TCM Law to be Introduced Soon! A Market worth RMB 1 Trillion to Come!

TCM Law is finally coming!

Wang Guoqiang, Deputy Director of National Health and Family Planning Commission of the P.R.C. and Commissioner of State Administration of Traditional Chinese Medicine of the P.R.C., revealed publicly on November 23, “The TCM Law (Law of the People’s Republic of China on Traditional Chinese Medicine, hereinafter referred to as the TCM Law) is to be introduced soon”.

This means that the TCM Law will formally become the first national law on the traditional Chinese medicine (TCM) drafted by China, and predictably there will be good news for the TCM industry worth RMB 1 trillion comprehensively.

As revealed by Wang Guoqiang,the TCM legislation has taken into account the protection of precious Chinese medicinal materials, and also includes medical treatment, culture and private hospitals, etc. The draft of the national TCM Law of China is currently sought for opinions from each province and municipality, and will be submitted to the National People’s Congress of China as soon as possible if everything goes well.

 “Dividends” year of TCM

The TCM industry has ushered in policy dividends intensively almost throughout 2016.

The Outline of Strategic Planning for the Development of Traditional Chinese Medicine Industry (2016-2030)issued by the State Council of China in February clearly puts forward that 2030 will witness the significant enhancement of the health service ability of TCM—“the synergistic effect in the treatment of major diseases and the core effect in disease rehabilitation will be fully exerted”.

The 13th Five-year Plan for the Development of Traditional Chinese Medicine formally issued by the State Administration of Traditional Chinese Medicine of the P.R.C. in August has elevated the TCM industry to the position of “important pillar industry to the national economy”.

The Plan further prescribes the clear growth target—the main business income of TCM enterprises above designated size grew from RMB 317.2 billion to RMB 786.7 billion during the 12th Five-year Plan period, with the average annual growth of 19.92%; the main business income of TCM enterprises above designated size is expected to continue to maintain rapid growth during the 13th Five-year Plan period, with the size and income expected to reach RMB 1.5823 trillion in 2020, and average annual growth expected to reach 15%.

 “Amnesty” of classic formulas: not required for clinical trial

The TCM Law (Draft) was conducted the second review in August this year. The second review draft further strengthened the supervision and administration of planting and breeding and circulation and use of the Chinese medicinal materials as well as the processing of TCM decoction pieces and preparation of TCM preparations, etc., and mentioned that in the application for pharmaceutical product approval number of the TCM compound preparations derived from ancient classic formulas and with production meeting conditions, enterprises can provide non-clinical safety research data only.

This undoubtedly will simplify the procedure for the approval and marketing of TCM, and become a cardiotonic agent for relevant enterprises and industries.

The “ancient classic formulas” defined in the second review draft refer to the “formulas that are recorded in the ancient TCM classics and are still widely applied with definite efficacy and distinctive features and advantages”. The specific list will be made by the department of China’s State Council in charge of TCM in consultation with pharmaceutical product supervision and administration department.

As shown by the public data, formulas are mostly used in TCM treatment; there are nearly 100 thousand formulas documented in the history of China, with the famous formulas including the formula of Niuhuangqingxin pills, one of the top 10 famous drugs of Beijing Tongrentang, sourced from the “Niu Huang Qing Xin Yuan” in Song Dynasty Formularies of the Bureau of People’s Welfare Pharmacies; Yunnan Baiyao was created in 1902 by the famous Yi nationality doctor Qu Huanzhang based on Yi nationality folk medicine and by absorbing the medicine practicing and drug use experience of horse caravan and usingCompendium of Materia Medica and South Yunnan Materia Medica, etc. for reference.

Broad rally, TCM leading enterprises to “take off”

The TCM industry, under the stimulus of a series of high-frequency and high-standard policies, ushers in the “bright spring”.

There were 3813 TCM manufacturing enterprises in 2014 with the total output of TCM industry of RMB 730.2 billion, as shown by the data. China’s focus on TCM industry will first benefit the enterprises with R&D and innovation abilities in pharmaceutical products and high-end devices and possessing high quality generic drugs.

Also, leading companies strong in the advantage of integration of protected traditional varieties and industry chain, including Dong-E-E-jiao, Tongrentang, Yunnan Baiyao, Tasly and Kangmei Pharmaceutical, etc. will also first benefit from the policy dividends.

In fact, representative enterprises have started to conduct layout in advance in succession, in face of the series of policy adjustments in recent two years.

According to public data, the core variety Danshen Dripping Pills of Tasly, a company focusing on the modernization of TCM, will be completed the global multi-center Phase III clinical trial in advance, and many varieties of Tasly are expected to enter the adjusted national medical insurance catalog of China.