A doctor takes care of a young patient in rural China. China has a goal of providing universal healthcare coverage by 2020. Provided to China Daily

Big drugmakers take the road less traveled for bigger gains in China

China's dream of universal healthcare by 2020 is expected to create huge opportunities for foreign healthcare companies in rural China.

Although foreign healthcare companies are already providing training to rural doctors in China through their corporate social responsibility projects, many of them expect the informal collaboration to develop into actual revenue-sharing agreements in the future.

One such example is Denmark-headquartered pharmaceutical company Novo Nordisk AS, which entered the Chinese market in 1994, with a focus on diabetes treatment.

To expand its footprint in rural China, the company has invested heavily in training rural doctors on diabetes treatment because rural areas do not currently receive much healthcare investment from the Chinese government, says Chen Jun, vice-president of marketing at Novo Nordisk China.

"In the past, many rural counties with a population of several hundred thousands did not have well-equipped hospitals or specialized doctors who had the capability to properly treat diabetes," Chen says.

"This means patients frequently had to travel a long way to cities to receive proper treatment, which was unsustainable for the management of the chronic disease because of the inconvenient distances and unaffordable costs because of the relatively low-income levels in rural areas."

To change this situation, Novo Nordisk's China team invested heavily in educating rural doctors on diabetes treatment so that patients receive treatment locally. Chen says this process also helps Novo Nordisk to promote its products in rural markets.

"We have a company culture where commercial activities are linked with corporate social responsibility, so our activities in rural China combine both goals," Chen says.

He says tackling diseases such as diabetes is just as important in rural areas as urban areas because urbanization has meant many rural residents traditionally involved in agricultural jobs are now moving to service-based jobs in nearby cities.

He says that although Novo Nordisk's activities in rural China may take some time to generate financial returns, it is a good sign for the future. The Swedish company believes that following this method will help it make considerable inroads into the overall Chinese market.

Chen's confidence in the ability of Chinese rural counties and towns to increase healthcare expenditure is understandable, considering that China has a goal of providing universal healthcare coverage by 2020.

Currently healthcare coverage is available to 95 percent of Chinese citizens, but many rural residents are still not covered, hence heavy investment in rural China is expected if universal coverage is to be achieved.

In 2012, China's then Ministry of Health announced a new plan to increase the subsidy for each rural resident in areas with income levels under the national poverty line to 360 yuan ($57) from 200 yuan a month.

Rural residents living under the national poverty line will have 75 percent of their in-patient expenses reimbursed by 2015, according to the guidelines.

The ministry has also promised to implement more poverty-relief projects in remote mountainous regions as well as parts of Tibet and Xinjiang, among other poor areas.

"It is important for the Chinese government to ensure affordable and good quality healthcare in rural areas," says Zhang Binyun, deputy director of Fudan University's hospital management research institute.

"To improve rural healthcare, the government should invest more, improve rural healthcare practitioners' capabilities and find a sustainable operation model for rural healthcare," Zhang says.

"All these elements should be implemented together. Investment in infrastructure should be accompanied by enhancement of skills and capabilities of doctors and nurses."

He says rural China has many opportunities for foreign investment, including the supply of affordable medical equipment, the supply of medicines and the training of rural doctors.

"The government should give more guidance for private sector investment, both in terms of commercial investment and charitable investment," Zhang says.

An example of a foreign company that has invested heavily in rural China for charitable causes is the Switzerland -based pharmaceutical company Novartis AG, which has launched a project to educate schoolchildren about healthy living and train rural doctors from grassroots hospitals and healthcare centers, so that they can better understand infectious diseases.

Known as Jian Kang Kuai Che (meaning Health Express in Chinese), the project has extended basic health education to 690,000 schoolchildren and 33,000 adults and trained 800 infectious disease physicians, nurses and medical workers since its launch in the Xinjiang Uygur autonomous region in 2010.

Helen Chui, China president of Novartis, says the project aims to bring sustainable healthcare development to China, and her team wants to provide training to local children and improve doctors' capabilities in tackling diseases apart from just providing medicines as a cure.

"In rural areas, individuals do not know much about health and hygiene and healthcare resources are also less developed than in other regions," she says.

According to Chui, Novartis' work in rural China aims to tackle these challenges, mainly by helping rural China build capabilities, so that the company's efforts can have an "enduring impact" for rural China in years to come.

The schoolchildren's training focuses on hygiene habits, and also covers basic lifesaving skills in cases such as fire and electric shocks. The training courses are designed with the hope that students will pass on their knowledge to their parents.

The doctors' training focuses on infectious diseases such as hepatitis B treatment. According to the Ministry of Health, China has at least 20 million chronic hepatitis B patients. The illness has become one of the top three infectious diseases in Xinjiang.

The training also encourages each physician to share with their patients information about the treatment of chronic diseases such as hepatitis B.

In 2012, Novartis signed an agreement with the Xinjiang government and rolled out a three-year partnership to help Xinjiang improve its capacity for hypertension care and cardiovascular treatment.

According to Novartis, the Health Express project involves an investment of more than 10 million yuan every year.

German pharmaceutical company Bayer HealthCare and the then Ministry of Health launched a training program in 2007 called Go West with the goal of improving medical infrastructure and standards of healthcare provision in rural regions, especially in West China.

The program offers training for rural physicians. In each targeted region 600 hospitals are linked to a leading hospital that runs the training, according to Bayer HealthCare.

The project has been successfully extended to 20 regions with 114 training courses completed by December 2012. It also provided professional training to more than 11,000 doctors and hospital executives.

"We felt it was necessary to help the development of rural healthcare in China, given the inadequate infrastructure, doctors with less training and low income of the population there," says Alok Kanti, managing director, Bayer HealthCare China.

"It is part of a long-term perspective. As a leading multinational pharmaceutical company, we would like to leverage our expertise and work with the government to develop China's healthcare infrastructure in these areas."

Kanti says that the Go West program focuses on common diseases in rural areas, frequently occurring and difficult or complex diseases. It also provides training in county-level hospital management, doctor-patient relationships and other topics.

The program is run in cooperation with medical universities and colleges in China's rural areas. Full-time training programs, generally run for three months, covering topics including internal medicines, surgery, pediatrics, gynecology and medical technology, Kanti says.

Contact the writer at cecily.liu@chinadaily.com.cn

(China Daily 07/15/2013 page17)