Sinopharm Group Co., China¡¯s top drug distributor, teamed with Mitsubishi Corp. to form a medical supply distributor to slash the rising cost of health care in Asia¡¯s biggest economy.
Sinopharm MC Hospital Services Co., based in Shanghai, will add to the two Beijing-based pharmaceutical wholesalers the partners took over this year with Tokyo-based Medipal Holdings Corp., Mitsubishi said Thursday in a statement.
Health care is a growing market for Japan¡¯s trading houses, with Mitsubishi already the biggest medical supply provider at home. Mitsui & Co., Mitsubishi¡¯s biggest domestic rival, made its largest investment outside commodities in 2011 by paying $1.1 billion for a minority stake in Kuala Lumpur-based IHH Healthcare Bhd, Asia¡¯s top hospital operator.
Led by Japan, South Korea and China, Asia is the fastest aging region in the world and is set to account for 60 percent of the world¡¯s elderly by 2030, according to Mitsui. China will have 300 million people 65 and over by that period, while its rural market for health care is growing at 18 percent a year, Boston-based Lux Research said in a report last year.
The medical supply market in China grew to 157 billion yuan ($25.8 billion) last year, more than double the 69 billion yuan in 2008, according to Mitsubishi.
A ¡°complex distribution network¡± of drug sellers that may be 100 times larger than Japan¡¯s and inefficient management are behind China¡¯s push to cut medical services costs, Mitsubishi said.
China¡¯s Ministry of Commerce in May warned of a rapid rise in drug distribution costs in the country.
Hong Kong-listed Sinopharm is controlled by state-owned China National Pharmaceutical Group Corp.
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