General Market Trends:
China remains the major emerging market for multinational pharmaceutical firms. According to the American Cancer Society, there is a rise in cancer prevalence in China. As a results, the Chinese pharmaceutical market potential is expanding and is attracting international companies focusing on Oncology to China. Cancer is the number one cause of death in China, due to outdoor and indoor air pollution, soil and water contamination, smoking rates and unhealthy lifestyles. Besides, there is a growing middle class and reform of the China’s health insurance sector as outlined in the country’s 13th Five-Year Plan (2016 – 2020) lead to more affordable medication and promising sales prospects. Other areas identified for growth with new opportunities are paediatrics and fertility, as there is new focus on supporting a two-child policy.
Finished Dosage Formulations:
The China Food and Drug Administration (CFDA) is introducing reforms to support innovative drugs, aiming to speed up approvals and accelerate access to patients. The reform implies that data from clinical trials conducted outside the country will now be accepted as part of the regulatory filings by the CFDA, thus removing the need to conduct additional trials in China. This results in revenue opportunities for multinational drugmakers, who will be able to secure approvals (faster) and increase their access to the Chinese drug market.
The Chinese excipient market is expected to more than double in the next 5 years and is seeing continued investments from foreign companies like Colorcon, Meggle, Roguette and Degussa, who have all set up in China. Volumes of excipients from markets like China are expected to outpace volumes from North America and Europe. However, reports from market sources also note that China still relies heavily on the import of film-coated powder, PVP and other new, high-end pharmaceutical excipients to make up the shortfall in lack of expertise and resources.
On August 10 2016, China Food and Drug Administration (CFDA) announced that the approval of pharmaceutical excipients will be switched from the former system of separate approvals to a process whereby excipients are reviewed as part of a drug product application. An excipient included in an approved drug product can still be used regardless of whether or not is has a license, but if an excipient without a license is included in a new drug application, it must follow the new process. The expiry date of an excipient’s license under the historical process is extended to 31 December, 2017, so from 2018 forward (or by the expiry date), all excipients need a dossier meeting the requirements for a new drug application. In case you are interested in finding out more about this topic and new process, make sure to attend CPhI China 2018 in Shanghai which will offer a dedicated content and market updates in relation to excipients.
APIs, Intermediates, Fine Chemicals & Intermediates Market:
China is a great sourcing destination for APIs. It has a talented pool of scientists and engineers, a low cost base, better infrastructure than India, and an improving GMP and patent protection environment. It has easy access to a wide variety of intermediates and chemicals. Where China leads, and in some cases has overtaken India, is in classes of fermentation-based APIs, steroids, intermediates and many base chemicals. Challenges in the Chinese API sourcing market are the rising costs for labour and environmental compliance. Since India relies on China for many APIs and advanced intermediates, the costs will also rise in India. We also expect to see an improvement in the quality and technical packages from many Chinese companies.
Pharmaceutical Packaging Market:
According to the latest market reports, the Chinese pharmaceutical packaging market size increased year by year at CAGR of 11.2% during 2010 – 2016. From 2017 to 2021, the market size will maintain the growth rate of about 10% and is expected to be worth RMB 140bn in 2021, thanks to severe aging, the released two-child policy, the rapid development of biological agents and supporting policies. The market integration of more than 1,500 small and scattered Chinese pharmaceutical packaging companies is driven by Guidance on Speeding up Corporate Mergers and Acquisitions of Key Industries and other policies. Local enterprises develop high end standards for pharmaceutical packaging and intensified R&D. New types of packaging materials emerge, which affect storage stability, user safety and are environmentally friendly.