Ping An Insurance (Group) Co of China Ltd said Friday that it expects to see huge growth in insurance coverage for clinical trials on the mainland as the pharmaceutical industry grows in the country and players seek to protect themselves from the risks of drug tests.

"As many major local pharmaceutical manufacturers are gaining the capability of developing new drugs, the market is potentially huge - there are potentially more than 6,000 pharmaceutical makers that will be our clients in coming years," Ping An Senior Director Jenny Liu said on the sidelines of a pharmaceutical forum in Shanghai.

The Central Government has advised mainland drugmakers to buy insurance products to reduce risk in the clinical trials needed to develop new drugs. As a result, demand for such products is growing.

Demand is also rising as more foreign pharmaceutical companies set up R&D facilities in China, Liu said.

Ping An Insurance was the first insurer to provide clinical trial insurance to pharmaceutical manufacturers on the mainland, beginning in 2005. Its premiums grew to 10 million yuan ($1.49 million) by the end of 2009, Liu added. Its main competitors are All Trust and Ming An Insurance.

"The development of this market segment is still in its infancy - it is huge in terms of its growth rate but the size is still small in value terms," Liu said.

"Growth will be at 2 to 3 times per year in the years ahead," Liu said, adding that it could be much faster in future as more drugmakers realize it is one of the few ways to reduce risks from clinical trials.

Ping An accounts for a more than 90 percent share of the market segment, and expects to retain its leading position in the years to come, Liu said.

There are more than 10,000 pharmaceutical manufacturers on the mainland, but less than 2 percent of them are covered by this kind of insurance.

Reuters

(HK Edition 09/18/2010 page3)