Context for this report

The CPA-McKinsey report is published by a joint research team established by the Science and Technology Development Center of the Chinese Pharmaceutical Association (DCSTCPA) and McKinsey & Company, to generate insights on China’s hospital pharmaceutical market.

The joint effort between DCSTCPA and McKinsey builds on the unique and distinctive strengths of both organizations. DCSTCPA boasts the most thorough and high quality hospital pharmaceutical data available, while McKinsey combines proprietary data with a rigorous analytical approach. Through this collaboration, we aim to create high quality reports focusing on the dynamics of the hospital pharmaceutical market in China.

This is the fifth report generated through this joint effort, focusing on 2016 pharmaceutical market overview and deep dive on the innovative drugs market.



China’s overall hospital pharmaceutical market doubled from 2011 to 2016 to RMB 734 billion, with growth rate slowed down to 11% in 2016. Class III hospitals enjoyed a higher growth with 17% CAGR from 2011 to 2016, compared to 11% for the rest of the market. Tier 2 and 3 cities represent 60% of total sales and grew at 16%, faster than Tier 1 cities at 10% (Exhibit 1).


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The 24 innovative drugs launched in China between 2010 and 2012 outpaced the overall pharma market, growing at 27% p.a.from 2013 to 2016, and reached 4.4 billion RMB annual revenue by 2016 in sample hospitals. Additionally, the innovative drug market is heavily concentrated in Class III hospitals (95%+) and Tier 1/2cities (95%+) (Exhibit 2).


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Penetration in top hospitals is critical to the innovative drugs: Within 688 CPA sample hospitals, the innovative drug sales are highly concentrated in the largest 162 hospitals in tier 1 and tier 2 cities, especially for specialty care drugs (Exhibit 3).


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Hospital listing is a critical factor for successful launch: “Leading launches” have achieved much faster hospital listing penetration as compared to “other launches” across city tiers. Hospital listing for primary care drugs significantly outpaced specialty care drugs across city tier (Exhibit 4).


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Clinical trials participation accelerate adoption of new therapy: Significantly better post launch performance of new drugs was observed in hospitals that were clinical trial sites during the registration process, indicating that the physician participation in trials has boosted their confidence in adopting the new therapy post launch (Exhibit 5).



About the author(s)

Franck Le Deu is a Senior Partner  in the Hong Kong Office, Gaobo Zhou is a Partner in the Hong Kong Office, Tina Hou is an Associate  Partner in the Shanghai office, Mengwei Xin and Charlie Chen are Engagement  Managers in the Shanghai office, David Lu is an Associate in the Shanghai  office, David Xuan is a Research Analyst in the Shanghai office and Felix Fu  is a Senior Research Analyst in the Shanghai office.

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