No markets are hotter in today's lackluster global economy than emerging markets. As advanced economies around the world slog through recession and slow recoveries, developing nations from Indonesia to China boast swelling middle classes and rising GDPs that have investors salivating at the prospects for their stocks.

China's the biggest story out of the world's top emerging markets, but how is the globe's second-largest economy paying off for big pharma's biggest names -- and who's set to dominate this market in the future? Let's take a look at the companies and stocks set to ride China's growth into a lucrative future.

A market on the move
The potential of China's pharmaceutical market is hardly a surprise. A report  from China's Social Science Academic Press last year estimated that total Chinese pharmaceutical sales will exceed $350 billion by the year 2020. Already, China's the third largest market behind the U.S. and Japan and is expected to surpass its Asian neighbor for the No. 2 spot by 2015.


Demographics play a big hand in why China's so valuable to big pharma firms. The country's population is aging quickly due to Beijing's one-child law, creating a sizable elderly class to come in future decades that will rely more on pharmaceuticals. Additionally, China's middle-class boom will make established medicines developed by big pharma firms and others more available to larger quantities of Chinese citizens in future years, particularly with the population's shift toward cities.

Not every trend in the world's second-largest economy is helping big pharma's best, however. While Chinese patent law is more advanced than many developed nations', the country still faces challenges in developing intellectual property rules that will live up to those found in regions such as Europe or North America. With the pharmaceutical industry so reliant on a foundation of patent law to thrive, China's nowhere near as safe a bet for launching new drugs without finding copycats emerging.

Additionally, Beijing has pushed for cheaper drug prices in order to make products more wildly available to its still-growing populace. The government has rallied behind generic drugs to spread across the market while also strongly recommending that pharmaceutical firms offer discounts on major drugs in order to wade into China's sizable market. While margins may shrink for companies doing business in China, the economies of scale are still too significant to pass up. China only boasts the largest population in the world, after all.

Big Pharma's best in China
So with China's pros and cons as a big pharma hub in mind, which stocks are the best for your portfolio to take advantage of this growing market?

Novo Nordisk is one of the best examples of how a company has succeeded in China. It has dominated China's diabetes market -- a market that  Novo Nordisk estimated at 93 million total diabetic Chinese patients last year. With diabetes prevalence rising in China, Novo has carved out a 37% market share in the niche, more than double that of its nearest rival, Bayer. Novo's Chinese sales grew by 28% last year, and if the company can maintain its hold in the diabetes market, its stock -- which has slumped into the red in 2013 but is up nearly 150% over the last five years -- will rise on the back of China's growing pharmaceutical needs.

That diabetes market isn't just attractive for market leader Novo; after all, rival Merck boasts one of the world's best drugs in blockbuster diabetes therapy Januvia that sold more than $5 billion last year. Merck has already seen the winds shift in China's direction: The company has opened three manufacturing plants in the nation already as of April, part of Merck's commitment in 2011 to invest $1.5 billion in China. Merck's a big and diversified enough company that other factors will influence its stock more in the short run -- particularly patent-related sales losses for blockbusters such as Singulair -- but in the long term, its China moves could pay off in a big way.

Pfizer's another big pharma player to watch, particularly with its recent action in the M&A world. Pfizer's one of the industry's strongest stocks, and emerging markets have recently become important to the company's finances. Around 20% of Pfizer's total sales last year came from emerging markets, and with Pfizer already holding a minority stake in one of China's top drug distributors, Shanghai Pharmaceuticals, Pfizer's one to watch going forward in this hot market.

Perhaps the best-positioned stock to thrive in China's low-cost pharmaceutical market is generics titan Teva Pharmaceuticals , however. Teva's a relative latecomer to the China scene, but company CEO Jeremy Levin has indicated  that his company's portfolio is a good match for the Chinese pharma scene. Indeed, with Beijing's push for cheaper drugs, Teva's dominance in the generic landscape seems tailor-made to find acceptance with cost-conscious Chinese regulators. If Teva takes a bigger step into this market, it could stumble into a windfall.

The long-term investor's best friend
China's still growing, but this market's already one of the most potentially lucrative markets worldwide -- and it's only getting bigger every year. Despite China's slowdown, nothing's stopping demographic changes and urbanization that have dominated the country's rapid rise recently -- and big pharma stands to profit. Keep an eye on China's pharmaceutical leaders; tomorrow's winning stocks could be born in this health care gold mine. For the long-term investor, there are few markets on the cusp of greatness like this one.

China's long-term demographic trends are a boon for smart health care investors -- and the best investors know that buying for the long term is the best way to become rich. But China's not the only way to buy into the big picture: The Motley Fool's exclusive report "3 Stocks That Will Help You Retire Rich" names specific investment opportunities that could help you build long-term wealth and retire financially safe and secure. The Fool also outlines critical wealth-building strategies that every investor should know. Click here to keep reading.

The article China's Coming Big Pharma Boom originally appeared on Fool.com.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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