Innovation in Pharmaceuticals Slackens

  The value of China's pharmaceutical market is estimated at RMB 755.6 billion in 2010, branded drugs enjoying a market share of less than 30 percent, in contrast to 50-plus percent in the developed countries. Over the past years Chinese drug makers have been losing ground under the onslaught of foreign competition. A recent report by the Chinese Association of Enterprises with Foreign Investment (CAEFI) reveals that American companies control 64 percent of China's pharmaceutical market, and that China's ten largest players combined account for no more than a five-percent share. Insiders cite several reasons for the worrying scenario facing the sector, including inadequate R & D investment by pharmaceutical enterprises, a research environment in which academic merit is measured by dissertations published rather than by market-viable products created, and a lack of rational coordination and effective incentives from the government.