Healthcare's Chinese elixir
Updated: 2013-05-10 07:34
By Cecily Liu and Zhang Chunyan (China Daily)
British healthcare companies are taking their experience and technology to China. Provided to China Daily
Hospitals and pharmaceutical firms in the UK aim to extend their expertise to China
Hospitals and companies in the healthcare industry in the United Kingdom, which has one of the most advanced healthcare systems in the world, are looking to take their experience and technologies to China as the nation's soaring urban population demands more and more in medical treatment and preventative care.
"It is important that we are out there and working on an international basis," says Alison Shutt, director of international development at Royal Free Hospital, a hospital in Britain's publicly funded National Health Service system.
The development of healthcare is one of the major focuses of the Chinese central government's Five-Year Plan (2011-15). The plan includes hefty government investment and relaxed tax policies for the healthcare industry. Overall, the government's medical spending is expected to reach 260 billion yuan ($41.4 billion; 32 billion euros) this year, up 27.1 percent from last year. As of last year, China added about 400 drugs from foreign companies and 200 traditional Chinese medicines to its list of essential drugs.
These moves have created a wealth of opportunities for foreign companies and institutions. Royal Free, for instance, is quickly seizing on the chance to not only share its technologies and know-how, but to work on research projects with Chinese hospitals.
Shutt says several members of Royal Free's senior management team visited Changzhou No 2 People's Hospital in Jiangsu province last year. The delegation, led by Shutt, consisted of the hospital's chief executive, its medical director and a number of Shutt's staff members.
"They showed us the hospital, the facilities and we had various presentations," Shutt says.
During the visit, the two hospitals signed a memorandum of understanding to create a baseline for future joint projects. Shutt says Professor Ke Songxuan, the head practitioner at Asante, an acupuncture clinic in London that provides services to Royal Free's patients, helped set up the tour through his ties with Changzhou No 2 People's Hospital.
"Now we are looking at the feasibility of some of the doctors from Changzhou to come and work here at Royal Free. We are also looking at the feasibility of some of their students coming for academic training," Shutt says.
One reason behind the UK's drive to internationalize is the need from individual hospitals in the NHS system to look for alternative sources of revenue amid cuts in government funding.
King's Fund, a think tank in the UK, predicts NHS funding for the 2014-15 financial year will experience a shortfall of 35 billion pounds ($53 billion; 40 billion euros). The forecast is based on the estimate that NHS services in 2014-15 will cost 149 billion pounds, offset by only 114 billion pounds in government funding.
Shutt says overseas expansion is one important way for Royal Free to increase revenue.
"We are in a competitive market place. We have to be looking at different revenue streams. One of these revenue streams can come internationally," she says. "We have specialties in some areas, for example, the treatment of amyloidosis (a disease involving a buildup of one form of proteins), for which Royal Free is one of the very few centers in the UK to offer treatment. Maybe the Chinese doctors can come and work alongside our doctors and see our patients and receive training."
Shutt says the two hospitals could work together on research projects, with doctors efficiently pooling resources and sharing research results. She says one benefit in working with Chinese hospitals is access to a large database from the most populous country.
Royal Free also hosted a delegation of officials and hospital representatives from Zhejiang province in April. The hospital talked the delegates through NHS' technology and procedures.
"We showed them our expertise, including in hemophilia, blood disorders, liver transplantation and cardiology. The doctors here were keen to impart their knowledge through presentations," she says.
Another British institution that has established links with China is the Royal College of General Practitioners, a professional body specializing in developing training and development programs based in London. The RCGP is currently helping the health bureau in Zhejiang province and the Shanghai Municipal Health Bureau in developing training programs in primary care.
Kenneth Garnett, director of healthcare consulting at PwC China, says UK hospitals should not see their aim of bringing services and expertise into China as simply a business venture, but as a commitment to improve healthcare in both countries.
He says the UK's goal of sharing its healthcare technology and knowledge with China will help to educate Chinese clinicians.
Kenneth Garnett, director of healthcare consulting at PwC China.
Conversely, there are many aspects of Chinese healthcare that UK clinicians could learn from their Chinese counterparts. Garnett says UK doctors could learn more about pain management using traditional Chinese medicine techniques used post-surgery. In China the combination of surgery and TCM has been shown to be effective.
Chinese hospitals also have a higher patient volume. UK doctors, he says, could see how they could apply Chinese patient management techniques to potentially reduce waiting times.
Shutt agrees. She says UK hospitals can also better understand the Chinese practice of charging for services.
"It's good that China already has a charging mechanism in place. In the UK, it is all free. Therefore there is significant pressure on (the UK's healthcare system)."
Several NHS hospitals are already generating revenue from emerging markets, such as the Middle East. Moorfields Eye Hospital opened a center in Dubai in 2007 to provide treatment services for most surgical and non-surgical eye conditions. Garnett says Moorfields' model of operations in Dubai could provide a standard for other NHS hospitals when they enter China. But he says it is best if they work with trusted Chinese partners.
"The UK hospitals should not 'transplant' into China the Middle East model or the methods of care delivered in the UK. Before entering China, they must have a clear understanding of the way treatment is delivered in China, the payment system and future government developments which may impact on their investment," he says.
In addition to UK hospitals, the country's pharmaceutical companies are also strengthening their presences in China.
According to IMS Health Inc, an international healthcare market researcher, China became the world's third-largest pharmaceutical market in 2010. It forecast the Chinese pharma market will grow to 694 billion yuan.
GlaxoSmithKline, the British pharmaceutical company, has invested more than 1 billion yuan in research and development in China over the past 20 years. The company has conducted more than 200 China-based drug development projects in collaboration with Chinese clinical research centers. It has also extended more than 50 types of medicines and vaccines to Chinese patients.
Last year, it opened a traditional Chinese medicine research unit in China and has made TCM one of the company's R&D programs in China. Zang Jingwu, senior vice-president and head of R&D for GlaxoSmithKline China, said the company's strategy is to integrate existing TCM knowledge of diseases with modern drug discovery technology and clinical trial methodology.
Another China-seeking pharma is London-based AstraZeneca, which opened a manufacturing facility in Wuxi, Jiangsu province, in 2001. The company has since carried out extensive R&D work in China, including a partnership with Peking University on therapies for obesity, diabetes and heart disease.
Last year, the company began building a $200 million (152 million euros) facility in the China Medical City of Taizhou, Jiangsu province. AstraZeneca chose Taizhou because the CMC is a high-technology development zone with strong support from the State Food and Drug Administration and other government agencies.
AstraZeneca is also training general practitioners in partnership with the China Health Promotion Foundation and the Ministry of Health with a goal to improve healthcare in rural areas.
The Chinese central government recently increased spending on public health insurance, particularly for rural residents, with the goal of insuring about 95 percent of its rural population.
"The Chinese government is providing a major investment to improve healthcare in rural communities. We want to be part of this broader market and to build a sustainable business in serving these individuals," says William Charnetski, AstraZeneca vice-president of global government affairs.
Another example is Alliance Boots, an international health and beauty group, that has its headquarters in Switzerland and support offices in the UK. It wants to expand its presence in the Chinese market, both in pharmaceutical wholesaling and retailing.
"We believe by working closely with valued Chinese partners in the future, Alliance Boots has many skills to offer to the Chinese retail pharmacy market to improve both professional and general retailing standards," an Alliance representative says.
Alliance Boots operates in China through joint ventures. Its share of revenue of the joint venture in China (to March 31, 2012) was about $1.3 billion. Its revenues in China were about 3 percent of the group's total revenue for the same period
Last year, Alliance Boots created a joint venture in Guangzhou to employ over 2,700 people. It had previously reached an agreement in 2007 to form a 50-50 joint venture with Guangzhou Pharmaceuticals Corp, one of the largest pharmaceutical wholesalers in China.
Alliance Boots is seeking a minority investor partnership with Nanjing Pharmaceutical Co Ltd. The deal requires regulatory approval.
The UK's technology and telecommunications companies are also hoping to bring their expertise into China to help streamline its healthcare system.
GE Healthcare, the medical arm of General Electric, is promoting its Internet-based medical technologies and solutions in China, such as an Internet-based long-distance imaging technology. The innovation allows doctors to offer real-time assistance and image-based diagnoses to help less experienced local physicians prepare for surgical procedures.
Alicia Greated, director of Research Councils UK in China, says medical research collaboration between the UK and China is also flourishing.
RCUK, a partnership between the UK's seven Research Councils, set up its first overseas office in China in 2007 to fund UK researchers in China. Last year, the Medical Research Council, one of RCUK's member councils, launched a stem cell research project with the National Natural Science Foundation of China. The project has allowed UK and Chinese partners to work together on stem cell research.
Another project RCUK funded is the University of Bradford's Science Bridges China, a 1.3 million pound RCUK program. It is jointly run by the RCUK, China's Ministry of Science and Technology, the Ministry of Education and the NNSF of China.
The program funds many individual efforts, such as a project by the University of Bradford and Tsinghua University to identify key ingredients in complex Chinese medicines in order to isolate ingredients and export them internationally.
"There is enormous growth in China, not just economically, but in terms of research funding and output. If China continues at the presence pace, it will become one of the world's largest producers of scientific knowledge. We want the UK to be a part of this growth." Greated says.
Contact the writers through email@example.com
(China Daily 05/10/2013 page16)