Last week, China's State Council approved sweeping reform of its health care system, infusing it with $125 billion to provide universal medical coverage by 2011. And already venture capitalists all over the world are anticipating the opportunities in life science fields -- pharmaceuticals, device making, etc. -- that this avalanche of new funding will make possible.
Medical care in China has been somewhat of a disaster since the demise of the state-run system of the 1980s. With insufficient employer-provided policies covering few, today's system leaves millions of poorer citizens without any coverage at all. In stark contrast, the new plan promises to provide for 90 percent of the urban and rural population, establish a cost-effective pharmaceutical distribution network, and overhaul the current medical infrastructure.
With 7,400 clinics and 2,000 hospitals in the works, companies that provide medical equipment, service technology and the like are poised to benefit greatly. Eventually, after the 2011 time frame, the plan is to have a health clinic in every village -- a massive undertaking, considering there are about 700,000 villages in the country. IBM told VentureWire that China will probably spend upwards of $1.5 billion on software needed to keep track of medical records and generally run operations at all of these facilities.
Most of the investors that stand to benefit are based in China -- Qiming Ventures and Shenzhen Capital Group prime among them. But Asian branches of major American firms are also looking for a slice of the pie -- with Sequoia Capital China, Intel Capital and biotech focused MPM Capital leading the charge. MPM already took part in the $37 million round for Taipei-based Taigen Biotechnology, one of the four Chinese health companies that has taken capital so far this year.