China Healthcare Industry China Healthcare Consulting Presentation Outline Market Background Regulatory Environment Industry Issues Intellectual Property Rights Growth Sectors Conclusions

China Healthcare Industry China Healthcare Consulting NOTICE from CHCC Only Selected Slides are Shown on our website Detailed Slides and Presentation can be available upon request

China Healthcare Industry China Healthcare Consulting China- the fastest growing market in the world

China Healthcare Industry China Healthcare Consulting China- Import vs Export

China Healthcare Industry China Healthcare Consulting Strong Hard Currency Reserve

China Healthcare Industry China Healthcare Consulting Increasing U.S. Direct Investment into China

China Healthcare Industry China Healthcare Consulting China Pharmaceutical Industry Output & Growth Rate ---A Large and Growing Market

China Healthcare Industry China Healthcare Consulting China Pharmaceutical Commercial Sales & Growth Rate (Billion Yuan)

China Healthcare Industry China Healthcare Consulting Rank of Drug sales in 14 major area 2001 China Company 11Shanghai Roche 23Shanghai BMS 32Dalian Pfizer 47 Merck Sharp & Dohme 56 Glaxo 68 Beijing Double-Crane pharm. 710 Sino-Swed Pharm Corp 84 North China Group 95 Sandoz 1012 Harbin Pharm. Group 1116 Novartis 129 J&J 1311 Astra-Zeneca 1417 Bayer 1534 Shandon Lu Nan Pharm.

China Healthcare Industry China Healthcare Consulting Problems in Healthcare System Lack of Stable Budget Resources Great Variability in Ability to Pay by Employers Casual Attitudes toward Medical Expenditure Incompatible with New Ownership Structure Deferred Payment Causes Resentment and Social Problems

China Healthcare Industry China Healthcare Consulting SDA Merger of 3 Former Governmental Departments Composition  Department of Drug Registration Synthetic, Biological and TCM Divisions  Department of Medical Devices Standards, Product Registration and Supervision Divisions  Department of Safety Supervision  Department of Market Compliance

China Healthcare Industry China Healthcare Consulting IPR Counterfeiting of Trademarks Lax Enforcement of Law and Protection of Local Industry WTO Accession Exempts China From Giving Immediate Patent Protection Administrative Protection (AP) is Rumoured to be Phased Out in Favour of 20-Year Patent Pre-AP Local Generics Considered Legal Requirement of Large Generic Prints on Labels

China Healthcare Industry China Healthcare Consulting WTO Challenges (1) Regulatory Environment  More in Line With International Standards  More Transparent Administration  ICH Guideline Increasingly More Relevant  Administrative Barriers to Offset WTO Requirements

China Healthcare Industry China Healthcare Consulting Biological Products Types  Biochemical, Biological and Genetically Engineered Products Science and Technology Driven Average Growth Rate 12.5% Worldwide Compared with 8% for Pharmaceuticals US$ 20 Billion in 2000 with 100+ Products

China Healthcare Industry China Healthcare Consulting OTC Market in China 700 OTC, 70 % will be registered as OTC Urbanization. Large migration from rural Sales by chain pharmacies in coastal cities increased by 45% in Foreign companies allowed to run OTC distribution

China Healthcare Industry China Healthcare Consulting TCM: Traditional Chinese Medicine TCM Source Materials Number Over 12,000 TCM Industry Produces 5,000+ TCM Preparations in Large-Scale Production TCM Sector Outperforms Average Medical Industry’s Performance Indicators Ride on the Back of Strong Worldwide Demand for Natural Medicines

China Healthcare Industry China Healthcare Consulting MORE Chinese Hospitals China’s healthcare system