Minister for Health and Prevention visited China. By Thomas Højlund Christensen, Commercial Counsellor (Export and Health), Royal Danish Embassy, China.

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From December 8 to 12, 2008, Denmark’s Minister of Health and Prevention Jakob Axel Nielsen visited China. This visit to China was the first of its kind by a Danish Health Minister in eight years and was motivated by the Minister’s wish to understand the Chinese healthcare system and to support the activities of Danish companies in China.

Meetings
The minister met with his counterpart, the Chinese Health Minister Chen Zhu. The meeting was very positive, and it was agreed that a memorandum of understanding between the two ministries is to be signed in 2009.

The Minister also met with the highest official in the State Food and Drug Administration, SFDA, the Chinese equivalent of the Danish Medicines Agency. This meeting too proved very fruitful, and there are currently plans for a high-level SFDA visit to Denmark in June 2009. The visit’s agenda is expected to include a similar signing of a memorandum of understanding.

Seminars
The Minister participated in seminars presenting the Danish healthcare model, this being part of the government’s public diplomacy efforts. The seminars took place in Beijing and focused on health insurance and regulatory issues. Among the speakers were Svend Særkjær of the Ministry of Health and Prevention, Per Helboe of the Danish Medicines Agency and Professor Kjeld Møller Pedersen of the University of Southern Denmark. A number of high-ranking Chinese officials joined the seminars, representing the Ministry of Health, SFDA, the National Development and Reform Commission, NDRC (in charge of pricing), and the Ministry of Human Resources and Social Security, MHRSS (responsible for urban health insurance). Danish pharmaceutical and medical device companies joined the seminars and the subsequent dinners that took place at the Ambassador’s residence. The dinners in particular were important in opening up for informal discussions and networking. 

Business Involvement
Danish companies played an important role in the visit. Typically, Danish ministers are accompanied by a business delegation when travelling abroad. Reflecting the already existing deep commitment of Danish healthcare companies to the Chinese market, it was decided that it would be more useful to organise some tailor-made events reflecting the needs of individual affiliates. Several companies decided to send people from their HQs in Denmark to join the visit, but the local affiliates where the embassy’s main partners in the preparation and implementation of the visit, and a number of planning meetings were thus held with them in Beijing.

In Denmark, Danish-Chinese Business Forum played a crucial role in the preparations. Danish-Chinese Business Forum organised two planning meetings for its members and was actively involved in shaping the content of the visit. The positive collaboration between the embassy and Danish-Chinese Business Forum will continue in the coming months.

Another important element of the visit were lunches, held both in Beijing and Shanghai for key opinion leaders presenting significant interest to Danish pharmaceutical companies. The homes of the Ambassador and the Consul General were used as venues. The Minister and Kjeld Møller Pedersen both held speeches during the lunches. The Danish missions in China are planning more of such events in 2009 for individual Danish companies.

The Minister also participated in certain activities together with some individual companies, such as the opening of LEO Pharma’s Chinese affiliate, the inauguration of the Lundbeck Institute in China, a visit to Tongren Hospital in order to learn more about its collaboration with ALK-Abelló and an event with Ferrosan. The Minister met with Wuxi AppTec, one of the most successful CRO (contract research organisation) companies in China. The Innovation Centre in Shanghai will in 2009 continue to introduce Chinese CROs to Danish companies, demonstrating their ability to offer high-quality yet low-cost laboratory and manufacturing services.

Growth in Chinese Health Spending
The above mentioned commitment to the Chinese market among Danish healthcare companies is reflective of the fact that China is the fastest growing healthcare market among large countries. On average, the growth has been double-digit for a number of years, and several companies have secured growth of 20 percent or more, sometimes based upon an already substantial turnover in China.

This is largely due to the growing economy and a broader access to medication. Another driving factor is the demographic structure that is similar to that in Western Europe and North America. As a result, all the chronic diseases known in the West already exist or are going to appear in China in the next ten to twenty years. Urbanization and western diets will contribute to that

IMS, a provider of market intelligence for the pharmaceutical and healthcare industries, has thus estimated that by 2010, China will be the world's seventh largest market for pharmaceuticals. Within other segments of the healthcare industry, China is expected to be ranked roughly the same. For several years now, there have been discussions in Chinese ministries and the leading universities in Beijing about how to reform the healthcare system. A draft reform paper was released in October, and in January 2009 it was announced that 123 billion US dollars will be allocated to improving the healthcare system. The amount was initially to be spent over 10 years, but it has now been decided that it will take place over the period of the next 3 years. Such moves are one important reason why Danish healthcare companies are still bullish about the Chinese market, according to a recent survey conducted by the embassy. This will no doubt help push China further up on the list of the world’s largest healthcare markets.

But China is not only a land of opportunities – it is also fraught with complex challenges. The government is in the process of building a cost-effective and more equitable health care system. As in many other countries, this has led to tendering systems in which potential suppliers bid competitively to provide products, and where mandatory price cuts continue to put pressure on the margins of many healthcare companies. In order for Danish companies and their products to be visible in China, it is vital to build up relationships, also with government officials. This is one reason why the embassy continues to organise events together with officials in both Beijing and in the provinces.

The regulatory system in China is often considered a challenge by Danish healthcare companies. A survey sponsored by the EU has similarly found that Western companies find the Chinese system the most complex in the world, second only to the Japanese one.

As a result, the embassy has taken an unusual step, having offered Danish healthcare companies the possibility of handling the entire registration of healthcare products in China. This is done in a partnership with a Chinese consultant and has proved to be a popular service.

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