China in Urgent Need of High-End Overseas Pharmaceutical Excipients and Packaging Materials; a Market of Tens of Millions of Dollars

A series of harsh regulations have been issued by the Chinese government during the first half year of 2016, requiring all generic drugs already available in China to be reassessed on whether their clinical efficacy is consistent with that of imported brand-name drugs.

An attempt to enhance domestic generics’ safety and efficacy, to many, this move also demonstrates China’s determination to upgrade the structure of Pharma industry, to enhance domestic generics’ international competitiveness, and to alleviate the growing payment pressures on public health insurance, considering generic drugs’ competitive price advantage. 

While some argue the reason why domestic generics are far less effective than original drugs is because, back before 2007, obtaining official approval for drugs was much easier, others believe the major reason lies in the substandard quality of domestic generics’ choice of excipients and packaging materials compared to those used by their brand-name counterparts. 

According to statistics, excipient and packaging expenditures usually comprise more than fifty percent of all costs in the course of generic production. However, in China, domestic pharma products are far from in line with this international practice because with price dominating the bidding process of public health insurance system, manufacturers had every incentive to favor cheaper but lower-quality excipients and packaging materials than those used by the original drug.

On the other hand, for a long time, excipients, packaging, and drugs were evaluated and registered in separate systems in China, under the guidance of which, Chinese excipient market has long been featured by numerous small-sized companies of uneven qualities. 

Now with the new policy of evaluation and approval of excipients, packaging, and the drug as one inseparable entirety, on the surface it simplifies excessive procedures, when it actually raises the standard for excipients and packaging, and, by setting the benchmark, accelerates the upgrade of the whole excipient industry. 

The reassessment process’s high standard for generics’ dissolution rate and BE tests introduced by CFDA (China’s food and drug administrative agency) marked a remarkable transformation of the whole pharma industry. For not only does it mean that 289 varieties of drugs, more than 20,000 generic brands, and estimated over 3,000 pharma companies are forced to undergo efficacy reassessment by 2018.

But also, once failed in the reassessment competition, companies will be faced with even higher costs. Naturally, this will drive a boom for associated high-end excipients and packaging materials, a market predicted by experts to double to reach USD 15 million by 2020. 

Haibin Wang is the vice president of Hisun Pharmaceutical. In an earlier interview Ms. Wang expressed her concerns about whether generics with lower-quality domestic excipients would meet the dissolution standard set by the original drugs, and said that many Chinese pharma companies were in urgent need of high-end overseas products.

Also, according to a representative from Xinhua Pharmaceutical, imported packaging materials and the Chinese ones differ mainly in those that are in direct contact with active ingredients, such as plastic bottles, glass bottles, aluminum foils, etc.

Overseas forerunners are already on the move. International excipient giants like Meggle AG, Roquette Corporate, and Colorcon, Inc. have entered the market either through sole proprietorship or by joint venture. Other giants who hadn’t have set foot in China earlier, like Japan Japfou, also launched an office in China after attending CPhI China held in June, Shanghai, foreseeing the great potentiality of this booming market.


“Now for us Chinese pharma companies, the fair is more a place where we want to know about foreign products than merely a window to showcase and sell.

We do hope overseas companies can realize how much high-end excipients and packaging materials are expected here, in China.”

— Hua Jiang, Vice President of Luye Pharma


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