Advances in Biopharmaceutical Technology in China
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Chapter 4:   China Pharmaceuticals Market Situation 2006

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About the Author:
Bianca Piachaud, Ph.D.
Bianca Piachaud is a freelance writer and analyst specializing in strategic management aspects of the pharmaceutical and biotechnology industries. She received her MA (Hons) degree in Economics and Management Studies from the University of Aberdeen, UK, and a PhD in Strategic Management from the Aberdeen Business School, The Robert Gordon University. She has published in a number of international practitioner journals, and is author of the book on Outsourcing R&D in the Pharmaceutical Industry (Palgrave Macmillan Publishers, 2004). She has considerable experience in providing in-depth pharmaceutical and healthcare intelligence reports and analyses, and has worked for a number of companies in the UK and the US. Areas of research include strategic outsourcing, alliance and partnership strategies, and pharmaceutical and biotechnology sector developments. She currently works for Business Monitor International (London) as a freelance Asia regional specialist for the company's Pharmaceutical and Healthcare Intelligence division.

This chapter includes current information on development in China's pharmaceutical and biopharmaceutical sectors. Coverage includes generic biologics, pricing, regulatory developments, pharmaceutical market growth, strengths and weaknesses, industry trends, and China market forecasts.

Regulatory Developments: In a bid to narrow regional disparities in medicine prices, China's State Food and Drug Administration (SFDA) announced that the country will be divided into six pharmaceutical price regions: southern China, south-western China, north-eastern China, central China, northern China and eastern China. In addition, the SFDA has also moved to authorize the sale of drugs via the internet with the passage of the Interim Requirements for the Examination and Approval of Internet-Based Pharmaceutical Trading Services Act in December 2005. According to the new legislation, pharmaceutical trading services will now cover internet sales of all drugs and medical devices, as well as the principal packaging materials and containers used for the packaging of such drugs. Meanwhile, the Chinese State Council has also enacted a series of regulations relating to the control of narcotic and psychotropic drugs, which took effect from November 2005. The new regulations call for greater transparency and stricter penalties with regard to the control of narcotic and psychotropic drugs in China.

Domestic Sector Developments: China's Academy of Military Medical Science claims to have developed the country's first AIDS drug using independent intellectual property rights. The new drug, known as Dicaffeoyqunic Acid Tablets, marks a major breakthrough in China's Antiretroviral (ARVs) development program. The Jiangzhong Pharmaceutical Group, which is the co-producer of the drug, has applied for patent protection for the medicine, as well its production techniques in more than 20 countries worldwide. Meanwhile, biotechnology firm Zhejiang Pukang Biotech Company has received approval for its live Hepatitis A vaccine to enter the Indian market, marking an export debut for Chinese-made vaccines. The company is also exploring the possibility of exporting the vaccines to Guatemala and the Philippines. In other developments, China Northwest Biotech Corporation entered into a distribution agreement with US-based Reliant International Group, a direct distributor and manufacturer of all natural products. Reliant will assist in developing the company's products and packaging for the US market.

Foreign Company Developments: US pharmaceutical major Pfizer has officially opened its new state-of-the-art research facility in Shanghai. The center will specialize in Phase I-IV clinical trial design and bio-statistical analysis, rather than extensive discovery work. Similarly, Swiss pharmaceutical major Novartis has begun construction of a new US$83mn pharmaceutical production and development plant in Changsu province. The new facility will be designed to develop drugs for the treatment of leukemia, epilepsy and hypertension. Elsewhere, Singapore-based biotechnology firm SciGen has signed a joint-venture agreement with domestic firm Hefei Life Science Park Investment and Development Company to establish a manufacturing facility for its biopharmaceutical products in China. Meanwhile, generics producer Baxter Healthcare launched its anesthetic Sevoflurane on the Chinese market. In other developments, Bridgetech Holdings International, a company focused on maximizing the potential of emerging healthcare products and services in US and Asian markets, has entered into a joint-venture agreement with the Wu Jieping Medical Foundation, a non-profit organization under the auspices of the Ministry of Health, to distribute Bridgetech's products throughout China.

Intellectual Property Developments: Chinese scientists claim to have nearly 100 intellectual property rights (IPRs) on human functional genes, all of which show great potential in disease prevention and pharmaceutical development. Among the 100 human functional genes under Chinese IPRs, 20 or more are currently in the initial stages of laboratory research. Progress has also been made in research on genes relevant to tumor and cardiovascular diseases, as well as the causes of such diseases. Until now, Chinese scientists have been able to establish a platform for selecting human functional genes, cloning and identifying 1,346 new genes, and carrying out the large-scale examination of genetic function.

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