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Politics Is a Bitter Pill for Glaxo
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China's healthcare costs have increased in the last decade without effective cost control measures. With the decline in consumer spending in the last decade to where it is now only 35% of GDP, and ordinary Chinese setting aside a large portion of savings for costly drugs and healthcare, reducing healthcare costs is a high priority to rebalance the economy and increase consumer spending. By comparison in the U.S. it is 70%. Bussey points out the importance of this for the new leadership of Jinping-Keqiang in China. Xinhua, the Party offical news agency, expressed China's new policy, saying that "some believe China may see a nationwide price cut on medicines." Regulators have begun probes of Nestle and Danone for possible anticompetitive activity and the two companies dropped prices for baby formula.
John Bussey on how China's actions against Glaxo form part of the effort to cut drug prices and reduce healthcare costs
07/25/2013
Bussey points out that cutting drug prices is part of the effort to help consumers and reform the economy of the new leadership of Jinping-Keqiang in China. Consumer spending has dropped in the last decade to 35% of GDP and this is needed for rebalancing the economy, as ordinary Chinese have to set aside a large portion of savings for costly drugs and healthcare.
Grouped Articles
Politics Is a Bitter Pill for Glaxo
Wall Street Journal 07/25/2013
Wall Street Journal 10/24/2013
Glaxo Must Show It's Not Winded
Wall Street Journal 10/24/2013
GlaxoSmithKline Reduces Full-Year Earnings Forecast
Wall Street Journal 07/24/2014
GlaxoSmithKline Found Guilty of Bribery in China
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The new Jinping-Keqiang leadership and reducing pharmaceutical and healthcare costs to help consumers in China (1)
10/03/2012
After a decade of decline in consumer spending in favor of infrastructure spending to where it is now only 35% of GDP, or half that in the U.S. as a percentage of GDP, China's leadership realizes the need to help consumers. It is seen as high on the list of priorities for the Party's survival. Ordinary Chinese, rural households and the elderly are seriously affected by the high cost of healthcare and the need to set aside a large portion of savings for medical emergencies (Orlik). This further depresses consumer after the impact of low savings rates. With a bursting of the property bubble the money depositors shifted to real estate is also at risk for middle class investors.
Linked Articles
Wall Street Journal 10/03/2012
Politics Is a Bitter Pill for Glaxo
Wall Street Journal 07/25/2013
The Jinping-Keqiang leadership in China and the need to help consumers by reducing pharmaceutical and healthcare costs (2)
05/31/2013
The particular need to help the elderly in an aging population for China. The elderly suffer most from the need to set aside a large portion of savings for healthcare costs (Orlik).
Linked Articles
Politics Is a Bitter Pill for Glaxo
Wall Street Journal 07/25/2013
Aging Chinese Face a Bleak Picture
Wall Street Journal 05/31/2013
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