CHINA LEX PHARMA LAW NEWSLETTER
Vol. 2 , No.17- July 4, 2001
TOPICS THIS ISSUE:
- OTC Drug Market Prospers
- China Bans PPA
- Advanced Biomedicine Designated As Nation's Priority
- China AIDS Stats Daunting
- Medicare System to Cover Rural Residents
- Second Batch of Medical Media for Prescription Drug Advertisements
- Shanghai Roche Signs Deal With Siebel eBusiness
OTC Drug Market Prospers
China's market for over-the-counter (OTC) drugs is swelling rapidly, government sources have reported. The country represents the fastest-growing OTC drug market in the world and is expected to be the largest market in the near future, said Hu Shangyu, vice-chairman of the China OTC Association.
The sales income of OTC medicine is expected to reach RMB 60 billion (US $7.3 billion) in 2005, five times the RMB 12 billion (US $1.5 billion) take last year. Experts predict the market will expand by up to 30 percent each year for the next five years. The government's policy of fostering OTC drug sales made it possible for China's OTC market to take off, Hu said.
Recently the State Drug Administration unveiled the second batch of OTC drugs, which can be bought in pharmacies and supermarkets without a doctor's prescription.
There are nearly 2,200 different OTC drugs available, nearly half the 5,000 kinds of drugs in the country's market. The government started classifying OTC and prescription drugs last year.
Hu expects the nation's large population, especially the growing elderly group, will fuel the development of OTC drugs, which are easier to obtain.
Increased disposable income and improved health-care awareness are prompting consumers to buy more medicines to combat common ailments.
The changes in China's health-care system are pushing patients away from hospitals towards buying more drugs over the counter, Hu said.
Under the new medical insurance system, which has first been implemented in some cities, patients pay a certain percentage of the expenses. Under the prior system, employers paid for almost all expenses. As a result, the consumers want OTC drugs rather than paying high doctor costs to obtain prescriptions, Hu said.
Most OTC drugs are for routine problems like colds and diarrhea, and the government carefully approves new OTC drugs to ensure dangerous medications are dispensed only at a doctor's direction.
Competition is coming to the OTC market, too, with chain drugstores offering lower prices and better services being expected to proliferate, Hu said.
In the South China city of Shenzhen, where the chain drugstores prosper, sales of OTC drugs account for more than 50 percent of total medicine sales. For now, though, OTC drugs only cover 10 percent of the nation's drug sales.
Last year, the country spent a total of RMB 110.8 billion (US $13.4 billion) on medicine.
Wang Zhihua, president of Nanjing-based Zhongshan Pharmaceutical Co., said the domestic drug makers should gear up to tap the OTC market.
To seize the new emerging market, he said, the domestic drug manufacturers should pay more attention to brand building, marketing and packing. Foreign brands currently are better known in China.
(Source: Xinhua News Agency)
China Bans PPA
Production and sales of drugs containing phenylpropanolamine (PPA) have been banned in China according to a recent decision by China's State Drug Administration (SDA). The decision was made due to increasing evidence that drugs containing PPA, such as cold remedies Contac and Contac SCF, can cause a series of adverse reactions. Some studies have shown that because of its action in contracting blood vessels, PPA can cause allergies, hypertension, kidney failure and insomnia.
All production and sales of drugs containing PPA are now prohibited in China, and the SDA has ordered that all inventories of PPA-containing drugs be destroyed under the supervision of local drug administrations.
"Adverse reactions are mainly caused by the specific properties of PPA and the biological condition of patients, which does not infer that the drugs do not meet the quality standards," said Bai Huiliang, in a recent interview with China Daily.
(Source: Asia Pulse)
Advanced Biomedicine Designated As Nation's Priority
China has placed modern biotechnology as its development priority in the pharmaceutical industry in the next five years, according to an outline released by the State Economic and Trade Commission (SETC).
Some 10 to 15 kinds of biomedicine with patents will be developed in the coming five years. Advanced and suitable bio-technology will be applied to upgrade the country's pharmaceutical industry.
Venture capital will be introduced to establish a special fund and to channel investment into the industry. More exchanges will be promoted between the research and development institutes and pharmaceutical manufacturers so as to guide the latter to be involved in the initial stages of research.
Meanwhile, modernization of Chinese medicine and development of preponderant materials are also on the list of the SETC layout.
During the period from 2001 to 2005, the gross value of drug industrial output will be increased at 12 percent every year and the import and output value at 6 percent per year.
(Source: Xinhua News Agency)
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China AIDS Stats Daunting
With an estimated 600,000 people in China infected with HIV and the number increasing annually by 30 percent, the government has launched a five-year plan to slow the spread of the virus to 10 percent annually.
Currently, the prevalence of infected individuals is lower than some countries at 0.5 percent of the population; however, the rate of increase makes it a looming threat to China's already-strained healthcare budget. China's health minister attributes the rapid increase to intravenous drug users.
The plan developed by the government includes AIDS awareness training for teenagers, public service announcements, condom vending machines and other educational programs.
The government has also been vocal in asking pharmaceutical companies to reduce the cost of AIDS drugs, which are far out of the reach of most Chinese nationals. China is also encouraging local, cheaper manufacturing of AIDS drugs.
(Source: AP Worldstream)
Medicare System to Cover Rural Residents
China has begun setting up a rural medical service system in various localities after the nationwide reform of the medical care system in cities. The purpose of the system is to ensure that rural residents have easy access to primary medical and health care services.
In the 1970s, China had a rural collective medical care system in the countryside on the basis of the people's communes, which played a major role in relieving the shortage of inadequate medicines and medical service in the economically weak countryside. The collective medical service system lost its vigor since the collapse of the people's communes two decades ago.
Moreover, with the improvement in the rural people's living standard, it has become necessary to upgrade the medical and health care system in these areas.
Local medical service systems have been established in some provinces such as Anhui, Zhejiang, Henan, Sichuan, Heilongjiang and Shanxi. Community clinics are available in all the 31 towns of Feixi County in Anhui Province, and all the medical workers have passed professional examinations at various levels.
Xu Jie, director of the Feixi Health Bureau, explained in an interview that "in the county, 85 percent of the pregnant women go to hospital to give birth, medicines for epidemic prevention are hand delivered to every household, and some local diseases such as schistosomiasis and malaria are well under control."
According to officials, the nationwide medical service network mainly based on village clinics and town hospitals calls for strengthened government administration. Nobody without professional training will be allowed to work in the clinics and hospitals, and those who practice medicine without a license will be dealt with according to law.
(Source: Xinhua News Agency)
Second Batch of Medical Media for Prescription Drug Advertisements
China's State Drug Administration and Ministry of Health recently issued the second batch of medical media that are qualified to publish advertisements for prescription drugs.
83 newspapers and magazines have been selected to be the second group of qualified medial media. Among those on the list are China Pharma Standards, Health News and China Pharma News.
(Source: China Pharma News)
Shanghai Roche Signs Deal With Siebel eBusiness
Siebel Systems, Inc., a provider of eBusiness applications software, recently announced that Shanghai Roche Pharmaceuticals Co. Ltd. will standardize its sales and marketing efforts in China on Siebel eBusiness Applications. Siebel ePharma, tailored specifically for pharmaceutical and healthcare companies, will provide Roche professionals with a single, multichannel customer information management system so they can evaluate customer needs and promote relevant products.
Shanghai Roche selected Siebel ePharma to streamline its sales and marketing reporting, currently generated from hardcopy records held in many different departments. Siebel ePharma will enable Shanghai Roche to create a single repository of customer information, gathered from multiple channels and locations.
It will also allow healthcare sales representatives to initiate and access customer histories in real time, prepare for more productive sales calls, and provide timely reports without delays arising from paper-based systems. Siebel ePharma will enable Roche's sales and marketing professionals to measure and evaluate business performance in relation to customers, products, sales and marketing -- so they can create more accurate customer profiles for better-targeted campaigns.
"Siebel ePharma will bring us closer to our customers and enhance our relationships with them across all points of contact," says Michael Xu, Sales Development Manager, Shanghai Roche Pharmaceutical Co. Ltd.
(Source: Business Wire)
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