China's state/market health care mix unclear

The rapid growth of China's economy (overtaking both the UK and France during 2006) has not been matched by comparable increases in health care spending, which has left a large gap for market solutions. A debate is underway as to the balance that China will aim for between government provision and intervention versus private initiative.

Brian Murray, manager of research analysis for US investment bank American International Group's Corporate R&D department, at a business roundtable organized by the China Daily newspaper, said: "the first step is developing a national system. That's the problem we're facing when we're looking at China. In terms of pharmaceutical companies, we need to know what the system is going to be before we can figure out how we can enter that market."

According to figures presented by the World Health Organization's China representative, Henk Bekedam, government funding accounted for 17% of total medical spending, with insurers covering 29% and individuals finding the remaining 54%. Another anomaly, according to the WHO, is that drugs represent 44% of China's health care spending, compared with an average of about 15% in Europe.