Yun-Tao Liu

According to the State Food and Drug Administration of China's (SFDA) South Medicine Economic Research Institute, Chinese medical and pharmaceutical products grew steadily during the first half of 2007 with gross income of 291.3 billion Yuan RMB (about $41 billion), a 21% increase from the first half of 2006. Pharmaceutical marketing sales in China reached to 267.7 billion Yuan RMB ($37.7 billion), up 21.75% from the previous year. The country's top pharmaceutical raw materials manufacturers yielded 395,000 tons in the first three quarters of 2007, with an increase of 5.3% in output but a 7% decrease in growth speed compared to the same period in 2006. Exports amounted to 173,000 tons, leading to another 0.6% increase compared to 2006. The proportion of exports, however, compared to the total output of pharmaceutical raw materials, accounted for 43.8%—nearly 5% lower than in 2006. 

Sichuan, China (CHINA: IMAGEMORE CO., LTD/GETTY IMAGES) 

show that Chinese production of antipyretic-analgesic and anti-inflammatory drugs and vitamins has declined. At the same time, production of central nervous system drugs has increased by approximately 20%.  

During the first three quarters of 2007, Chinese production of sterile powders for injections, including freeze-drying powder injections, equaled that of the same period of 2006. Capsule production increased only slightly while sustained/controlled-release tablet production increased by 75.7%. The types of dosage forms coming out of China increased from 12 to 17. In other SFDA statistics, injection and infusion solution production increased by more than 10%. 

Several years ago, there was a sense that China was set to become a research and development (R&D)center for the global pharmaceutical industy. The country had improved intellectual property rights, growing infrastructure, and various established medical and human resource companies. After Denmark's Novo Nordisk established an R&D center in Beijing in 1997, other multinational pharmaceutical companies soon followed, including AstraZeneca (London), Eli Lilly (Indiana), Roche (Basel, Switzerland), Bayer (Leverkusen, Germany), Novartis (Basel), and GlaxoSmithKline (London). 

This growth—and competition—led the Chinese government to change its approach to the industry. Rather than granting research assignments into new drugs to educational institutions and national scientific research, the government is now working in partnership directly with pharmaceutical companies and the market to establish joint R&D systems. Because Chinese firms still do not have as much capital to work with compared to multinational drug companies, their best bet in the R&D field has been to seek new delivery systems for current drugs on the market. For example, the chemotherapy injection drug paclitaxel (Taxol) was known to lead to some serious allergic reactions in some patients if it was manufactured with the surfactant Cremophor EL. To overcome this problem, SFDAapproved in 2003paclitaxel liposomes for injection and this has helped to alleviate the allergy issue.  

Another area in which Chinese companies have gained an advantage in the worldwide industry is traditional Chinese medicine (TCM). Last year, China's Ministry of Health, State Administration of Traditional Chinese Medicine, and 14 other ministerial departments under the State Council jointly issued a 15-year plan to take TCM to the global marketplace.  

Since then, SFDA has been working  to develop TCM regulations. In February, the agency announced that it will put more funds into establishing standards, improving technical systems, and developing quality control systems for the supply, production, and testing of TCM materials.  

As part of these efforts, a national database is being developed for standard Chinese medicine materials. In addition, as of January 2008, Chinese companies that do not have GMP (good manufacturing practice)-Pharmaceutical Certification from SFDA cannot manufacture the formulation of TCM-processed herbal slices. 

To date, product management and regulation of TCM is growing in a comprehensive and systematic way. Local companies such as Yunnan Baiyao (Kunming), Shineway (Shijiazhuang), and Tasly (Tianjin), which focus on manufacturing TCM products have been playing important roles in the industry. International companies, feeling confident about the future of TCM and attracted to China's rich medicinal resources and huge markets, have come to China in search of business opportunities. As a result, competition in TCM is expanding despite the concern of some that some unique or "sacred" techniques may be leaked. Only a handful of TCM techniques are protected according to the current Catalogue for the Guidance of Foreign Investment Industries (amended in 2007) issued by the State Development and Reform Commission and the Ministry of Commerce in October 2007. 

Overall, China's pharmaceutical industry is working to improve its reesearch, product quality, and global reach. Independent innovation of new drugs, development of high-quality generics, and modernization of traditional Chinese medicine will enhance the country's ability to compete despite ongoing challenges.  

New regulations, including a Dec. 2007 Memorandum of Agreement signed with the United States, will reinforce these efforts and provide safer production for the public. At the same time, China's market is attracting more multinational pharamaceuitcal companies to set up facilities.  

based in Beijing and Wan-Liang Lu is a professor at Peking University's School of Pharmaceutical Sciences in Beijing.

Articles

Although there have been recent setbacks for China with regard to exported products, the country has made substantial strides in its pharmaceutical industry over the past few years. Intense competition and a series of new regulations seem to be moving the country into a period of recovery.