Keywords of China’s Foreign Trade of Pharmaceutical products in 2018

Prices of imported drugs

China’s pharmaceutical imports have continued to grow over the years, but suffered negative growth for the first time in 2018, which was mainly attributed to the falling of import prices. The falling of import prices then is closely related to the implementation of new policies including the “quality consistency evaluation of generic drugs” and “centralized procurement of generic drugs based on identified varieties and agreed quantity in “4+7” cities” in the domestic pharmaceutical industry in 2018. The quality consistency evaluation of solid preparations will continue in 2019. The quality consistency evaluation of injections was pre-arranged by some enterprises in advance, and the trials on centralized procurement of generic drugs in “4+7” cities” further fueled the competition among pharmaceutical companies. It is foreseeable that the competition in 2019 will be more intense. If overseas RLD companies strive to maintain the same market share or occupy more market share in China, the prices of imported drugs will remain at the current low level, or even lower.

Export of finished dosages

The export of preparations has become one of the important signs of Chinese pharmaceutical companies going out in recent years. The data shows that in 2018, the export value of preparations to developed markets reached 2.372 billion dollars, up by 38.39%. Dramatic growth in regulatory markets of the Europe, the United States and Japan was observed, with growth rates of 80.30%, 24.62% and 27.49% respectively. The increase in the export volume of preparations is not achieved in a single day, which is inseparable to the long-term unremitting exploration of developed markets by our leading preparation companies such as Huahai Pharmaceutical, Techdow Pharma, Heng Rui Medicine, Qilu Pharmaceutical, and PuraCap Pharmaceutical.

The number of approved ANDAs also mirrors from another angle the achievements of Chinese pharmaceutical companies in the export of preparations. In 2018, the number of the approved ANDAs of Chinese pharmaceutical companies reached a record high with a total of 71 approved ANDAs, 16 of which are provisional approvals. Among them, HEC, Huahai Pharmaceutical and Humanwell Healthcare are the top three enterprises with 12, 11 and 6 approved ANDAs respectively (the ANDA batch number of different specifications under the same variety was calculated as one ANDA). Besides, many enterprises obtained ANDA approval for the first time in 2018, such as Shijiazhuang Yiling Pharmaceutical Co., LTD., Shandong New Time Pharmaceutical Co., LTD., Shuangcheng Pharma, Boya Seehot, Shanghai Desano Pharmaceuticals Co., Ltd. (Desano), and Qilu Tianhe Pharmaceutical.

The “Belt and Road”

In 2013, China proposed the “Belt and Road Initiative”. Over the past five years, the “Belt and Road” development has gradually turned from concept to action, from initiative to consensus, from vision to reality, and has generated fruitful achievements, promoting pharmaceutical trade between China and Belt and Road (B&R) countries. In 2018, the value of pharmaceutical trade between China and other B&R countries was 23.549 billion dollars, a year-on-year increase of 6.72%, which was significantly higher than the global average growth rate.

China’s imports of pharmaceutical products from B&R countries have witnessed over 10% growth rate in the past two years. In 2018, China imported USD5.166 billion pharmaceutical products from the Belt and Road countries, up by 18.11% year on year. Among the top ten Belt and Road countries in terms of China’s pharmaceutical imports, 8 maintained over 10% growth rate and Indonesia’s ranking rose in the fastest speed, rising from the 6th in 2017 to the 4th in 2018 with China’s imports growing by nearly 50%. In addition, in the clinical aspects of new drugs, Henliu, a subsidiary of Fosun Pharma, has advanced HLX02 (Roche’s herceptin - herceptin analogues) to the clinical phase III by adopting the EMA biosimilars guidelines, and plans to introduce other biopharmaceutical varieties into the Southeast Asian market. In the future, there will be more pharmaceutical companies entering B&R countries, especially the emerging markets.

Turning point of proprietary innovation

China is the world’s largest producer of generic drugs. Among the 4,300 API and preparation manufacturers, generic drug enterprises account for more than 90 percent. However, due to a multiple of reasons, generic drug enterprises are on different development levels. The quality consistency evaluation of generic drugs in its full swing is a major reshuffle for the generic drug industry and Chinese pharmaceutical industry is at a critical stage for the transformation from imitation-based innovation. The optimization of the export structure of pharmaceutical products and the increasing proportion of exports to developed markets also indicate our pharmaceutical companies’ transformation from generics drugs to independent innovation by gradually upgrading their own strengths.

The year 2018 ushered in several domestic new drugs listed for the first time in the world - Albuvirtide, Danoprevir, and Anlotinib. In addition, in the thriving PD-1/PDL-1 field, two domestic new drugs were listed at the end of 2018 - Toripalimab Injection developed by Junshi Bioscieces and Sintilimab Injection jointly developed by Innovent Bioscieces and Eli Lilly. The listing applications of another two domestic PD-1 new drugs developed by Heng Rui Medicine and BeiGene respectively have been approved and entered the priority review and approval process.

The R&D strength of Chinese pharmaceutical companies has already rid into the first echelon of the world. A growing number of multinational pharmaceutical companies and overseas investment institutions focus on the Chinese market and look for outstanding investment targets with great development potentials in China. The amount of cooperation and M&A between Chinese and foreign companies reaches a new high every year. What is even more uplifting is that our pharmaceutical companies not only license in overseas advanced products and technologies, but also license out more and more advanced scientific achievements.

The demand for medical consumption upgrading in the Chinese pharmaceutical market is soaring, and the motivations of overseas scientists returning to China and the strong boost of capital are driving Chinese pharmaceutical market to transform from imitation to innovation. Chinese pharmaceutical companies at the critical stage of transforming from imitation to innovation are making great efforts to march forward with the tide of the times.

Trade Friction

The most influential trade friction in 2018 is the China-US trade war. In addition, China’s exported pharmaceutical products in 2018 experienced eight trade frictions such as anti-dumping from India and the United States and section 337 investigation, involving products such as  glucosylated steviol glycosides, glycine, paracetamol, and blood cholesterol tester.

  Source: CCCMHPIE

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