Industry Overview
Total Page：16
File Type：pdf, Size：1020Kb
THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED HEREIN IS INCOMPLETE AND IS SUBJECT TO CHANGE. THIS DOCUMENT MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. INDUSTRY OVERVIEW We engaged CIC for preparing the CIC Report, an independent industry report in respect of the [REDACTED]. Except as otherwise noted, all of the data and forecasts contained in this section have been derived from the CIC Report. We believe that the sources of the information in this section and other sections of this document are appropriate sources for such information, and we have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or that any fact has been omitted that would render such information misleading. The information from official and non-official sources in this section has been independently verified by CIC, but not by us, the Joint Sponsors, the [REDACTED], the [REDACTED], the [REDACTED], any of the [REDACTED], any of their respective directors and advisers, or any other persons or parties involved in the [REDACTED]. Our Directors confirm that, after making reasonable enquiries, there is no adverse change in the market information since the date of the CIC Report that would qualify, contradict or have a material impact on the information in this Section. OVERVIEW OF HEALTHCARE INDUSTRY IN CHINA The healthcare industry is an important part of China’s national economy. China’s healthcare expenditure is significant and has been growing steadily, from RMB4,097.5 billion in 2015 to RMB7,325.3 billion in 2020, at a CAGR of 12.3%. It is expected to reach RMB17,662.4 billion in 2030, at a CAGR of 9.2% from 2020 to 2030. Total healthcare expenditure in China, 2015-2030E CAGR 2015-2020 CAGR 2020-2030E Billion RMB 12.3% 9.2% 17,662.4 16,174.4 14,811.7 13,563.8 12,421.1 11,374.6 10,416.3 9,538.8 8,735.1 7,325.3 7,999.2 6,584.1 5,912.2 5,259.8 4,097.5 4,634.5 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Growth Drivers of Healthcare Industry in China Š Aging Population. In 2020, people aged 65 years old or above accounted for 13.5% of the total population in China. The trend of an aging population is expected to continue in the coming decades. As health condition generally deteriorates with age, the elderly are more likely to suffer from chronic and critical diseases, which leads to an increasing demand for medical products and healthcare services. Š Increasing Prevalence of Chronic and Critical Disease. Chronic and critical diseases, such as cancer, are increasingly prevalent in China, especially among the younger generation. For instance, cancer incidence continues to rise, and the disease has been in the limelight given its societal and personal impact. New cases of the top ten cancers in China have increased from approximately 3.0 million in 2015 to 3.6 million in 2020. Patients, especially those with critical diseases, demand innovative therapies, such as targeted therapy, immunotherapy and cell therapy, to an increasing extent. 91 THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED HEREIN IS INCOMPLETE AND IS SUBJECT TO CHANGE. THIS DOCUMENT MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. INDUSTRY OVERVIEW Š Changing Healthcare Payment Landscape. According to the National Bureau of Statistics of China, Chinese people’s annual per capita disposable income increased from RMB21,966 in 2015 to RMB32,189 in 2020, at a CAGR of 7.9%. In the meanwhile, the Chinese government has been promoting a multi-tiered health insurance system in recent years to cover different groups of people. The national basic medical insurance guarantees affordability of treatment for most common diseases, while commercial insurance serves as a supplementary payment solution to cater to the demand for additional treatment options, typically innovative therapies and medications. The establishment of multi-tiered health insurance system and increasing disposable income have greatly improved individuals’ ability to afford healthcare products and services. In addition, as living standards improve, Chinese people are increasingly willing to pay for healthcare as they pay more attention to their health and quality of life, contributing to the growth of China’s healthcare market. Major Challenges to Healthcare Industry in China Š Inefficient Use of Healthcare Resource. Due to the lack of a mature tiered healthcare delivery system in China, a large proportion of patients prefer to visit Class III hospitals instead of primary care institutions even for a common disease, resulting in overuse of specialists and underutilization of primary care providers. According to the National Health Commission, 2,895 Class III hospitals in China accounted for only 8.2% of all hospitals but 52.6% of all patient visits in China in 2020. The inefficiency of traditional healthcare system in providing medical service results in a suboptimal experience for patients to seek quality healthcare and medication guidance. Moreover, the absence of a tiered diagnosis and treatment system associated with follow-up assessment in traditional healthcare system can also lead to an unsatisfactory results of the medical journey. Š Unmet Demand for Innovative Medical Products and Services. Chinese patients increasingly demand innovative therapies addressing their unmet needs for the treatment of life-threatening diseases and the improvement of patients’ quality of life. However, despite the reform to expedite the innovative drug R&D approval procedure implemented in recent years, the clinical trial management of innovative drugs in China still lags behind patients’ growing unmet medical needs, mainly due to the lengthy R&D and commercialization process of innovative drugs by nature. To better match Chinese physicians’ time and efforts devoted to clinical trials, pharmaceutical companies have an urgent demand to enhance their clinical trial management capabilities with the assistance from external professional service providers. Š Underdeveloped Commercial Health Payers. As of December 31, 2020, the national basic medical insurance covered 96.8% of China’s total population. It provides coverage for the broadest population on fundamental medical care. While commercial insurance is expected to play a vital role in covering critical diseases, indicating an urgent need for establishing a multi- tiered health insurance system to serve different groups of people. Medical expenses are those incurred in the prevention or treatment of injury or disease. Despite the essential role in paying for critical diseases, commercial insurance claim spending accounted for only 5.5% of the total medical expense in 2020 in China, which is significantly lower than that in developed countries. In addition, commercial insurance products in China are homogenous, failing to satisfy the diversified needs of different groups of patients at present. Health management service providers aim to improve the efficient use of healthcare resource, which are expected to play meaningful roles in creating a more accessible health system in China. Health management service helps patients find the most suitable specialists in an efficient manner with 92 THIS DOCUMENT IS IN DRAFT FORM. THE INFORMATION CONTAINED HEREIN IS INCOMPLETE AND IS SUBJECT TO CHANGE. THIS DOCUMENT MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. INDUSTRY OVERVIEW professional medical referral. In addition, professional pharmacies with pharmacist services can amplify pharmacists’ reach by delivering medication guidance, and conducting follow-up assessment outside the hospital, which helps alleviate the inadequate provision of pharmacist services inside the hospital. Site management organizations (“SMOs”) and CROs provide tailored assistance to investigators on various non-clinical works, thus to expedite the drug development and enhance the overall clinical trial compliance. Pharmaceutical companies could accelerate their R&D process by working with these professional organizations to satisfy the unmet demand for innovative therapeutics and drugs. The multi-tiered health insurance system encouraged by the Chinese government will create a diversified healthcare payment system by fostering commercial insurance to cover critical diseases, in addition to the national basic medical insurance. OVERVIEW OF SITE MANAGEMENT ORGANIZATION SERVICE IN CHINA Introduction to Site Management Organization An SMO is an organization that provides specialized service to clinical trials. As the key professional personnel of an SMO, clinical research coordinators (“CRCs”) are assigned to the clinical trial site, and work under the direction of the principal investigator (“PI”) to support the daily non-clinical works. CRCs’ typical scope of work includes assistance in and coordination for project feasibility study, project approval application, trial site launch, participant recruitment, screening, enrollment and management, drug, medical device and bio-sample management, data entry and file management, clinical trial reports submission and site closure, with the primary goal of reducing the investigator’s non-clinical workload and improving the overall efficiency and compliance of clinical trials. The market size of SMO service in China increased from RMB1.1 billion in 2015 to RMB5.3 billion in 2020 at a CAGR of 36.5% and is expected to further