CLEVELAND, OH -- (MARKET WIRE) -- 03/14/2006 -- Demand for pharmaceuticals in China is projected to increase 13.6 percent annually to 375 billion yuan in 2010. Western proprietary ethical drugs will generate the strongest growth based on new product introductions, especially for cardiovascular, neurological, cancer and antiviral indications that are not treated effectively by currently available therapies. Western generic ethical medicines will continue to hold the largest share of the Chinese pharmaceutical market.

The best growth opportunities for western generic ethical medicines will emerge in newly off-patent cholesterol-reducing, antipsychotic and second-generation antihistamine preparations.

Based on proven efficacy over thousands of years and sustained profitability among older residents, traditional Chinese medicines will continue to form a large segment of China's pharmaceutical industry. However, due to the lack of proprietary products and sharper pricing competition, these preparations will see somewhat slower growth than Western drugs.

These and other trends including Market Share, Market Leaders, Market Size and Company Profiles are presented in "Pharmaceuticals in China," a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm. Western pharmaceuticals are forecast to generate demand of 248 billion yuan in 2010, comprising about two-thirds of the market. Regulatory and commercial reforms will open up distribution systems to a wider range of proprietary and generic drugs. Several therapeutic classes of medication, including antiviral, anticancer, psychotherapeutic and neurological agents, are underserved in China and the cause of major imbalances in the overall quality of health care. The government will encourage the increasing development of medicines in these areas by lowering trade barriers and increasing internal funding for biotechnology research.

Western over-the-counter (OTC) medication will increasingly penetrate the Chinese market as the government promotes the expansion of the retail drug sector to improve the accessibility of basic medicines to residents of rural and overcrowded urban areas. New versions of existing ethical antihistamines, analgesics, antifungal agents, cholesterol reducers and acid reducers will generate the strongest growth opportunities based on treatment needs in the population. The expansion of the drug store sector will also create a new distribution channel for widely prescribed ethical drugs such as cephalosporin and quinolone anti-infectives, AIDS/HIV antivirals, and insulin and oral antidiabetic agents.