This hasn’t been a great year to be a foreign drug maker in China, as a developing government anti-bribery crackdown has resulted in arrests and the prospect of monster fines. But assuming they can weather this storm, China is a pharmaceutical firm’s dream market, with an aging, increasingly affluent population that is falling prey to the chronic illnesses of the developed world.
A new study in the Journal of the American Medical Association estimates that about 11.6% of adults in mainland China suffer from diabetes based on a 2010 survey, for a total of 114 million—that’s up by 22 million from 2007, and means nearly one of out every three global diabetes sufferers is Chinese.
Researchers said that diabetes in China follows a different path than in developed countries like the United States, where sufferers tend to be overweight. In China, the body mass index of the average diabetic is 23.7, compared with 28.7 in America. A BMI of 25 to 29.9 is considered overweight.
“Poor nutrition in utero and in early life combined with overnutrition in later life may contribute to the accelerated epidemic of diabetes,” the study authors wrote. Asians may also be more genetically prone to diabetes than Westerners because of the way their bodies process insulin.
Those millions of Chinese diabetics already add up to a massive market for global pharmaceutical firms, including Sanofi, Merck, and Novo Nordisk, who make the top three best-selling diabetes drugs. All three firms have been enmeshed in China’s anti-bribery crackdown: Investigators seized documents from Sanofi in August, the same month they visited a Novo Nordisk production facility. And according to a report by the New York Times, Merck and Sanofi, along with Novartis and Roche, all employed the same travel agency that allegedly used fake invoices to help GlaxoSmithKline bribe doctors and hospitals to buy its products.
As the anti-bribery net widens, China’s economic planning agency is also investigating the costs and prices of foreign drug makers—especially those on an approved list that are subsidized and purchased in bulk by local governments. When the list was updated in March, Sanofi’s blockbuster Lantus long-lasting insulin treatment—the top-selling diabetes drug in the world—was added for the first time.
Now it looks like the government’s largesse with authorizing drugs comes at a price. But given the giant size of China’s diabetes problem, it still may be well worth it.