Pharma to See Big Growth in East in 2011

According to investment international, 2011 will be a successful year for the pharmaceutical industry due to a rise in emerging markets, which is estimated to grow by 70 percent by 2015.

China plans to invest £125 billion supporting health reform according to Peter Kirkman, fund manager of the JPM Global Consumer Trends Fund. He also confirmed that governments in Russia and Brazil have made similar commitments.

"Growth for the healthcare sector is shifting eastwards. Not only is there a growing population to look after but there is also a lot of catching up to do in terms of understanding the relationship between healthcare spending and productivity."

Kirkman points out that the rise in Eastern pharma is due to unprecedented amount of state healthcare insurance expansion and health infrastructure building. The result means Eastern markets have now overtaken those in the West. Pharmaceutical consumption growth also outstrips per-capita GDP growth. Chinese GDP has grown around 10 percent in recent years whilst pharmaceutical spend growth has been 25 to 30 percent per year.

The emergence of Eastern markets positively impacts its Western counterparts. Sanofi-Aventis, the major diabetes manufacturer has seen 30 perfect of its custom coming from emerging markets as Diabetes becomes a growing problem there. In Russia, for example, 45 million people have Dyslipidemia which is caused by too much cholesterol in blood.

"Investors can tap into the emerging market healthcare boom by investing in Western pharmaceutical brands that are active in emerging markets. Stocks like GlaxoSmithKline, for example, have high EM exposure with 16% of their total sales for the first nine months of 2010 coming from the region," said Kirkman

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