Major investment in China’s pharmaceutical research and development (R&D) sector, along with government-initiated reforms, looks set to kick off a boom in the pharmaceutical market, according to a new report from the research and consulting firm GlobalData.

The country’s pharmaceutical market value will climb from an estimated $48 billion (€36.3 billion) last year to $315 billion in 2020, at a compound annual growth rate of 26.5 per cent, according to GlobalData’s report on China’s healthcare industry.

China is currently the third-largest market behind the US and Japan and surging demand will see China's pharmaceutical market become the second largest in the world, with growing revenue pushing the value of the industry significantly closer to that of the US, which GlobalData forecasts to reach $475 billion (€359.2 billion) in 2020.

Middle class
A big factor in boosting revenues in the sector is the expanding population and the rise of the middle class, which will make medicines more available to more Chinese people than ever before.

Also, the ageing population will boost the sector, as the country’s one-child law is expected to create a sizable elderly class – the country’s elderly population is expected to account for 19 per cent of its population of 1.41 billion in 2020. GlobalData expects to see a rising prevalence of chronic diseases, which will in turn prompt an increasing demand for treatment.

This factor will also be a primary driver behind the rising value of China’s medical device market which GlobalData forecasts will climb from $20 billion in 2012 to $54 billion in 2020. The Chinese government is investigating the drugs company GlaxoSmithKline over payments of bribes to doctors to stock their products.