The pharmaceutical industry is one of the leading industries in the People's Republic of China, covering synthetic chemicals and drugs, prepared Chinese medicines, medical devices, apparatus and instruments, hygiene materials, packing materials, and pharmaceutical machinery.
China accounts for 20% of the world’s population but only 1.5% of the global drug market. China's changing health-care environment is designed to extend basic health insurance to a larger portion of the population and give individuals greater access to products and services. Following the period of change, the pharmaceutical industry is expected to continue its expansion.
The domestic pharmaceutical market is highly fragmented and inefficient. China, as of 2007, has around 3,000 to 6,000 domestic pharmaceutical manufacturers and around 14,000 domestic pharmaceutical distributors. The most often-cited adverse factors in the marketplace include a lack of protection of intellectual property rights, a lack of visibility for drug approval procedures, a lack of effective governmental oversight, poor corporate support for drug research, and differences in the treatment in China that are accorded to local and foreign firms.Nevertheless, China is reportedly expected to become the third-largest pharmaceuticals market in the world by 2011.
Research and development are increasing, with Shanghai becoming one of the most important global drug research centers. Most notably, Novartis is expected to establish a large Research and development base in Shanghai that will be a pillar of its drug development.
China's thousands of domestic companies account for 70% of the market, the top 10 companies about 20%, according to Business China. In contrast, the top 10 companies in most developed countries control about half the market. Since June 30, 2004, the State Food and Drug Administration (SFDA) has been closing down manufacturers that do not meet the new GMP standards. Foreign players account for 10% to 20% of overall sales, depending on the types of medicines and ventures included in the count. However, sales at the top-tier Chinese companies are growing faster than at Western ones.
China is the world's second-largest prescription drug market, according to a report released by pharmaceutical market research firm IMS Health. The report said that China's pharmaceutical revenue is growing fast and that the market there may double by 2013. Sales of prescription drugs in China will grow by US$40 billion through 2013, the report said. The value-added output of China's pharmaceutical industry increased 14.9% year on year in 2009, according to statistics released by the Ministry of Industry and Information Technology. In the first 11 months of last year, the medicine sector's combined net profit was RMB 89.6 billion, up 25.9% year on year. Growth in the period was only 16.2% in the period from January to August.
China has established a pharmaceutical industry structure, and has become one of the largest pharmaceutical producers in the world. The Chinese pharmaceutical industry has been growing at an average annual rate of 16.72% over the last few decades. However, the industry is still small-scale with a scattered geographical layout, duplicated production processes, and outdated manufacturing technology and management structures. The Chinese pharmaceutical industry also has a low market concentration and weak international trading competitiveness, coupled with a lack of patented domestically-developed pharmaceuticals. (Barnet Siu; 2010)
Investment conditions in China have improved due to the vast consumer demand for pharmaceuticals, the lower labor costs and the changes resulting from economic reform. Changes to the patenting laws in full compliance with the requirement of the Agreement on Trade-Related Aspects of Intellectual Property Rights (or "TRIPS Agreement") and the lack of Chinese pharmaceutical R&D have also left gaps in the market.
The domestic pharmaceutical industry has been a key contributor to the country’s impressive economic growth. As one of the world's major producers of pharmaceuticals, the sector achieved an annual compound growth rate of 16.7% between 1978 and 2003. Both far outpaced other economies in the world, making China the world's fastest growing pharmaceutical market. Although China has enjoyed the benefits of an expansive market for pharmaceutical production and distribution, the industry is suffering from minimal innovation and investment in R&D and new product development. The sector's economies of scale have yet to be achieved. Most domestic manufacturers in the pharmaceutical industry lack the autonomic intellectual property and financial resources to develop their own brand products. Most manufacturers rely on the repetitive production of low value added bulk pharmaceuticals and imitation drugs.
Quality is often poor, for example has Europe banned some APIs from Chinese drugmaker Zhuhai United where they found issues with aseptic manufacturing facilities and Huzhou Sunflower Pharmaceutical's plant in Huzhou, Zhejiang Province, where French regulators turned up contamination issues in its manufacturing processes, see Europe bans some APIs from Chinese drugmaker Zhuhai United June 22, 2015 By Eric Palmer
Zhejiang Huili Capsules Co., Ltd.
Huili Imports and Exports Co., Ltd.
Add：Ru'ao Industrial Zone, Xinchang, Shaoxing, Zhjiang, China
Contact：Mr Barney Wang , Mr Cage Wang
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