Rise in M&A for China's pharmaceutical sector forecast by KPMG

Both multinationals drugmakers and large domestic players are set to grab a larger share of the pharmaceutical market in China, as health care reforms start to play an increasingly important role, according to a recent report from financial consultants KPMG titled China's pharmaceutical industry - poised for the giant leap.

This notes that, while this market is dominated by over-the-counter drugs, it will see a significant increase in demand for prescription medicines. China - the world's third largest drugs market - currently has over 5,000 pharmaceutical companies, about 98 percent of which produce generic drugs.

Norbert Meyring, Asia Pacific and China head, Pharmaceuticals, at KPMG, says: "As drugmakers lose some of their sales growth in Europe, and as the USA and Japan stalls, makers of both prescription drugs and over-the-counter drugs are targeting new markets, particularly in Asia and Latin America. With its rising middle class, China is an attractive investment option. Multinationals are now looking to acquire generic drug companies to compensate for the loss of income from expiring patents. Chinese majors are also waiting in the wings to snap up the market as patents expire."