What are the hot issues of Chinese pharmaceutical industry that foreign investors cared about during the two sessions? What are the expectations for Chinese pharmaceutical market after work resumption? Recently, KANG Wei, Managing Director of R&D-Based Pharmaceutical Association Committee (RDPAC) received an exclusive interview from Chinese Pharmaceutical News on hot topics that she cared about during the two sessions.
Keyword 1: Optimize business environment
“About the two sessions, I’ve paid great attention to proposals related to pharmaceutical industry, especially those on business environment and the market economy system that were put forward by delegates.” KANG Wei told the reporter, “An optimized market environment and a fair, active and energetic investment atmosphere can maximize the innovation initiative of enterprises, help attract and gather resources in China and abroad, and strengthen local innovation competitiveness. We hope that the government will continue to optimize the business environment.”
She told the reporter that on May 18, the eve of the two sessions, the CPC Central Committee and the State Council issued the Opinions on Accelerating the Improvement of the Socialist Market Economy System in the New Era (the “Opinions”) that defined the systematic design and deployment of the goals, direction, missions and measures for accelerating the improvement of the socialist market economy system in the new era, from which we can see the Party and the government’s unwavering faith in insisting socialist market reform and giving full play to initiative and creativity. The Opinions focuses on the adaptation problem of modern governance to high-speed development, puts forward to further liberate and develop the productivity, minimize government’s direct allocation of market resources and direct interference to microeconomic activities, and strengthen the improvement and refinement of the protection system of intellectual property. KANG Wei expressed her expectations for a lot of content of the Opinions and suggested that the government departments might refer to some preferable measures abroad in aspects such as governance improvement and intellectual property protection.
“For example, how to meet people's diversified medication demands by leveraging market measures without adding burden to national medical insurance?” To solve this problem, KANG Wei suggested that we can learn from France to adjust the standards of medical insurance reimbursement, because that direct administrative intervention to drug pricing may lead to market failure, thus cause drug shortage or out of stock. According to KANG, in France, after patented drugs go off-patent, the first generic drug goes on the market, followed by the second and the third, then the reimbursement standard will be cut down in steps, and part of the retail price that exceeds the reimbursement standard will be undertaken by patients. “Under this market competition strategy, the medical insurance can meet diversified medication demands of patients with different capacities to pay while doesn't increase spending.”
Keyword 2: Pharmaceutical innovation system
In recent years, China has issued a series of measures to encourage innovation, about this, KANG Wei highly praised the reform of review and approval system by National Medical Products Administration (NMPA) since 2015, because before 2015, a new drug launched in China would be 5-7 years later than that in Europe, America and Japan, while we have achieved simultaneous marketing for new drugs in China and abroad last year. Moreover, it has also set up an accelerating channel for review and approval of drugs and therapies for serious diseases like cancers and rare diseases and some unmet special demands. “It is clear that NMPA will go forward on the direction of internationalization and keeping up with advanced international standards.” KANG Wei said.
It’s reported that from 2017 to the first half of 2019, member companies of RDPAC have introduced at least 103 innovative drugs to China market, accounting for 80% of all innovative drugs marketed in China in the same period. How to create the innovation ecosystem in China and enhance local innovative capacity is also a concern of KANG Wei.
“SHEN Nanpeng, member of the national committee of CPPCC and the global managing partner of Sequoia Capital China, suggested that government departments should keep improving the innovation basis for pharmaceutical industry, provide policy support to further strengthen the R&D conversion of new drugs, and promote the construction of a ‘pharmaceutical power’, I agree with him.” KANG suggested that it was worthy of concerns of relevant authorities to balance between the encouragement for innovative drugs and development of generic drugs.
“China’s pharmaceutical innovation ability has stepped into the second tier in the world, and a group of returned overseas scientists are also looking forward to improved protection measures for intellectual property in China. We hope that an intellectual property system for protecting the local innovation capacity will soon be established, and the domestic innovation ecosystem will be created in aspects of policy environment and talent development.” KANG Wei said.
Keyword 3: To increase investment in China
As to the complex environment in China and abroad, as well as impact of COVID-19 on pharmaceutical industry, KANG Wei presented optimistic expectations, which is “the long-term development trend of pharmaceutical industry will not change”.
She thought, on one hand, after the pandemic, people will pay more attention to their health, and health awareness will be promoted significantly; on the other hand, the pandemic make people learn about the hardship of medical innovation, and will pay more respect to innovation. After the pandemic, the government will increase the investment in public health and epidemic prevention system, strengthen the constructions of infrastructure and grassroots capacity. Therefore, in the long run, the pharmaceutical industry has a promising prospect.
During the two sessions, Commerce Minister ZHONG Shan pointed out that China will expand foreign investment increase by measures such as further expanding opening-up, relaxing restrictions on market access and shortening negative list; meanwhile, stabilize the stock of foreign investment, mainly through implementing of Foreign Investment Law, creating a just, fair and transparent business environment, protecting the lawful rights and interests of foreign investors, and protecting intellectual property.
KANG Wei told the reporter, “Our member companies have been in China for around 20 to 30 years, China market takes an important position in global strategies of multinational drug companies, they are confident of the strong resilience of China’s medical system and very optimistic about the potential and future development of China’s medical industry, and they will continue to increase investment to China market.
Keyword 4: Global cooperation to fight COVID-19
According to KANG Wei, since the outbreak of COVID-19 in China, RDPAC and its member companies have paid close attention to the pandemic development, and actively fight COVID-19 in the following three aspects. First, actively stock up to guarantee market supply, especially for antiviral drugs. RDPAC, together with its member companies, supported the construction of an international medical supplies purchase channel through long-term partnership with international industry associations and international non-profit organizations, and helped relieve the potential shortage of medical supplies in China. At the same time, giving consideration to medication demands of ordinary patients, we initiated the on-line medicine seeking activity in Hubei Province, and through communication with local medical insurance departments, we made it possible for patients to not only see doctor and get prescription on line, but also realize the real time reimbursement. Second, actively donated money and relief goods, 35 out of the 42 member companies made donation valued up to RMB 200 million, including cash, drugs and medical devices, personal protective equipment, and etc. Third, accelerated the R&D of relevant drugs, urgently screen the existing drug and vaccine R&D database, and actively sought solution for fighting COVID-19 to respond to this global crisis. According to incomplete statistics, since the outbreak of the pandemic, 18 RDPAC member companies have published their efforts and progress in R&D against COVID-19. Meanwhile, through regular communication and share with International Federation of Pharmaceutical Manufacturers' Associations (IFPMA), RDPAC has also given full play to its role as the connection and bridge to support China and the whole world in fighting COVID-19, and contribute to the implementation of international cooperation.