Pharmaceutical Industry in China: Policy, Market and IP

Abstract

This chapter provides a three-prong investigation framework on Chinese pharmaceutical industry, namely, policy structure, market structure and IP (patentbased) structure. The Chinese pharmaceutical industry has been developing fast in market size and revenue volumes. However, the scale of Chinese pharmaceutical companies is relatively small, and the market concentration is low. Therefore, local pharmaceutical companies with higher R&D input are generally less profitable. Although there is increase in the number of patented drugs in the pharmaceutical industry in China, patents have made relatively low contribution to the industrial values, and IP held by Chinese firms is less competitive compared with that of foreign companies. Most of the pharmaceutical enterprises in China still focus on generic drugs. Market regulation of the pharmaceutical industry in China is relatively strict, especially market entry and price control. A detailed comparison between Chinese and Indian industry is given by this chapter.

Monoclonal antibodies and Fc-fusion protein biologic medicines: A multinational cross-sectional investigation of accessibility and affordability in Asia Pacific regions between 2010 and 2020

“…However, the high uptake of biosimilar and rapid growth of biologics consumption, suggested by CAGR, still cannot fully boost the per 1000 inhabitants’ biologics consumption in MIE, particularly for LMIE. This may be caused by several reasons: 1) high needs of biological medicines in MIE but restricted access to the bio-originators due to high cost of products; 25 2) the enhanced capacity for biosimilar manufacturing and beneficial regulation for biosimilar research, development and approval in these countries cannot outweigh the great unmet needs of biologics medicine; 25 and 3) large population size in LMIE which result in low access of biologics per 1000 inhibants. 16 These findings suggest that governments’ regulations supports, would help improve the access to this therapeutic biologics, such as decreasing costs of experimental materials during development progress, releasing restricts on market entry of oversea products, 25 improving approval pathways for biosimilars, 26 and reducing monopoly protections for bio-originators.…”

Measure on innovation efficiency of China's pharmaceutical manufacturing industry

“…Scholars from different countries have made great contributions to the innovation of pharmaceutical manufacturing industry from different perspectives. Cai et al ( 11 ) and Chen et al ( 12 ) showed that the innovation capability of the pharmaceutical manufacturing industry in the United States, the European Union and Japan ranked first in the world. Scherer ( 13 ) empirically analyzed American pharmaceutical companies and found that high innovation brings high performance and effectively avoids profit damage caused by competition.…”

Patents over patients? Exploring the variegated financialization of the pharmaceuticals industry through mergers and acquisitions

“…Both attributes are partly the result of China’s patent regime. Over 97% of drugs sold by Chinese firms in the domestic market are generic and have no IP rights (Chen et al, 2018; Daxue, 2021). The pharmaceutical patenting process in China has been described as unclear, overboard, and lengthy, with the Chinese government enforcing strong regulations on foreign entrants and imports (Chen et al, 2018).…”

“…Over 97% of drugs sold by Chinese firms in the domestic market are generic and have no IP rights (Chen et al, 2018; Daxue, 2021). The pharmaceutical patenting process in China has been described as unclear, overboard, and lengthy, with the Chinese government enforcing strong regulations on foreign entrants and imports (Chen et al, 2018). All domestic and foreign products are subject to approval from China’s National Medical Products Administration, a regulatory body which approved only 100 new drugs between 2001 and 2016 (New York Times, 2018).…”

“…In this sense, China’s patent regime exists as an ‘implicit non-tariff trade barrier’, which provides a form of institutional protectionism that has reduced the outright ownership of Chinese pharmaceutical firms by foreign competitors (Wu and Hsu, 2018: 753). Combined with much lower levels of R&D investment which has hindered the pace and sophistication of pharmaceutical innovation (Chen et al, 2018; Zhong and Ouyang, 2020), Chinese firms have traditionally lacked the capacity to acquire foreign firms and are themselves often perceived to be unattractive targets. This is evidenced by the fact that despite being the second largest pharmaceuticals market by sales revenue (IQVIA, 2020), over the last two decades Chinese firms made only and 11 (2%) international acquisitions worth $1bn (less than 1%) and were only targeted by foreign competitors 21 times (3%) worth $2bn (less than 1%).…”