Biotech Values

[jq1234]

The salient point in this thread is that Chinese reimbursement for prescription drugs is, on the whole, quite good.

I just don't agree the reimbursement is quite good in China.

If it were not, Big Pharma would not be spending hundreds of millions of dollars to build out their sales and marketing infrastructures throughout China, including the interior portions of the country.

They are spending now to capture the change/reform and expected expansion of healthcare system that had been neglected for years. China's current expenditure on healthcare as percentage of GDP (less than 6%) is in the bottom half among all countries in the world.

In short, China’s contribution to the top and bottom lines of multinational drug companies is not something that will become consequential to investors in five or ten years; rather, it is something that is consequential to investors right now and is becoming more so with each passing day.

It doesn't have to be 5-10 years to get payoff. The payoff will be gradual. If they can get on the formulary, they'll get some payoff due to the size of China. The size of contribution to top and bottom line for most will be small, but growth rate will be very high. For example, Bayer has done quite well in China due to head start.