Healthcare & Lifescience Talking Points | 07/03/2017

In today’s talking points: Bird flu risk continued but low in China; China in need of private health sector reform; Australian company Cochlear outbid by foreign investors; China Updates List of Drugs Eligible for Insurance Reimbursement

Bird flu risk continued but low in China

Despite a surge in cases across China, the World Health Organisation has said that the risk of sustained bird flu transmission in China is low. Since October 2016, 460 cases have been confirmed, a figure that accounts for more than a third of all cases since 2013. According to Wenqing Zhang, head of the WHO’s global influenza program, the constantly changing nature of influenza viruses make them a consistent challenge to global health. While this surge is concerning, she said that with constant monitoring and vigilance, the situation doesn’t present a risk to public health more broadly.

Read more at Reuters

China in need of private health sector reform 

Though China’s aging population and impacts of the environment on health have created a need for reform of the countries public health care system, an optimistic approach to this problem is to consider opportunities to reform the private hospital sector. Last year there was a 6 per cent increase in new private hospitals, with almost 2000 opened. This added to the 160,000 private hospitals in China, making up more than half of the ratio of hospitals generally. But China’s health care system still struggles under the weight of its population regardless of the staggering number of hospitals available. Additionally, an aging population increases the need for specialized care for more permanent illnesses. The worsening pollution has also placed increase pressure on demand for health care services, and the sector seems to face an ongoing structural undersupply. Analysis sees an area of opportunity for the private health care sector in China to meet this demand and hopefully improve the situation for Chinese.

Read more at South China Morning Post

Australian company Cochlear outbid by foreign investors

Hearing implant company Cochlear failed to impress, with all of the $37 million Chinese government tender for the company going to non-Australian investors. Data from the Ministry of Finance showed the tender was split between Advanced Bionics of the US, Med-El of Austria and Chinese upstart Nurotron. China has been Cochlear’s fastest growing market in recent years, but competition is mounting specifically from Nurotron. The new company beat Cochlear in tender last year but did not have production capacity for complete the order, and it was reverted back to the Australian company. Speculation that Nurotron will have an advantage with a lower-wage value in such a highly labor intensive process is growing, and Cochlear will need to stay on its toes to ensure it isn’t boxed out of it’s own market.

Read more at Financial Review

China Updates List of Drugs Eligible for Insurance Reimbursement

Beijing recently published a new edition of a catalog of drugs eligible for reimbursement under government-backed insurance plans. according to a statement on the Ministry of Human Resources and Social Security of the People’s Republic of China website, this new catalog lists 2,535 drugs. Among the drugs in the updated catalog, 1,297 are Western and the other 1,238 are Chinese. There are four components in the 2017 catalog: drugs from the previous index, Western medicines, Chinese processed medicines and Chinese unprocessed medicines. This is big news for the industry, and could affect a lot of pharmaceutical company stocks, since if the company isn’t on the list, you couldn’t get reimbursed. Some pharmaceutical companies’ shares benefit from having new drugs included on the list, and they finished broadly higher on optimism.

Read more at Caixin