The Chinese pharmaceutical market at the crossroads

The Chinese pharmaceutical market is large in absolute size (the second largest in Asia), but it faces similar problems to those that plague other developing countries, such as a lack of adequate patent protection, low pharmaceutical spending per capita, but high pharmaceutical expenditure as a proportion of total medical spending, and a lack of health insurance coverage. In this article, the pros and cons of two pro-competition policy proposals for China are explored. The first proposal is to follow the E5 guideline of the International Conference on Harmonisation and waive unnecessary local clinical trials for global new drugs that have been approved by the US Food and Drug Administration or the European Medicines Agency (except for drugs for which there is a real possibility of there being ethnic differences in patient responses). The second proposal is to tighten the standards for generic drugs and approve only bioequivalent ones. While the first proposal encourages price competition between similar compounds in the same therapeutic class, the second proposal enhances generic competition for off-patent drugs. Working together, these two proposals would improve access to and the quality and affordability of pharmaceuticals in China.