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Innovation instead of generics is a top priority for the Chinese pharma industry

China’s pharmaceutical industry has undergone a dramatic change in the last 20 years. At the beginning of the century, a mere third of the population had access to health insurance, now 100% are covered. The government’s “Healthy China 2030” policy stimulated the growth of the health industry in the double digits, which is expected to continue over the next years. In 2027 143 million people over the age of 65 will live in China and they are suffering from the typical health issues of higher income countries: cardiovascular diseases, hypertension, diabetes and cancer.

The recent change in the purchasing practice of state hospitals has unsettled the pharma industry. An open bidding scheme for bulk purchases has markedly lowered the profit margin of generic drugs – the cornerstone of the Chinese pharma industry. As a consequence, consolidation is expected among the thousands of small domestic generic drug makers. Big international companies can offset the loss of profit easier by outweighing it by volume of sales.
For small companies, however, innovation will be key to thrive in this competitive environment and this applies to several areas. The focus needs to shift to the development of new drugs, which yield much higher profits due to patent protection. This means to rival multinational pharma companies, who benefit from recent regulatory reforms. If a drug has been approved in other countries, no additional clinical trials in China are necessary, which significantly decreases time-to-market.
Apart from research, innovation is also vital in production and processing. Instead of high volumes of one product only, small batches of different drugs are requested in the future.  Production lines thus need to be flexible enough to switch from one product to the next in a matter of hours. This requires efficient and highly automated equipment with smart operating systems that are easy to use, as skilled workers are in short supply.
Packaging, as the last step in the chain, has to follow suit and be as flexible as switchable as the processing units. Serialization, as well as tracking and tracing, are key challenges when it comes to ensuring that medication reaches the customer safely and without quality losses. After a vaccine scandal in 2018, the government has taken the first steps to replace the current national serialization scheme by one that conforms to international standards.

AchemAsia, 21-23 May 2019 at NECC Shanghai, is the event to meet leading international companies in the pharma equipment sector. They offer the latest in laboratory, production, processing and packaging gear, paving the way to compliance with any international standards. AchemAsia is the international forum for sustainable chemical production and has been known as a meeting point of Asian dynamics and German engineering tradition since 1989.

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