Competition in China’s generic drug market intensifies

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Competition in China’s generic drug market intensifies

Generics/General | Posted 01/12/2009 0 Post your comment

Patent protection for 35 kinds of the best-selling drugs is on track to expire by 2010, including medicines for the treatment of ulcers, hypertension and hyperlipemia. This is expected to have a major impact on the Chinese pharmaceutical industry, where generic drugs account for 97% market share. Industry analysts pointed out that although China has a large production scale of generic drugs, the level of technology remains relatively low. China is home to more than 6,000 pharmaceutical makers. Most of them battle it out at the low end of the price scale with the result that, the country’s profit margin in generic drugs is only equal to one-sixth of the international average.

Mr Wang Yong, a medical representative from a Shijiazhuang, Hebei province pharmaceutical company said the competition in the domestic drug market is becoming more intense, as there are even as many as a dozen brand names for a group of medicines consisting of the same ingredients. In addition to the challenges from domestic rivals, of even greater concern is competition and pressure from overseas pharmaceutical majors.

Shanghai Second Military Medical University’s Professor Yuan Junhui stated that there is still a big gap between domestic generic drugs and the international advanced medicines in terms of active ingredients, excipients, new technologies and innovative formulations. Taking aspirin as an example, there are dozens of dosage forms for different diseases in the United States, while the tablet is the only common dosage form in China.

China’s generic drug market is on target to further expand as competition intensifies. As patent protection for brand drugs from the world's pioneering pharmaceutical companies expire, generic drugs will immediately inherit the advantages. However, the development of new drugs in China still faces bottlenecks; as a result, the production of generic drugs remains an important part of the innovation strategy for Chinese makers.

In addition, favourable pharmaceutical policies put in place by governments the world over are expected to lower drug prices, which will broaden the demand for generics and further drive the development of the industry.

In China, the government’s medical reform plan focusing on improving healthcare areas across the country is laying the foundation for the boom in the generic drug market.

Reference:
Cindy Wu. Competition in China’s generic drug market intensifies. Asia Manufacturing Pharma. 2009 Sep 9.

Source: Asia Manufacturing Pharma