China OTC market study looks at opportunities and risks

Multinational marketers of over-the-counter drugs are eyeing China's booming market, but hesitate to move in, mindful of the risks and complexity involved. New Jersey, USA-based international business consulting and market research firm Kline & Company believes that China is "poised to lead the OTC market" but warns that the Chinese market is "extremely fragmented, with thousands of local OTC suppliers vying for consumers' attention," according to Laura Mahecha, health care industry manager for Kline's research division. The enduring popularity of Chinese traditional medicine limits opportunities for western OTC products and intellectual property rights are uncertain, despite efforts by the government in recent years to implement World Trade Organization standards.

Against these risks, Ms Mahecha says: "the Chinese government has removed OTC drugs from reimbursement lists. This encourages competition and allows the drugmakers to see what the market will bear in terms of pricing. We're beginning to see promotion and brand building in China like we do in western countries."

Kline's Shanghai office is carrying out research for two studies: Nonprescription drugs China 2006 and Competitive intelligence in emerging OTC markets: China. Information about either report can be obtained from laura_mahecha@klinegroup.com.