(Corrects company name and RIC to Merck KGaA in para1, deletes reference to Merck in para 6)
* China market could by world's second-biggest by 2016
* Healthcare spending forecast to hit $1 trillion by 2020
* Major drug companies investigated on pricing, corruption
* International firms can't afford to stay out ofChina-lawyer
SHANGHAI, Nov 15 (Reuters) - German drugmaker Merck KGaA has invested 80 million euros ($107.67 million) in amanufacturing plant in China, the company said on Friday,underlining the importance of the market for global drug firms.
The Shanghai-based facility will come online in 2017,producing drugs to treat China's fast growing number ofdiabetics as well as cardiovascular and thyroid disorders,Merck's biopharmaceutical unit said.
Spending in the country's healthcare sector is forecast tonearly triple to $1 trillion by 2020 from $357 billion in 2011,according to McKinsey, which has prompted many firms to investin Chinese facilities and set up joint-ventures with localcompanies.
The investment comes as international drug companies havecome under pressure in China this year with authorities clampingdown on the high price premiums many of them enjoy and a numberof drugmakers have been caught up in corruption allegations.
British drugmaker GlaxoSmithKline is underinvestigation over allegations it funnelled up to 3 billion yuan($492.43 million) to travel agencies to facilitate bribes todoctors and officials to boost its drug sales.
Large international drugmakers Novartis AG,AstraZeneca Plc, Sanofi, Eli Lilly & Co and Bayer AG have also been questioned byChinese officials this year.
Drugmakers have seen their sales suffer in the wake of theprobes, with many Chinese doctors refusing to see drugrepresentatives for fear of being caught up in the wideningscandal.
GSK's third-quarter China sales fell 61 percent, whileSanofi lowered its 2013 profit guidance on China weakness.
Industry insiders said that despite any roadbumps,international drug firms would be unlikely to turn their back onChina, which is set to be the second-biggest drugs market behindthe United States by 2016, according to IMS Health.
"In 10 years it's conceivable that China will become thelargest pharmaceutical market in the world," said Benjamin Bai,Shanghai-based partner at law firm Allen & Overy. "Do you think(drug firms) can afford to get out of China? No, even if it'sdifficult, they will find a way to adapt."
($1 = 6.0922 Chinese yuan)
($1 = 0.7430 euros)
(Reporting by Adam Jourdan)