As the world’s second-largest healthcare market, China spends about $575 billion a year on the sector, roughly equivalent to Sweden’s GDP. But because of China’s large population, that translates into only $420 in per capita healthcare spending, just 4% of what an average American spends. This healthcare supply shortage is exacerbated by rising demand from wealthier Chinese who seek quality care, better insurance, and diverse services.
On the regulatory side, the Chinese government continues to reform the healthcare sector by allowing doctors to work
outside the public hospital system, encouraging the privatization of hospitals, and expanding public healthcare insurance to cover private hospitals.
The significant mismatch between supply and demand, coupled with policy changes to support the sector, have incentivized private investment to flock into areas ranging from advanced pharmaceuticals and medical devices to primary care clinics, elderly care, and insurance products.
Fangsheng Pharmaceutical is primarily engaged in manufacturing cardiovascular and cerebrovascular, pediatric, gynecological, and anti-infective drugs. The firm began its international expansion in the United States in 2016 and is aiming for US Food and Drug Administration approval for some of its products.
In 2016, the company invested $10 million for 30% equity in LipoMedics Inc., a Texas-based paclitaxel maker. According to the investment agreement, LipoMedics will help Fangsheng upgrade its manufacturing plant in return for getting distribution rights in China.