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Frost & Sullivan Looks at the Influence of China's New Health Reform on the Pharmaceutical Market
Date:5/21/2009

stribution channels and high-quality products will be pushed out of the market in 3-5 years after the policy's execution. In contrast, the policy will largely boost the increase of products by large generic suppliers; make them stronger even with a lower price.

As a result, the market leaders become even stronger while the smaller players fall behind, accelerating the centralization of the generic pharmaceutical market.

In addition, it has been reported that the draft of "Regulation for Drug Price Administration" is completed and drugs of certain kind, such as patent drugs and first-generics, enjoy preferential policies of individual pricing. This means there is no price change or little change even if listed in the national essential drug list.

"The policy is not finalized but it is very likely to come true since it is highly consistent with the long-implementing policy of encouraging innovation." Kitty concludes, "Such policy enables the listing of national essential drug with little or even no depreciation of patent and first generics which greatly benefits the drug supplier by a huge increase in sales volume. Drug innovation is thus expected to be promoted partly by the new policies for greater profit."

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