China welcomes Indian pharmaceutical companies to help address the growing demands of its domestic market in the wake of recent healthcare reforms, said Health Minister Chen Zhu on Monday.

“We know India's pharmaceutical sector, including non-generic and creative medicine, is leading the developing world. China has a huge market potential for healthcare services and medicine. We more than welcome pharmaceutical companies from countries like India to China,” Mr. Chen told reporters on the sidelines of the annual session of the National People's Congress, China's legislature.

Releasing the government’s health report for the year, Mr. Chen said the $ 123 billion healthcare reform launched last year was creating a growing demand for drugs, particularly in rural areas.

“China has 1.3 billion people and diversified medical needs,” he said.

The pharmaceutical industry was open not only to multinational drug corporations from developed countries, but also to developing countries. “Given China’s natural conditions, most of the essential drugs are for preventive and curative purposes,” he added. “They must be safe, proven effective, of high quality and also cost effective.”

Mr. Chen said the pharmaceutical sector was “quite open” to foreign players. However, the experience Indian pharmaceutical companies have had here so far suggests otherwise. Companies say they have routinely faced market access issues, and point to what they describe as long-drawn-out procedures for getting their drugs registered as another barrier to entry.

Improving market access for Indian pharmaceutical companies was among the issues Minister of Commerce and Industry Anand Sharma raised with his Chinese counterpart Chen Deming in trade talks in January.

If those issues are addressed, Indian companies will discover a domestic market expanding rapidly in the wake of a healthcare overhaul launched last March.

Health Minister Mr. Chen, is behind a radical $ 123 billion proposal to transform China’s ailing healthcare system, which, in the three decades since market reforms were launched, has increasingly excluded large sections of the country’s rural poor. The plan envisages bringing universal healthcare to 90 per cent of the population by 2011.

Part of the plan is a drug reimbursement system which includes all “essential drugs” as eligible for compensation under basic health insurance. By the end of February, the system had been launched in

1,020 of the country’s 2,859 counties, and had led to growing domestic demand for drugs, according to the Ministry of Health’s 2009 work report.

Mr. Chen, a molecular biologist by training, became only the second person in the People’s Republic of China’s six-decade history to be appointed to a ministerial position without being a member of the ruling Communist Party. He is known for being one of the few outspoken voices among the country’s usually guarded leadership, and has led the calls for a healthcare overhaul since his appointment in 2007.

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