China's new path for upgrading generic drugs

Business Club December 21st took advantage of the rare opportunities in the next five years to realize the transition from a generic pharmaceutical giant to a generic pharmaceutical giant. It is a major task for the Chinese pharmaceutical industry.

There are at least two directions for Chinese companies to realize the internationalization of generic drugs: first, to grasp the opportunity of the peak period of world patented drugs, improve quality standards, and enter the high-end markets in Europe and the United States; on the other hand, to develop anti-malaria, tuberculosis, and AIDS. In the area of ​​infectious diseases, actively participate in international bidding and procurement, and enter markets in Africa and other developing countries

With the rapid expansion of the international generic pharmaceutical market, it is increasingly important for China to seize opportunities in the face of overcapacity and increased homogenization of pharmaceuticals.

In order to better build a domestic and international exchange platform, the “China generics industry international development strategy seminar” sponsored by the China Pharmaceutical Association and the China Pharmaceutical Industry Research Promotion Association (hereinafter referred to as “China Pharmaceutical Promotion Association”) was held in Shanghai recently. A total of more than 100 people including international organizations such as the World Health Organization and the United Nations International Drug Procurement Mechanism Organization, representatives of domestic research institutions, and pharmaceutical companies attended the conference.

Participants reached a consensus that Chinese companies will vigorously develop generic drugs, and the path to internationalization will have at least two directions: First, to grasp the opportunity of the peak period of world patent medicines, improve quality standards, and enter the high-end markets in Europe and America; on the other hand, It is to expand the field of infectious diseases including malaria, tuberculosis, and AIDS, actively participate in international bidding and procurement, and enter African and other developing countries.

New long-term

The rapid development of the generic pharmaceutical market in recent years has become an indisputable fact. “The global generic pharmaceutical market capacity in 2013 is expected to be as high as 250 billion US dollars, and the expected growth rate is 13%.” Senior Partner, Ai-Kai Consulting Co., Ltd. He said.

The rapid growth of the market stems from many factors. Lin Jianning, director of the Southern Medical Economic Research Institute, pointed out: "The proportion of total health expenditures in developed countries in GDP has increased, and the government has reduced the burden by encouraging the use of generic drugs." In fact, developed markets (including the United States, Germany, and the United Kingdom) The government is taking steps to stimulate the development of the generic market. On the other hand, a large number of drug patents expired will bring opportunities for generic drugs. “It is expected that from the year 2010 to 2014, there will be a total of US$209 billion worth of patented drugs that will expire, giving generic drugs a huge market opportunity.” Lin Jianning Indicated.

The industry generally believes that emerging markets represented by China and India will become a new round of growth in the generic drug market. In addition to the steady development of China’s macro economy and the continuous increase in the total cost of health, various policy factors have jointly promoted the further development of China’s domestic generic medicine market. Lin Jianning believes: “The basic drug system is steadily implemented, and the vast majority of essential drugs are generic. Exploring the reform of medical insurance payment methods from project-paid to total-prepaid systems is beneficial to domestically-made generic drugs with better treatment cost-effectiveness ratio; drug pricing reforms that tend to cancel super-national treatment of patent expired drugs from joint venture foreign-funded enterprises It is beneficial to improve the competitive advantage of domestic brands' generic drugs.” In his opinion, there are three major trends in China's generic drugs market: “The first is the high quality trend, and eventually there will be some high-end generic pharmaceutical giants in the country; It is a trend to grab the first copy of medicine, this trend will increase our market concentration; third is the increase of internationalization, the process of internationalization of generic drugs will accelerate, and will gradually enter the international mainstream market.”

Xu Ming, director of the General Department of the Chinese Medicine and Health Products Import & Export Chamber of Commerce, said: “The next five years, the entire generic pharmaceutical industry will win a new period of growth.” But he reminded domestic generic pharmaceutical companies, will face from three levels Competition: The first level is competition from non-branded generic drugs. India, whose industrial structure is very similar to China, will challenge our country. The second level will be large-scale production brand generic pharmaceutical companies. We will enter the high-end market and we will face This competition from the second team; the third level of competitors, mainly those based on the original research medicines, with a large number of heavy patent drugs expire, they will enter the field of generic drugs.

Internationalization strategy

In the field of generic drugs, domestic and foreign markets are showing characteristics of multi-games. For China, despite being a major pharmaceutical country, it is also facing a large number of same-type production enterprises, excess production capacity, serious repetitive production, lack of understanding of international access conditions, and no major breakthroughs in drug varieties entering the international market. There is a series of problems such as the lack of internationally certified products and experience in the operation of international markets. In response, Song Ruilin, executive president of the China Pharmaceutical Industry Research and Development Promotion Association, reminded domestic enterprises to pay attention to the demand for drugs in developing countries and Africa. “The pharmaceutical industry in these places is still very underdeveloped and has long been underserved and seriously ill. In order to alleviate these problems, the World Health Organization, the Global Development Fund, and relevant United Nations agencies have procured and provided local people with urgently needed medicines for Africa and other developing countries, and promoted the pharmaceutical industry in China to improve quality standards. It is very necessary to participate in international bidding, use existing production capacity to reach the international market, and realize the strategic transfer of China's pharmaceutical industry from the domestic industry to the international industry."

In fact, several international organizations including the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), the Global Agency for the Control of Drugs against Tuberculosis (GDF), UNITAID, and the United Nations Industrial Development Organization (UNIDO) have They have extended their olive branches to Chinese companies in the hope that they can help domestic companies learn more about the relevant international procurement and certification procedures in order to help companies develop a wider international market while satisfying the demand for drugs in some developing countries.

With the international community generally agreeing that China has the advantages of “a solid base of raw material medicines, most of which have infrastructure, mass production capacity, and low drug and medical treatment costs”, in order to smoothly pass relevant certifications and international tenders, the United Nations International Drug Purchase Experts of the mechanism organization suggested that Chinese enterprises should “understand the international quality system; develop innovative new drug substances or pharmaceutical preparations; establish joint ventures with existing generic drug manufacturers; consider technology transfer or establish joint ventures with local manufacturers in high-burden countries. ”