1、China Life Sciences&Health Care TeamMarch 2024China LSHC Industry Survey China LSHC Industry Survey 2024 State of Industry in China2China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Content Framework Results Questions&Deep-diveChina LSHC Busines

2、s Outlook&ConsiderationsRegulatory and Digital RevolutionNew Business Opportunities&Challenges Concluding insights Appendix3China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Note:SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint V

3、enture;WOFE Wholly Owned Foreign EnterpriseChina LSHC Industry 2024 Outlook Survey Framework Survey period:15 January 2024 to 9 February 2024Engaged China-based Life Sciences&Health Care(LSHC)sector operators and investors:124 respondents 25%18%19%38%5%39%18%39%Company TypeSOEPOEJVWOFELess than RMB

4、100 millionRMB 100 million to 1 billionRMB 1 billion to 5 billionMore than RMB 5 billion2023 Revenue Size66%19%15%Less than 5,0005,000 to 10,000More than 10,000No.of Employees19%46%35%Chairman/CEOC-suite LevelOther Management LevelManagement Level69%20%8%1%2%Industry SectorPharmaMedical DevicesHealt

5、hcare ServicesDistributor/RetailerOthersSlightly more domestic companies,as POE&SOE this year are 44%,in 2023 just 35%Similar size respondents with 42 having 5k employees,in 2023 there were 50 respondentsVery consistent from 2023Aligned with size,larger companies with revenues 1B are 71 companies,in

6、 2023 that segment totaled 75Very consistent from 20234China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.China LSHC Business Outlook&Considerations5China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitt

7、e China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise;there are a few responses are unknown for the 2022 survey therefore the total sum of 2022 percentage may not be 100%#1.H

8、ow did your company perform(top line)in 2023FY?Overall Business Outlook&ConsiderationsKey Insights31%29%40%13%41%46%32%47%18%Annual financial performance isbetter than plannedAnnual financial performance isin line with plansAnnual financial performance isworse than plans41%28%31%11%37%52%28%38%31%28

9、%31%41%22%44%34%33%53%7%50%16%34%8%32%61%28%56%17%32%27%41%14%42%45%28%50%19%AllLarge cosSOE&POEWOFELife ScienceOverall:while 60%saw 2023 results as planned or better,a significant improvement from previous year(50%)yet 40%had a worse than planned performance in 2023 showing that expectations were h

10、igh but failed to materialize.Large and Foreign companies(WOFE)are gaining better business outcome in 2023FY probably resulting from a more cautious approach to past year.Especially for foreign businesses,as 50%reported a better performance than planned Local companies(SOE/POE)seemed to have had hig

11、her expectations for 2023 and which did not materialize.Surprisingly,life science companies(86/124)are reporting for 73%either below or above expectations 2023 results showing that 2023 was full of surprises.2024 Survey2023 Survey2022 Survey6China Life Sciences&Health Care Industry 2024 Survey Resul

12、ts 2024.For information,contact Deloitte China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise#2.Your 2023 business performance was mainly impacted by Overall Business Outlook&

13、ConsiderationsKey Insights81%57%50%40%38%23%11%63%40%27%56%21%10%Effects from the VBP policies or NRDL inclusionAchieving new product launches in ChinaIncreased business development efforts(e.g.global orlocal driven deals)Partnering with local/domestic organizations to reach afaster market penetrati

14、onChanges in Hospital access during the yearLocalizing your supply chain in ChinaIncreased direct patient engagementAllLarge cosSOE&POEWOFEC-levelLife SciencePricing and the overall economic value cycle remain the top impact factors for all stakeholders since our last years studySuccessful product l

15、aunch has risen of importance,as this is the new battlefield to stay relevant and also grow topline Enhanced localized business development efforts and allocated resources,together with finding a better market access through partnering models are cited by nearly half of the respondents.Especially fo

16、reign companies are keen to explore such models.Interestingly,the localization programs for existing supply chains remain the same from prior year.Carbon emission as well as global production capacities and local market volumes are yet to eventually generate changes.2024 Survey2023 Survey7China Life

17、 Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.#3.Within your organizational&business model which are the key changes implemented in 2023?Overall Business Outlook&ConsiderationsKey Insights79%72%64%59%50%35%27%15%56%83%83%53%49%42%26%9%Marketing and sa

18、les teams have been adjusted as a result of policies and regulatoryimpactMarketing and sales teams have been adjusted to reflect new channelsGovernment affairs and relations have become more important than beforeR&D activities in China have had new resources been allocatedSupply chain arrangement ha

19、ve been reviewed and trigger changes going forwardEnhanced(created)and empowered a digital expert team based in ChinaEnlarged the scope of your shared service center functions inside in ChinaArranged shared services support from outside China locationsAllAligned with survey results in previous years

20、:commercial team organization and government affairs remain the top three factors to all respondents,but we also note thatNew channel team re-setting has now been completed thus decline in priorities,and also government affairs are fully embedded and no longer require special emphasis(more attention

21、)R&D related activities and allocated resources are rising in the priority list,while the expert teams(digital)have been covered thus decline in terms of priorities.High Importance2024 Survey2023 Survey8China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitt

22、e China.6%23%39%49%54%62%80%87%Arranged shared services support from outsideChina locationsEnlarged the scope of your shared servicecenter functions inside in ChinaEnhanced(created)and empowered a digitalexpert team based in ChinaSupply chain arrangement have been reviewedand trigger changes going f

23、orwardR&D activities in China have had new resourcesbeen allocatedGovernment affairs and relations have becomemore important than beforeMarketing and sales teams have been adjustedto reflect new channelsMarketing and sales teams have been adjustedas a result of policies and regulatory impact#3.Deep-

24、dive by stakeholder typesOverall Business Outlook&ConsiderationsKey InsightsPolicy and regulatory changes continue to impact significantly the commercial team models to all categories of stakeholders in 2023,topic top in mind to all c-level and in particularly within large companies and foreign play

25、ers.SOE&POE are much less concerned&impacted by either regulatory and policy changes or expanding into new channels(POE=many pre-commercial companies)Local players(SOE&POE)are focusing on increasing resources in R&D activities;and also exploring more shared service arrangement to enhance efficiencie

26、s and reduce costs.C-level respondents,continue to highlight the importance and focus on government affairs and their critical role to success in the local marketplace 20%30%31%50%70%63%65%70%9%25%44%44%47%66%75%91%16%25%33%46%57%69%73%81%Large cosSOE&POEWOFEC-levelNote:Large cos company with 2023 r

27、evenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise9China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.#4.How do you foresee your China business outlook 2024?Ov

28、erall Business Outlook&ConsiderationsKey Insights39%33%17%11%48%35%10%8%Top line revenue plan 2024 considersa growth of 10%Top line revenue plan 2024considers a growth between 5-10%Top line revenue plan 2024 considersa single-digit growth 10%for 2024(overall foreign companies respondents are just sl

29、ightly more ambitious for 2024 as 81%seen growth higher than 5%(79%in 2023 survey)39%38%17%6%44%40%8%8%48%33%13%6%66%22%5%7%48%33%13%6%47%32%13%8%38%33%18%11%46%38%10%7%2024 Survey2023 SurveyAllLarge cosSOE&POEWOFELife ScienceNote:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-ow

30、ned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise10China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Pri

31、vate-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise#5.How is your current overall business outlook for China for the next 3-5 years?Overall Business Outlook&ConsiderationsKey Insights45%33%32%11%9%Our outlook is better than before,so our China focus has beenfurther elevated w

32、ithin our GroupThe China outlook has become less clear and readable thus we arebecoming more cautious allocating investment to ChinaOur outlook remains the same as previously,also China has tocompete internally to obtain its required investment budgets forgrowthDoing business in China is perceived a

33、re riskier with less rewardthan before,thus we are getting less resources to develop ourChina businessWithin our Group,other markets have become more appealingthus for our China business we are getting less resourcesAllLarge cosSOE&POEWOFEC-levelLife ScienceComparing to last years survey results:We

34、note an overall stability and consistency in the level of perceptions.A minor increase on Chinas market importance with an increase to 45%in this year(last year 42%)C-level respondents remain confident in the China market with 42%think China outlook remain bright in 2024Meanwhile,20%declare shifting

35、 investment (11%)or having less appeal(9%)to other markets slightly increased from 19%in last year.Foreign companies are becoming more cautious on the future opportunities in China years by years,with 47%stating that China market has become both less readable and less global-priority and only 25%con

36、sider China outlook is better than before11China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.#6.In your latest China market strategy,have you or are you considering the following actions?Overall Business Outlook&Considerations52%50%38%37%35%17%1

37、6%57%53%45%30%10%13%Create China specific governance model that differs from other marketsAdjusting your product portfolio reflecting price constraints&risksgenerated by VBP and NRDL or the general competitive environment in ChinaConsider build China localized system or data house reflecting thecomp

38、liance riskSearch for Chinese based assets for your product portfolio localizationambitionsLeverage specific measures and favorable policies in the special zones(e.g.,GBA,Hainan Boao,etc.)Consider raising local financial resources from third parties(debt),or evengoing public would capital market rul

39、es facilitate thisContinuously invest into China ESG/Carbon emission reduction strategyAllKey InsightsChina-specific solutions continued to hold the first place in the China market strategy in this year,resulted from the gradual completion of the forming of China-feature health care system Foreign a

40、nd local players value the VBP&NRDL impact a lot(1stand 2ndplace respectively),the importance level differs a lot from each others(72%vs.33%)indicate that the foreign players are suffering much higher pricing pressure than locals for China market access While 38%of all respondents believe that it is

41、 important to localize systems&data,for foreign players this is only the 5thfrom 7 prioritiesWe note also a substantial increase in the potential to raise locally funds now top in mind for 17%up from 10%last yearFinally,investing into ESG/carbon emission solutions remains at the bottom for all respo

42、ndents2024 Survey2023 SurveyNew!Large cosSOE&POEWOFELife ScienceNote:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise12China Life Sciences&Health Care Industry 2024 Survey Results 20

43、24.For information,contact Deloitte China.Regulatory and Digital Revolution13China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;

44、JV Joint Venture;WOFE Wholly Owned Foreign Enterprise#7.With the strengthen in the restriction in data privacy and export in China,has your organization been impacted？New Implementations in Regulatory Affairs and Digital TechnologyKey InsightsYesNoThe data privacy&export restriction impact increased

45、 substantially this year,from 42%to 51%,as numerous data transfer related policies and regulations were published and became(technically)effectiveForeign players see the impact more significantly,as 75%this year,indicate to continue adjusting their China-specific strategy to better fit in the fast-c

46、hanging regulatory landscapeFor domestic companies showing a higher appetite of going-out,the data export restrictions are gradually showing impact as wellTop management respondents(C-level)have now focused their attention to this topic much more that in past year42%51%58%49%2023202451%55%49%45%2023

47、202439%54%61%46%2023202429%37%71%63%2023202445%75%55%25%20232024AllSOE&POEWOFELarge cosC-level14China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Privat

48、e-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise#7.Deep-dive among those who said Yes,the impact was found in New Implementations in Regulatory Affairs and Digital TechnologyOverall:The impact on operational costs has declined to 36%respondents(down from 60%last year).Largest

49、 change resides with domestic companies(declined a lot)while foreign players impact continues to be rather high with two-thirds of all foreign companies The increased operation cost for WOFE may also due to the higher cost for China-only solutions compared to global solutions The R&D and clinical tr

50、ial activities are less impacted by the nationwide regulatory initiatives simply due to the initiatives more focus on the post-marketing events and promotions Interestingly,the impact on the development of China-only solution has been reduced in overall particularly to local players(from 83%to 7%).T

51、his might be due to most LSHC companies have become more well-prepared for the data issue in China in recent years36%42%26%63%41%11%8%11%13%11%15%18%7%19%14%AllLarge cosSOE&POEWOFEC-levelAllLarge cosSOE&POEWOFEC-levelAllLarge cosSOE&POEWOFEC-levelImpacted as resulting in increased operating costs in

52、 ChinaImpacted as resulting in less R&D or trial activities beingcarried out in ChinaImpacted as resulting in developing specific China-onlysolutionsKey Insights15China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.#8.Considering Chinas pace to te

53、chnology changes and digital patient engagement,has your organizationNew Implementations in Regulatory Affairs and Digital TechnologyKey Insights48%40%38%32%24%Allocated more resources to manage your IT&datacompliance frameworkChanged your talent model for digital competencies(moredata technology)Al

54、located more resources for 2024 to build more capabilitiesaround data&IT security for your China businessDeployed local IT&data solutions that are different fromthe global toolsBuilt a China-based data house or initiated an in-China data hosting structure planAllSOE&POEWOFELarge cosC-levelRank statu

55、s:IncreaseDecreaseNo changeNew!IT&data related investments continue to attract a larger portion of the compliance related investments,with 48%of all respondents but is reducing for foreign companies(only 4thpriority out of 5)indicating that they believe having a robust system&process in place alread

56、yCompetition in digital talents has escalated in 2024,elevated by all players to their 2ndhighest priority the talent war is core to in-market competitiveness for all companiesForeign players continue to review and opt for local IT&data solutions that eventually are different from global tools A Chi

57、na-based data house is cited by only 24%of all respondents,and consistently ranking 5thpriority and lastNote:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise16China Life Sciences&Hea

58、lth Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise#9.Under the China nationwide regulatory initia

59、tives,have you and your organization New Implementations in Regulatory Affairs and Digital Technology67%68%61%66%65%33%32%39%34%35%AllLarge cosSOE&POEWOFEC-levelYesNoOver two-third of respondents felt harder patient access under the nationwide regulatory initiativesInterestingly,local player respond

60、ents felt slightly less pressures for the difficulty in patient access compared to others 37%28%31%38%38%63%72%69%63%62%37%34%37%31%40%63%66%63%69%60%60%66%46%81%65%40%34%54%19%35%31%30%33%31%28%69%70%67%69%72%#9.1.Have you observed more difficult patient access from August 2023 and onwards?#9.2.Has

61、 your revenues been impacted in Q3 and Q4 2023 by 10%or more?#9.3.Has your new patient enrollment programs reduced by more than 10%?#9.4.Has your market direct engagement(e.g.medical events,conferences,etc.)reduced by more than 15%?#9.5.Has your OPEX been reduced by 15%or more in 2023?The revenue im

62、pact was less than expected with only 37%felt impactedThe revenue impact was less in large cos and local players respondents The patient enrollment was less impacted as the regulatory initiatives majorly focus on the illegal sales and promotion eventsForeign players usually has a stricter patient co

63、mpliance requirement hence felt less impactedThe market events are impacted the most many medical events and conferences were on hold or cancelled since mid-2023Foreign players sell patent products mostly,which may involve more medical events to exchange medical information compared to the locals.Th

64、ere was limited impact on the OPEX since the major impact is on the external event and accessTop management team felt the least impact on the OPEX reduce Key InsightsKey InsightsKey InsightsKey InsightsKey Insights17China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,co

65、ntact Deloitte China.#10.With Chinas regulatory environment keep adjusting,do you think thatNew Implementations in Regulatory Affairs and Digital TechnologyKey Insights59%52%52%46%36%35%20%New drug registrations will continue to accelerate and your market accessfor innovative assets will further be

66、facilitatedYour direct market and patient engagement will need further adjustmentin the future to meet the new regulatory and compliance requirementsDomestic companies will gain a further preferential treatment in yourmarket segmentsThe stepping up effort in applying AI and digital technology throug

67、houtyour business value chainYour global supply chain organization might require an adjustment tofurther localize,increase domestic sourcing in your value chainChinas health administration will try to motivate foreign companies inlicensing and partnering transactions to further localizeYour imports

68、are likely to attract higher duties or increased scrutiny ontransfer pricing arrangementsAllLarge cosSOE&POEWOFEC-levelInnovation and new assets remain the critical focus to all respondents,especially to large cos(70%)and WOFE(66%)yet relatively a less-important focus to local players(52%).The local

69、ization of supply chain for WOFE has changed a low 4thrank,from top rank in 2023To SOE&POE respondents,the local-preferential policies are the most critical factor(59%)yet is ranked as the last-third for WOFE(38%),which indicating a different regulatory landscape forecast among domestic and foreign

70、players.The application of advanced digital and AI tools are receiving higher attention,especially to foreign players,to fasten and improve the product lifecycle of their innovation assets Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Ente

71、rprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise18China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.New Business Opportunities&Challenges19China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Delo

72、itte China.#11.For new market channels beyond the traditional in hospital channel,has your company increased investment on these new channels?Catalysts for China Business InvestmentKey Insights54%51%46%66%58%23%32%24%19%22%23%17%30%16%21%AllLarge cosSOE&POEWOFELife ScienceThis investment be done thr

73、ough alliances with third partiesBuild the online business channel through own capabilityHave not increased emphasis into new distribution channelsUnsurprisingly a large majority(77%)of all respondents are deploying investment in the development of new channels as a key for market penetration and gr

74、owth.Very notable difference between domestic and foreign companies,as 66%of foreign review(and use)the deeper penetration using an alliance model&third-party partners,while domestic companies prefer to operate these channels directly.Larger companies,having more resources are also using internal re

75、sources to expand into the direct to patient or platform online model.Domestic companies SOE&POEs seem less engaged in exploring new channels with 30%responding no particular emphasisNote:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise

76、;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise20China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE

77、 Wholly Owned Foreign Enterprise#12.What are the most relevant considerations from your perspectives when introducing new products into China?Catalysts for China Business InvestmentKey Insights5.5 3.7 3.5 3.3 2.8 2.2 5.5 3.8 3.6 3.3 2.6 2.2 Market potential and patient population needs/demandRight b

78、usiness model and supply chain alignment with the globalbusiness including appropriate transfer pricing policiesGlobal and local competition specific to the China marketPotential price adjustments resulting from government driveninitiativesGovernment incentives including tax incentives and othergove

79、rnment supportsSpecific patient support programs being prioritized and favoredby central/local governmentsAllLarge cosSOE&POEWOFEC-levelOverall:Scale matters!Consistently over prior years,this is cited by all players as the key&core reason of Chinas market attractivenessLocal players focus less on t

80、he price changes while foreign players focus more on the pricing strategy and economic returns throughout the product life cycle resulting from the government driven initiatives(shorter time to NRDL,VBP etc).Larger companies overall,take more seriously the China to Global(C2G)as a competitive threat

81、,as local companies innovation results and assets,show every year encouraging results,making them eventually true global players going forwardRank status:IncreaseDecreaseNo change2024 Survey2023 Survey21China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitt

82、e China.Note:Large cos company with 2023 revenue exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise#13.Some industrial players have engaged in M&A/License deals to enhance their China for China portfolio,while some are u

83、sing specific investment vehicles to participate into the Chinas innovation space as investors(direct/indirect).And your organization isCatalysts for China Business InvestmentKey Insights42%44%44%41%44%56%63%52%63%57%51%63%31%69%48%9%4%9%9%10%AllLarge cos SOE&POEWOFEC-levelAllLarge cos SOE&POEWOFEC-

84、levelAllLarge cos SOE&POEWOFEC-levelAllLarge cos SOE&POEWOFEC-levelWe are planning to increase our investmentresourcesWe have enhanced(created)a localized businessdevelopment functionWe are identifying potential local acquisition/partnering targets in respect of entities or pipelinesWe are consideri

85、ng retracting from this because ofits lower-than-expected benefitsChina holds a must-do investment to most of respondents(91%),however over half of respondents are being cautious and holding a reserved attitude in increasing the investment.The overall investment appetite with 42%indicating an increa

86、se remains positive.It is slightly below prior year,down from 53%.This echoes our earlier finding in previous questions for the higher risk perceived in the China market.Foreign companies have further enhanced their local China for China business development functions and teams.Numerous recent trans

87、actions have shown that Chinese assets can be of interest either,for global markets but enhance a local market product pipeline in the short term.In contrast,local players are less favoring in acquisitions simply due to the higher cashflow pressure in recent years YesNo50%22China Life Sciences&Healt

88、h Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.#14.Which area you expect that your business strategy and investment for China market will be adjusted or changed in 2024?Catalysts for China Business InvestmentKey Insights46%46%44%40%35%32%25%24%60%47%43%57%Review spec

89、ifically pipeline and portfolio choices for ChinaImplement better ROI assessment on the market engagement investmentAccelerate your market access programs in ChinaIncrease the R&D investment to support localized product developmentEnlarge the adoption of digital technology in your business value cha

90、inIncrease the compliance investment to meet the new regulatory standardsIncreased localization of your supply chain and enlarging industrialoperations in ChinaReview talent and management structures,thus increasing a larger multi-cultural approach to your China operationsAllLarge cosSOE&POEWOFEC-le

91、velLife ScienceWith the China market becoming more mature attention crystalizes further on pipeline/portfolio choices and more so the ROI,in particular on the ever-rising market engagement costs.This is particularly true for the foreign companies and all c-suite respondents.The importance of acceler

92、ating market access has dropped significantly,from 60%in 2023 to 44%,as the market access pathway in China,has now been further standardized,transparent and greatly accelerated.For local players,their concerns continue to be in the area of R&D investment,to increase asset quality and afterwards achi

93、eve a profitable market reflecting a higher focus on the go-to market planning we see.Foreign companies indicate that digital technologies remain in the center of their operational model and its enhancement(higher control?)New!New!New!New!2024 Survey2023 SurveyNote:Large cos company with 2023 revenu

94、e exceed RMB 1 billion;SOE State-owned Enterprise;POE Private-owned Enterprise;JV Joint Venture;WOFE Wholly Owned Foreign Enterprise23China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.In conclusion 24China Life Sciences&Health Care Industry 2024

95、 Survey Results 2024.For information,contact Deloitte China.Step back:Lets review our 2023 predictions PredictionsWhat happenedChinas innovation landscape has many players with unique and niche capabilities.Localization ambitions will allow for some to emerge as core market expansion solutions to fo

96、reign players.The battle for global talent will re-start in 2023 and the speed of innovation in China will rise and accelerate once again.New product launch will become the key growth driver.Supply chain localization has become more important especially for high volume products and increased domesti

97、c competition.With a favorable momentum,now is the time to review all options.Digitalization and building a China-fit eco-system has been the emphasis for many players during these covid-years.This trend will continue.Business compliance activities during these covid-years have been neglected or red

98、uced.We shall see more emphasis of those going forward as regulators increase their activities.Out licensing deals hit a five year high in 2023:a total of 61 out licensing deals were inked in 2023,21 more than in 2022,with many FIC/BIC assetsthat covering various novel segments such as ADC,CGT,etc.I

99、n Apr.2023,the NMPA issued new regulations that further optimized the regulatory approval process and evaluation of novel drugs,to strengthen the concept of clinical performance driven innovationIn Nov.2023,the NHSA proposed the“Newly Approved Drug Initial Price Formation Mechanism”,aiming to provid

100、e reasonable returns for innovative assets in the early stages of commercializationThe strengthened normalization of VBP and the standardization of NRDL updates have raised the cautious among foreign players and urged the stepping up effort in the supply chain localizationIn 2023,pharma MNC are incr

101、easing the investment in Chinese local biotech via M&A deals,even for a premium acquisition,to enhance their China-fit ecosystem establishmentStarting from mid-2023,health regulators have initiated nationwide anti-corruption moves.The comprehensive corrective action across the entire industry chain

102、from all aspects of the LSHC sector have resulted in many black swan events and the reshaped the regulatory landscape25China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Review of our 2023 predictions 202020224Future of work is closer

103、and will arrive fasterNew technologies will accelerate the move to a healthier ChinaPartnering and building new business model will be key to capture marketsGovernment and regulators speed up their Healthy 2030 plans and objectivesRapid development of online modes&channel is bringing B2C models to t

104、he industry,and increases emphasis on regulation in data security and compliancesChinas market will continue to grow faster than most mature markets and will be impossible to be ignored The influence power of government sectors is still increasing,especially with the medical pricing reform and data

105、protection regulation updatesThe pace of innovation growth has been accelerated as a result of the formulation of various partnerships and R&D investmentMore and more companies are formulating more and more a China-specific business model and strategy Digitalization and building a China-fit eco-syst

106、em has been the emphasis for many players during these covid-years.This trend will continue.The battle for global talent will re-start in 2023 and the speed of innovation in China will rise and accelerate once again.New product launch will become the key growth driver.Business compliance activities

107、during these covid-years have been neglected or reduced.We shall see more emphasis of those going forward as regulators increase their activities.Chinas innovation landscape has many players with unique and niche capabilities.Localization ambitions will allow for some to emerge as core market expans

108、ion solutions to foreign players.Supply chain localization has become more important especially for high volume products and increased domestic competition.With a favorable momentum,now is the time to review all options.For 2024,we predict that26China Life Sciences&Health Care Industry 2024 Survey R

109、esults 2024.For information,contact Deloitte China.China LSHC Market Insight and Outlook in 2024 China LSHC Business Outlook&ConsiderationsRegulatory and Digital Compliance RevolutionNew Business Opportunities&ChallengesWith the emphasis and speed-up in forming a China-feature healthcare system,the

110、importance of developing China-specific solutions has been again raisedBoth foreign and local players are optimizing their pipeline and going lean in order to strive with a slower economic pace In addition,market access strategy,for both going-in and going-out,have become a critical considerations t

111、o all players to stay competitive in the market The massive,still on-going,nationwide regulatory initiative is reshaping the compliance matters in China LSHC market The strengthened data privacy and exportrelated regulations updates start to showing impact in 2023 and onwards The compliance and resi

112、lience in managing external marketing activities and digital implications upon the improvement of compliance and data security related systemThe economic uncertainties and the accelerated medical reform pace,LSHC players become more cautious in new investments Survey result showed that many industri

113、al players are re-assessing the ROI and the pricing strategy for China marketTherefore,many LSHC companies in China are now reviewing all options and resources to seek for a better China-fit development Chinas innovation landscape has been more standardized and regulated,which will further eliminate

114、 players lack of sufficient capability to keep up with China LSHC market growthComprehensiveness,professionalism,and accuracy are the keys to survive under the new regulatory and compliance landscape in China LSHC marketThe future investment will be slowed in 2024 with a shifting from fast expansion

115、 to secure existing resources instead.Thepotential to commercialize will become more important 27China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.China LSHC Market Insight and Outlook in 2024 China LSHC Business Outlook&ConsiderationsRegulatory

116、 and Digital Compliance RevolutionNew Business Opportunities&ChallengesChinas innovation landscape has been more standardized and regulated,which will further eliminate players lack of sufficient capability to keep up with China LSHC market growthComprehensiveness,professionalism,and accuracy are th

117、e keys to survive under the new regulatory and compliance landscape in China LSHC marketThe future investment will be slowed in 2024 with a shifting from fast expansion to secure existing resources instead.Thepotential to commercialize will become more important Market engagement model will require

118、adjustments,impacting resource deploymentPipeline and product launches will require in-market focused approaches,impacting global collaborationChina regulatory environment will continue to strengthen,requiring compliance programs to be enhancedLocal data technologies accelerated through Gen-AI techn

119、ologies will shape many new processes going forwardImpact 1Impact 2Impact 3Impact 428China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.Deloitte China Life Sciences&Health Care Team ContactsJens EwertIndustry LeaderChina Life Sciences&Health Care

120、 Survey&Authors Additional contactsBill YangFinancial Advisory LeaderChina Life Sciences&Health Care Tony LinDeloitte Research Assistant ManagerChina Life Sciences&Health Care Carrie XiaoLife Sciences&Consulting LeaderChina Life Sciences&Health CScott SunConsulting Deputy LeaderChina Life Sciences&H

121、ealth Care Travis ZhuRisk Advisory LeaderChina Life Sciences&Health Care James ZhaoTax Advisory LeaderChina Life Sciences&Health Care David YuAssurance&Audit Leader China Life Sciences&Health Care Linda PuProgram ManagerChina Life Sciences&Health Care 29China Life Sciences&Health Care Industry 2024

122、Survey Results 2024.For information,contact Deloitte China.Appendix30China Life Sciences&Health Care Industry 2024 Survey Results 2024.For information,contact Deloitte China.AppendixLarge companies(71/124)composition:companies with revenue above RMB 1 billion in 2023 The average score was calculated

123、 based on the weight of its rank in each answer for question#12The weight for each rank is different and is descending from rank 1 to rank 6Rank 1=6 score;rank 2=5 score;rank 3=4 score;rank 4=3 score;rank 5=2 score;rank 6=1 scoreThe average weight score calculation formula:(rank 1#)*6+(rank 2#)*5+(r

124、ank 3#)*4+(rank 4#)*3+(rank 5#)*2+(rank 6#)*1)/(total respondent#)For example,the option A was selected for 13 times:rank 1 for three times;rank 2 for four times;rank 3 for twice;rank 4 for twice;rank 5 for once;rank 6 for oncethe average weight score of option A will be:(3*6)+(4*5)+(2*4)+(2*3)+(1*2

125、)+(1*1)/13=4.23The average weight score of option A will be 4.23A higher average weight score represent a higher importance degree of the subject to respondentsChairman/CEO,10%C-suit Level,51%Other Management Level,39%SOE,6%POE,30%JV,13%WOFE,52%Pharma,80%Medical Devices,13%Healthcare Services,6%Dist

126、ributor/Retailer,1%Less than 5,000,41%5,000 to 10,000,32%More than 10,000,27%Company TypeFunction TypeIndustry SectorNo.of EmployeesAbout DeloitteDeloitte China provides integrated professional services,with our long-term commitment to be a leading contributor to Chinas reform,opening-up and economi

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