With a population of over 1.3 billion, China is poised for continued growth in the life sciences sector. There are several factors that will contribute to this growth, including overall rise in economic condition, increase in middle-class population, elaborate healthcare reforms, an aging population, and boom in medical infrastructure. All these factors are results of sustained increase in government research budgets, investment by multinational pharma companies, and government healthcare funding initiatives.

China, due to its geography, has a highly fragmented drug distribution industry which has witnessed consolidation in the last couple of years. This has happened as part of the government's 12^th Five-Year Plan (FYP) 2011-15 to strengthen the national drug distribution industry by actively supporting acquisitions, mergers, and reorganizations.

On March 14, 2011, China's National People Congress approved the 12^th FYP which focuses on key "strategic emerging industries" (SEIs) that will benefit from preferential government support. The plan focuses on seven SEIs, including areas such as energy, information and communication technology, and biotechnology.

By developing a strong industrial base and encouraging pharmaceutical research and development (R&D), the nation believes that it can simultaneously develop an economic engine for the future, while improving the quality of life for its citizens.

The Ministry of Health (MoH) also announced lowering of drug prices a top priority for health authorities in 2011. The National Development and Reform Commission (NDRC) implemented two rounds of drug price reductions in 2011. In August 2011, the NDRC issued a notice stating an average 14 percent price cut on 82 types of drugs, involving more than 400 formulations. The price cut, effective from September 1, 2011, affected endocrine, nervous system, and hormonal drugs. Most of these drugs were manufactured by multinationals.