BD posted double-digit revenue growth in China as government spending on healthcare continued despite economic pressures.
Last year China planned to increase spending on healthcare by more than 15 per cent to continue the overhaul it began in 2009. Concerns about the economy, compounded by a comparatively weak start to 2012, raised questions about spending growth but early signs are positive.
“What our team is seeing is that while there may be some downward pressure on overall GDP (gross domestic product) growth, we're not seeing that downward pressure on health care investments”, Gary Cohen, executive vice president at Becton, Dickinson and Company (BD), said.
Healthcare investments “seem to be remaining on track”, Cohen said, and the government appears committed to rolling out the improvements. Spending on healthcare is supported by taxes, which Cohen said are up and probably higher than expected.
Drugmakers and medical equipment suppliers, many of which are increasingly reliant on China for growth, will welcome the news. In the first quarter BD grew sales to China by 27 per cent year-on-year.
Demand in China helped BD achieve double-digit growth across its Asia-Pacific operations. Other emerging markets also performed strongly, with Cohen singling out Latin America, particularly Brazil, Argentina, and Chile, the Middle-East, and Africa as growth regions.
Gains in emerging markets helped BD Medical, which sells injection devices, post a three per cent uptick in sales. To drive growth in all markets BD is expanding its range of devices in the coming year.
“In the second half of the fiscal year, we plan to launch the world's first 6mm insulin syringe and our BD PentaPoint pen needle, which is more comfortable and anticipated to be preferred by patients”, Vincent Forlenza, CEO of BD, said.