Chinese Premier Li Keqiang recently announced that China will cancel most of the drug price controls, so that the price will be determined by the market given – even though a specific timetable has not been determined. China may also make profit-margin regulations, and the price cap to ensure that the medicines available and affordable. This policy change is because China is working to strengthen the supervision and control of the pharmaceutical sector in order to improve the quality of drugs, increase transparency, and promote the development of domestic pharmaceutical companies. In addition, the government may soon allow the drug can be sold through online pharmacies. Drug consumption accounts for about 45% of China’s health spending in 2014.
At a time when Indian pharmaceutical’s over-dependency on Chinese market for raw materials is a rising concern, Chinese companies are showing interest in sourcing medicines from India, especially anti-cancer drugs from Gujarat.
China is already the world’s third-biggest market, behind only America and Japan, and is likely to consume $75 billion-worth of medicines this year. Sales have been growing at a compound annual rate of nearly 25% since 2009. Rising incomes and rapid ageing mean that demand for drugs should continue soaring. The expansion of publicly funded health insurance should also, in theory, bolster demand.
Viagra’s patent in China has expired and some analysts expect cheaper prices will bring a surge of demand for the storied erectile dysfunction (ED) drug.
“China ED drugs market is an appealing cake with large profits,” said Dr. Neil Wang, China managing director at Frost & Sullivan, in emailed comments. “The launch of generic alternatives into the market will lead to intense competition.”
The size of the potential sales increase in China could be huge. Sales of ED drugs could triple to as much as 5 billion yuan ($810 million) by 2018 from an estimated 1.7 billion yuan in 2013, Citigroup estimated in a recent report.
1. Overview of Drug Administration in China
1.1 Regulatory Affairs Profile
China has established a quite streamlined drug regulatory system from nearly zero base during the last thirty years along with its national policy of reform and opening-up. SFDA and its affiliates play a key role in this system; they make decisions on approvals, additional requirements or exemptions. However, there are still many defects and loopholes in both process and regulations such as that provisions and guidelines are found vague or lack of explanations; and these flaws are part of the reason that regulation time takes longer than other countries. Knowing its deficiency, Chinese regulatory system is continuing evolving; it is trying to keep up with the standards of EU, USA and Japan.