Chinese health authorities are trying to figure out the reason for the rapid rise in a form of lung cancer that develops deep in the lungs and is not associated with smoking. China has seen a sharp increase in the disease over the past 10 to 15 years, hitting groups traditionally not susceptible, such as women and non-smokers, said Xue Qi, Deputy Director of thoracic surgery at the Cancer Hospital of the Chinese Academy of Medical Sciences. “It might be related to the longterm exposure to air pollution, particularly PM2.5,” he said. China’s top health authority has been watching people’s health in relation to air pollution since 2013, said Mao Qun’an, Spokesman for the National Health and Family Planning Commission. “We need more research over a longer time to figure out the longterm health effects of air pollution,” he said. “Cancer is developed over a long period, not overnight.” Latest cancer statistics from the government showed China recorded nearly 4.3 million new cancer patients in 2015, and more than 730,000 of them had lung cancer, accounting for nearly 36% of the world’s total, the China Daily reports.

Despite recent controls on capital outflows, Chinese healthcare and life science companies will continue to find ample opportunities for mergers and acquisitions (M&As) abroad, according to a report by Deloitte Touche Tohmatsu. The recent slowdown in health-related M&A notwithstanding, Chinese overseas investments will accelerate, especially in medical equipment and related services, given the inadequate research and development capabilities at home, expectations of the renminbi’s depreciation, and overvalued domestic M&A targets, according to the report. Simon Li, Counselor at Anjie Law, said controls on capital outflows are meant to rein in irrational or speculative overseas investments in real estate, hotels, entertainment and sports clubs. Such policies won’t affect the healthcare industry much. The Chinese government is keen on implementing the “Healthy China 2030” program, he said. “Through overseas investments, Chinese companies can rapidly obtain sophisticated technology and equipment, thus improving the level of China’s medical industry,” Li said. Overseas investments by Chinese companies in the medical sector fell to just 10 deals worth USD1 billion in the fourth quarter of last year, and to nine deals worth USD1.26 billion in the first quarter of this year. In 2016, 29 Chinese pharmaceutical companies clinched outbound M&A deals worth USD56.67 billion, significantly surpassing USD34.42 billion in 2015.

Public hospitals in China will operate under a new system not driven by profits by 2020, according to a guideline by the central government. Public hospitals are the main provider of healthcare in China. These hospitals, which numbered more than 12,700 by the end of last year, provided 2.85 billion outpatient and emergency services last year, accounting for more than 87% of the total, according to the National Health and Family Planning Commission. Private facilities accounted for the rest. The government will increase funding to public hospitals and help them repay loans so they can retain a non-profit status. Health authorities also will establish a new merit evaluation system for Presidents of public hospitals that is not profit-oriented, highlighting the quality of medical services, cost control and satisfactory ratings from patients. The practice of markups for medications, which has been practiced in public hospitals in China for decades, will be abolished in all public hospitals before the end of September, the China Daily reports.

China’s health supplement market is forecast to be worth CNY180 billion by 2020, up from CNY120 billion in 2015, according to a report published in May by consulting firm Roland Berger. Foreign firms are becoming more interested in the market. Their main sales channels in China are e-commerce platforms like Taobao, allowing them to bypass local regulations on health products and avoid local taxes. In 2015 Australian vitamin company Swisse generated more than CNY700 million in sales on Tmall, the e-commerce platform of Taobao, making it the most popular nutrition brand on the site. However, foreign brands selling products in China are now required to pay import tariffs and comply with a pre-approved import list under a series of new regulatory changes. In April this year, Beijing announced updated guidance on cross border e-commerce that directly affect bonded warehouses, where international brands ship merchandise for sale to Chinese consumers without being subject to normal import duties or quality checks. Under the changes, bonded warehouse products face tariffs ranging from 1.9% to 11.9%, and the list of overseas products which could be purchased online and distributed through bonded warehouses without registration with the China Food and Drug Administration (FDA) has been shortened, the South China Morning Post reports.

China has joined the International Council on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use, which focuses on guidelines for worldwide pharmaceutical development. Joining the council means the Chinese drug regulatory authorities, pharmaceutical industry and research and development institutes will gradually adopt internationally accepted standards and guidelines, and promote quicker domestic application of new drugs developed in other countries. China is the second-largest market for pharmaceutical products in the world. Annual revenues of the pharmaceutical industry in China exceed CNY2.5 trillion, and annual exports of pharmaceutical products exceed CNY13.5 billion. The authorities will encourage medical institutions to give priority to new drugs that have proved effective and are reasonably priced. Certain types of drugs and medical equipment already in use in other countries, such as those for curing rare diseases, can also gain priority approval for sale in the domestic market, according to a draft regulation, the China Daily reports.