Chinese Hospital Pharmaceutical Market Expanded Over RMB 734 Billion
According to CPA-McKinsey China Hospital Pharmaceuticals Report：An In-depth Perspective, China’s overall hospital pharmaceutical market doubled from 2011 to 2016 to RMB 734 billion at a CAGR of about 15%, with growth rate dropped to 11% in 2016 and continuously slowing down.
From the view of hospital classes, Class III hospitals still comprise 67%, the largest share in pharmaceutical market in 2016 with market scale of 490 billion Yuan, and growth in this segment outpaces that of other segments. Class II hospitals represent 29% of the market, 211 billion Yuan, while Class I hospitals represent 4%, 33 billion Yuan.
From the perspective of city tiers, tier 2 and 3 cities account for the largest share of sales in China’s hospital pharmaceutical market. Tier 2 and 3 cities represent 60% of total sales and grew at 16%, faster than Tier 1 cities at 10%.
Tier 1 cities grew slowest compared to the rest of the market. Their value share shrank by 3% between 2011 and 2016, 79 RMB billion in 2016. Tier 3 cities grew fastest at a CAGR of approximately 17%, with market value more than doubling between 2011 to 2016, 19.6 RMB billion, potentially driven by the tiered diagnosis and treatment. This also highlights an opportunity for market expansion.