Making a socio-economic footprint in China
China is one of the fastest-growing economies in the world with the world’s second-highest number of people with diabetes (second only to India). It is estimated that about 25-30 million Chinese people have diabetes, and according to the WHO, the number will reach 45-100 million over the next 20 years. To Novo Nordisk, China offers a huge business potential, but also an important social and educational challenge. A series of national and community-based programmes are aimed at increasing general awareness and improving medical care.
The rapid growth in diabetes has occurred alongside the country’s social and economic development. The number of extremely poor Chinese in absolute terms (living on less than $1 a day) has fallen from about 31 per cent of the population in 1990 to an estimated 10 per cent in 2005 (note 1). However, income inequality has also increased and there are now even greater differences between the livelihood of Chinese living in rural and urban areas. Rural China is still best described as a developing country while urban China is on its way to caching up with the developed world.
The increased urbanisation, improvements in nutrition and longevity have also brought along the less desirable lifestyle problems such as reduced physical exercise and other factors known to cause diabetes. However the public healthcare system and the general awareness about diabetes are developing accordingly, and to Martha Emneus, Advisor, Economics, this represents a key challenge to Novo Nordisk.
Meeting the challenges
“Today only about 20-30% of the Chinese diabetics are diagnosed due to these factors. Another significant problem is that many of the people actually diagnosed with diabetes never receive the necessary treatment, partly because the treatment today is relatively costly compared to the average Chinese income and partly due to lack of awareness.
We find that Novo Nordisk has a responsibility to contribute in every way we can to increase awareness and improve diabetes care in general. We also believe that we can make an equally important contribution by further investing in the development of our business, recruit and train local staff and specialists, use local suppliers and business partners and through a dedicated business strategy add to the general socio-economic development of the country,” says Martha Emneus.
Active measures to improve awareness in cooperation with public authorities
China is a huge country and in many rural areas and even cities, the healthcare system is not sufficiently prepared for the growing diabetes challenge. Therefore, Novo Nordisk has initiated a range of activities aiming to reach as widely as possible.
Novo Nordisk estimates that its awareness and education programmes have a direct outreach to more than 1,100,000 people; for example Novo Nordisk has funded the first Chinese-language diabetes information website; has initated a NovoCare Club which now has 307,000 members, has sponsored over 100 free diagnosis clinics and 45 mobile clinics to reach local communities.
Together with the Chinese Ministry of Health, Novo Nordisk has launched the National Diabetes Management Programme, which aims to provide diabetes education and training to physicians and to establish models of diabetes care in hospitals and community health centres. Activities like these, directed at both the general public and healthcare professionals across China, will continue in 2005. Some 80,000 doctors have been reached through medical educational programmes since 1997 and at least 4 million people with diabetes or impaired glucose tolerance may benefit from treatment by a health care professional educated in diabetes.
With the NDMP project, the first Guideline of Diabetes Prevention and Control was established and promoted in hospitals nationwide. It is the first time for China to explore and establish a hospital-community integrated model of chronic disease management.
Novo Nordisk is well known in China among physicians. Since 2002 the company sponsored the National Diabetes Update meeting annually, with 450 to 550 top endocrinologists from across China attending the event each year.
The company is also working actively with the media, which has resulted in a large number of television programmes, radio programmes and newspaper articles reaching 600 million people.
Effects on employment in China
Novo Nordisk China opened in 1994 with two employees, and has had an average annual growth rate of more than 50% ever since – a remarkable performance, even in the world’s fastest growing economy. Today, Novo Nordisk China employs 564 (note 2) employees in China within sales, R&D, packing, quality control and production and has a diabetes market share of more than 70% and the activity level is expected to increase significantly over the next years. Currently 500,000 to 775,000 (note 3) people with diabetes in China are estimated to benefit from insulin produced by Novo Nordisk.
Besides the direct effect on employment there are also indirect effects of employment. Whenever Novo Nordisk increases its activities Novo Nordisk's Chinese suppliers benefit. Increased production lead to increased demand for locally produced as well as imported goods - hence employment increases, as local suppliers hire more workers.
Furthermore, people who are employed generally have a higher level of income than those who are unemployed, and can thus afford to consume more goods. This leads to more jobs in firms that produce and sell consumer goods. Thus 564 jobs translate into an estimated total of between 1,800 to 3,400 jobs (note 4). The range illustrates that the employment effect from consumption and at suppliers are rather uncertain in countries like China, where imported goods are becoming increasingly important as is the private consumption of durable goods.
However, not only the people employed, but also their families benefit. The average number of persons supported by an employee in China is 1.9 (including the employee) (note 5). Hence, between 3,400 and 6,500 Chinese are affected in terms of income by Novo Nordisk's activities in China.
Notes:
1) China Statistical Yearbook 2004.
2) By the end of 2004. On average there was 521 jobs (Full-time positions) in 2004.
3) The range is due to the fact the in the developing world two or three persons may share a daily dose.
4 ) Source: China Statistical Yearbook 2004 and Novo Nordisk. Calculated on the basis of an average of 521 jobs in 2004.
5) China Statistical Yearbook 2004 table 10.6.
