19 people in the U.S.

The Chinese manufacturer of the medication was not regulated by the State Food and Drug Agency as a producer of pharmaceuticals because it was registered as a bulk chemical supplier instead, he said.

“This is a loophole that needs to be closed,” he said.

Padilla noted that China spent $9 billion on health care in 2007, and that figure is expected to increase to $12 billion this year.

He said there has been an “explosion” in the growth of pharmaceutical exports to China — about 300 percent since 2003. Medical devices, which include everything from orthopedic braces to pacemakers, saw 20 percent growth in the past year alone, he said.

But he said also cautioned that barriers remain for American companies coming into China, such as prohibitive tariffs on pharmaceuticals and medical devices, lengthy times to register products, and redundant testing for medical products.

Padilla led a delegation of 15 major U.S. health companies representing pharmaceuticals, medical devices, health insurance, and health services to talk with Chinese officials about their health care reform process. Companies included Aetna, Boston Scientific, Johnson & Johnson, and Pfizer.

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