Photo/Shetuwang

Mar. 21 (NBD) - China will try its best to eliminate import tariffs on anti-cancer drugs and significantly lower tariffs for other imported drugs, Chinese premier Li Keqiang said after the first session of the 13th National Congress of Communist Party of China on Tuesday.

Undoubtly, it would be a boon for multinational pharmacy enterprises that are selling their products in China, though the drug prices may not decline. But both generic and innovative drug makers at home will face greater challenge. The companies hope that the government will issue more supporting policies to encourage the development of innovative drugs. 

Anti-cancer drugs to be more affordable

High price has been one of the biggest obstacles for patients to obtain imported anti-cancer drugs, which forces many patients to buy drugs overseas.

Goldman, a researcher at the University of South Carolina, found that each 10 percent increase in cost sharing, prescription drug spending decreases by 2 to 6 percent, depending on class of drug and condition of the patient.

Shi Lichen, founder of a third party medical service system msikl.com, told NBD that zero duties on foreign anti-cancer drugs may not be necessarily lead to reduction of drug prices. For example, drug makers may not choose to lower of price of those drugs that are widely used in grade-A tertiary hospitals but for limited number of patients. In contrast, if there are drugs that are not well received in Chinese hospitals due to high costs, it would be a chance to expand sales.

Shi suggested government officers should first have a talk with multinational drug makers before making policies, saying that companies which are willing to reduce prices are entitled to zero tariffs.

Kang Wei, Chairman of R&D-based Pharmaceutical Association Committee of China Association of Enterprises with Foreign Investment, said to NBD that China has lowered tariffs on imported drugs in previous years. Undoubtly, State Council's "zero tariffs" efforts towards imported drugs will make innovative drugs even more affordable. That would be a part of a wider plan to improve people's well-being.  

Currently, multinational drug makers are cautious about the "zero tariffs" policy, and many refuse to make a comment on it at the time being.

Domestic drug makers to deliver more research findings

A-share listed pharmacy-related shares rose across the board the moment "zero tariffs" policy is heard. As of Tuesday, the pharmaceutical industry closed 2.45 percent higher. Among them, 13 stocks rose to daily limit.

However, how the domestic drug makers will be affected by the "zero tariffs" policy?

Ding Lieming, Chairman of Betta Pharmaceuticals, told NBD that such a move will greatly improve people's well-being. What's more, as China Food and Drug Administration becomes a member of the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH), the country will promote its pharmaceutical industry to be in line with international standards and makes the industry more open to the global market.

Ding agreed with Shi Lichen that domestic pharmaceutical companies, especially generic drug makers will be hit in a varing degree in the short run. But in the long run, the new policy will enhance the innovation in the field as latest research findings abroad can be introduced to the domestic market more quickly, Ding added.

Statistics show that as of January 2018, about 33,407 cancer-related clinical research tests have been carried out, which is only 1/3 of that of America. Therefore, domestic innovative drug makers have to gear up to conduct research and turn research findings into high quality anti-tumor drugs.

But at the same time, more favorable policies should be given to innovative drug makers in China, such as lower taxes and higher inputs.

Email: tanyuhan@nbd.com.cn