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The generics market in China Posted 04/04/2014

Market access barriers remain the main challenge for generics in China, according to a presentation by Xianghong Shao given at the International Generic Pharmaceutical Alliance (IGPA)’s 16th Annual Conference, which was held in Brussels, Belgium, 9–11 December 2013 [1].

The Chinese pharmaceuticals market is expected to become the second biggest market in the world in 2014 and will contribute 31% of global pharmaceuticals market growth between 2012 and 2016. Factors influencing China’s growth include healthcare reform, which intends to provide universal healthcare to the country’s 1.3 billion residents [2], and the country’s increasingly wealthy and ageing population. In 2020, China is forecast to spend US$1 trillion on healthcare.

Under-diagnosis of diseases and their treatment present a significant challenge for the country and a significant opportunity for pharmaceutical companies. In China, there are an estimated 247 million people with dyslipidemia (an abnormal amount of lipids, e.g. cholesterol and/or fat, in the blood), but only 5% are diagnosed and treated. Whereas for depression there are estimated to be 89 million Chinese suffering from the condition, but only 3% are diagnosed and treated.

Most prescription drugs in China are sold through hospital pharmacies (78%), with only 22% being sold via retail pharmacies. Generics make up the vast majority of the prescription drugs sold in China. In 2011, generics accounted for 86% of prescriptions and 75% by value. In China, off-patent originator and generic drugs account for > 90% of the total pharmaceuticals market share (volume), with a compound annual growth rate (CAGR) of 24% in the last five years. This makes China’s off-patent originator and generic drug market the second largest in the world by volume.

Market access remains the big challenge for generics launched in China. Just to get through the regulatory approval stage takes on average four years in China compared to only two and a half years in the US. Then follow procedures for pricing approval, provincial bidding and listing on hospital formularies, which can take on average five months, eight months and 12+ months, respectively.

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References

1.   Xianghong S. China generic market overview. 16th Annual IGPA Conference, Brussels, Belgium, 9-11 December 2013.

2.   GaBI Online - Generics and Biosimilars Initiative. China’s Healthcare reform in 2010 [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2014 Apr 4]. Available from: www.gabionline.net/Policies-Legislation/China-s-healthcare-reform-in-2010

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