NEW YORK — China’s fast-growing drug market is a huge draw to Western pharmaceutical companies that are seeking collaborations with Chinese companies to address the specific healthcare needs of the Chinese people.

Meanwhile, one Chinese drug company is making inroads in the United States market.

Huahai Pharmaceuticals wants to set itself apart from other local companies by planting a footprint in the US market. It became the first Chinese company to get Food and Drug Administration (FDA) approval to export its pills to the US in 2007.

China is now the world’s third-largest pharmaceutical market and is expected to grow 25 to 27 percent to more than $50 million this year, according to the healthcare consultancy IMS. China is also expected to surpass Japan to be the world’s second-largest medicine market after the US by 2016.

The growing middle class and demand for better healthcare are attributed to such “incredible growth”, although the expansion of healthcare systems by the Chinese government certainly plays a significant role, said Yin Xudong, chairman of Novartis China.

Yin added that more than 90 percent of the population of 1.3 billion people are now covered by some form of health insurance, thus making medicine more affordable to the Chinese people.

Boosting the pharmaceutical industry is part of the healthcare reforms under the 12th Five-Year Plan (2011-2016). The Chinese government recently announced its decision to increase spending on healthcare by 16.3 percent this year to around $26 billion.

An aging population and different lifestyle choices have made chronic diseases the biggest burden. Lung cancer, stroke, heart disease and diabetes account for more than 80 percent of all deaths in the country, according to Yin.

In 2009, Novartis announced it would invest $1 billion in research and development in China over the next five years that included a significant expansion of the Novartis Institute of BioMedical Research in Shanghai. Novartis also invested $250 million to build a new global technical center in Changshu to develop and manufacture active pharmaceutical ingredients (API).

In March, Novartis expanded its presence in the Chinese vaccine market by acquiring an 85 percent stake in Zhejiang Tianyuan Bio-Pharmaceutical Co Ltd, one of the largest private vaccine companies in China.

Partnerships with the Chinese government and local and multinational pharmaceutical companies will be a critical part of Pfizer’s expansion in China, said Evan Goldberg, director of strategy and business development for Pfizer China.

In 2009, Pfizer acquired Wyeth, a manufacturer of over-the-counter drugs based in New Jersey. The two are operating as one entity in China. “Wyeth definitely enriched Pfizer’s portfolio in the area of vaccines, medicine for mental health and other biologics for the China market, while Pfizer has a bigger and stronger marketing presence in China,” said Goldberg.

Pfizer, which has been in China since 1980, aims to build a stronger position in vaccines and biologic medicine, and to go into new cities and rural areas.

The government’s support has made China’s pharmaceuticals grow faster in lower-tier cities and the countryside than the major cities, said Goldberg.

Pfizer recently forged two significant partnerships with Chinese companies. In January, Pfizer announced a joint venture with Zhejiang Hisun Pharmaceuticals to manufacture high quality branded generic drugs. In China, branded generics account for 60 percent of the domestic market.

“The two companies can build a generic drug business in China that really stands out from the local pharmaceutical companies giving customers confidence in the high quality of our medicine,” said Goldberg.

In April, Pfizer signed a Memorandum of Understanding with its top distributor, Shanghai Pharmaceutical Co, to explore business opportunities in China. This partnership matches Pfizer’s capabilities in developing innovative medicines with Shanghai Pharmaceutical’s reach in the China market.

“Our intent to explore a range of business opportunities with Shanghai Pharmaceutical is an example of our commitment to expand our presence in China in collaboration with the local industry,” said David Simmons, president and general manager of emerging markets and established products at Pfizer, in a statement.

Although China’s drug market abounds with immense opportunities, homegrown Huahai established its first US operation in October 2004. Based in Cranbury, N.J., Huahai US Inc began by supplying API to some of the world’s leading pharmaceutical corporations such as Novartis and Merck.

Today, the company is selling its first cardiovascular pill in the US. According to Du Jun, CEO of Huahai US, the company expects to launch more than 50 products over the next five years. Huahai is also the first Chinese company to compete with Indian pharmaceutical companies in the US.

“A generic drug made by a US company used to be about 70 percent of the price of a branded drug. When India broke into the US market, the price of its generic drug was about 10 percent of the branded drugs. Now, Chinese companies can offer even lower prices,” said Du.

According to Du, Huahai is investing heavily in its domestic market. At the same time, it is trying to go global.

“You need to have a global perspective. No matter how fast the China market is growing, the US pharmaceutical marketis still No 1 in the world. We need to have a presence in the US. The potential for Chinese drugs in the US is huge. This is just a start,” said Du.