Frost & Sullivan Sees Opportunities in Chinese Vaccine Industry

With the outbreak of H1N1 influenza in several countries, people are aware of the importance of vaccine.

According to Frost & Sullivan's research in the Chinese vaccine market, the Compound Annual Growth Rate (CAGR) of the pharmaceutical industry in the next seven years is expected to be around 4-5 percent, of which the CAGR of the vaccine market is predicted at 14-15 percent.

There are four key factors that keep driving the growth of the vaccine market.

Firstly, stable demand guarantees the growth of the vaccine market. The children vaccine segment will continue to be the most important part of the total vaccine market. In 2008, the number of newborns in China was 16,080,000 with a birth rate of 12.4 percent. The birth rate is expected to decrease gradually in the long run, but considering the country's current larger population base comprising young productive ladies, the number of new born babies in next five years will remain at a stable and relative high level. In this way the demand of vaccine will up keep its increasing trend.

Secondly, the public awareness for importance of vaccination is also on the rise. The recent H1N1 breakout has increased the awareness of prevention through vaccination among the public. Some pharmaceutical companies have started to promote their vaccines on television and outdoors in the form of public service advertisements, which helps to popularize the awareness of disease prevention.

Thirdly, the self-paid rate of vaccine is expected to increase. The usage rate of self-paid EPI (Expanded Programme on Immunization) vaccines is about 10-20 percent.

With the increasing healthcare expenditure of the Chinese people and the increasing awareness about vaccine features, the self-paid vaccines, which are usually of better safety profile, are expected to be used more widely and frequently.

The Chinese government is paying more attention to prevention and immunization. In 2008, the government announced the enlarged immunization program, increasing the financing from previously 218 million RMB (US$32 million) to 2.8 billion RMB.