Medical reforms spell out profit for pharma giants

China now has 148 million people with pre-diabetes on top of an existing 92.4 million diabetes patients.

The number of patients is forecast to reach 130 million by 2030, creating medical costs related to type-2 diabetes of $47.2 billion, according to International Diabetes Federation.

In the China National Plan for Chronic Diseases Prevention and Treatment (2012-2015), diabetes has been given specific importance.

"Our advantage is in early-stage diabetes treatment. Our Glucophage (an oral diabetes medicine that helps control blood sugar levels) is recommended as initial treatment within national guidelines," said Jean-Christophe Pointeau, president of Bristol-Myers China.

The medicine is on China's essential drug list and Pointeau said he expects another Bristol-Myers product - Onglyza, a prescription type 2 diabetes medicine - also to be included.

Another major international name, Boston Scientific Co, has just announced clinical results of a trial evaluating the safety and effectiveness of a cardiovascular stent system in China.

Clinical trials are the prerequisite of new product introduction.

The US company is also working to introduce more specialist treatment to the Chinese market, including those involved in cardiology and endoscopy, especially in the treatment of chronic conditions, said Michael F. Mahoney, Boston Scientific's CEO.

Since entering China in 1997, the company's average annual growth by sales has kept at 30 percent and it expects to exceed that figure in coming years.

The company is also building a research and development, training and head office complex in Shanghai, which is expected to be completed in September.

China expects to increase its medical spending by 27 percent this year, and to more than double the number of drugs in its national reimbursement medicine list from 205 to 520.

China's medical insurance will cover an additional 20 serious illnesses, including lung and gastric cancers, chronic myelocytic leukemia, hemophilia, type-1 diabetes and cerebral infarction.

These are also other serious diseases seeing increased occurrence in China, which lack high-quality diagnosis and treatment equipment being produced by domestic companies, according to a recent report from Bank of China International (China) Ltd.

Sanofi's Lam added that so far the company cannot assess how successful its investment in the Chinese market has been, "but we believe in the long run, it will be absolutely positive to us".

Sanofi's diabetes business increased 25 percent year-on-year in 2012, compared with the average growth of the sector at 15 percent.