Drug Approval Policies in China and the Growing Pharmaceuticals Market

A Growing Market

In 1998, Chinese pharmaceutical sales exceeded RMB 110 billion. By 2003, sales had reached nearly RMB 300 billion, and by 2007 had grown to almost RMB 600 billion. In the wake of the creation of the State Food and Drug Administration, sales have continued to climb at an almost exponential rate. The Chinese drug market is now the third largest in the world.

Drug Approval

The State Food and Drug Administration handles China drug approval matters, which was created in April of 2003. This agency was founded to raise Chinese pharmaceutical products to the quality standards of other countries and enhance Chinese standing within the World Trade Organization, as well as monitor the quality of foreign imports. By creating a regulating body to monitor the quality and effectiveness of domestic and foreign pharmaceutical products, China had positioned itself to be an important player in the worldwide pharmaceutical landscape.

Some of the responsibilities of the Chinese State Food and Drug Administration include:

• Monitoring drug usage for adverse reactions
• Creating and maintaining a state drug catalogue
• Investing and punishing the production of illegal counterfeit drugs and inferior drugs
• Overseeing the registration of pharmacists through a state licensing system
• Creating a 'best practices' system for drug research and development
• Approval of pharmaceuticals and medical devices for public sale

The State Food and Drug Administration mandates that foreign pharmaceuticals intended for sale within China must first meet regulatory approval in their country of manufacture. The exception to this rule is when a drug product critically needed in China has not met with home-country regulatory approval. In those circumstances, the State Food and Drug Administration can conduct an independent review of the safety of the pharmaceutical and approve or disapprove it for public use.

Foreign Interest in the Chinese Drug Market

Bloomberg reports that the Bayer corporation plans to double sales in China by 2015 and move their production operations of polycarbonates from Leverkusen, Germany to Shanghai, China by 2011. The new plants will have an annual production capacity of 200,000 metric tons.

In February 2010, Pfizer, Inc moved its R&D operations from Connecticut to Wuhan, China. AstraZeneca, of England, soon followed suit and has committed to moving its production to China, as well. Novartis has invested more than $1 billion in expanding its China operations.