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» 23/07/2009 [Company watch]
China Aoxing Pharmaceutical Corp. Receives Renewal of GMP Certification for Capsule Dosage Form of Pharmaceutical Products
» 15/03/2010 [Industry news]
Recordati S.p.A And Lee Pharmaceutical Announce Partnership For Zanidip(R) In China
» 26/10/2009 [Finance]
China Growth to Remain Fast in Fourth Quarter, Official Says
» 17/08/2009 [Industry news]
Chindex Posts Profit on Product Sales, Health Services
» 07/05/2010 [Industry news]
Hong Kong: Recall of all products manufactured by Quality Pharmaceutical Lab Ltd
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»20/08/2009 [Industry news]
China says new drug policy stirs competition,

* Chinese drug companies jump on news of drug list; * First step in $124.5 billion healthcare reform; * Key to economy moving from export- to consumption-based

 
* Chinese drug companies jump on news of drug list; * First step in $124.5 billion healthcare reform; * Key to economy moving from export- to consumption-based (Reuters) - China Health Ministry said on Thursday that a new policy on essential drugs would create competition among manufacturers and lead to more mergers and acquisitions in the country\'s fragmented pharmaceuticals industry. Earlier this week the ministry issued a list of 307 essential drugs as part of its plan to provide basic and affordable healthcare, a crucial step in a set of $124.5 billion reforms that aim to cover 90 percent of the population with basic medical insurance by 2011. [ID:nPEK315246] The approved drugs on the list will be eligible for state subsidies of up to 100 percent, making them affordable for China\'s vast rural population and urban poor. It is a brand new system, and is the most crucial and difficult part of the medical reform, Zheng Hong, the head of medical policy and the essential drugs programme at the Ministry of Health, told journalists. But the new programme will create new competition among manufacturers to get their drugs approved, and present opportunities for industry-wide consolidation. \"Essential drugs will be purchased through competitive bidding,\" said Zheng. \"It\'s impossible for all makers of the same drug to win bids ... so the impact will be more mergers and acquisitions.\" The initial list of drugs will benefit mostly domestic companies that manufacture basic generic drugs, but an expanded list could benefit foreign pharmaceutical companies. Since Tuesday, shares in generics and traditional Chinese medicine makers Tianjin Zhongxin Pharmaceutical Group (600329.SS) and Mayinglong Pharmaceutical Group (600993.SS) have gained 20.4 percent 10.3 percent, respectively, while the broader Shanghai index .SSEC has risen only 1.4 percent. \"This initial list of drugs will benefit mostly domestic firms that make basic generic drugs in standard doses,\" said Rachel Lee, a Shanghai-based partner at The Boston Consulting Group and a healthcare specialist. FOREIGN PHARMAS COMING The reforms are also a focus for Beijings economic planners who want the Chinese consumer to put less away as a hedge against potential catastrophic medical expenses and spend more to boost domestic consumption. Since 1995, about the time when state-owned firms stopped providing cradle-to-grave welfare, the average urban household saving rate as a percentage of disposable income rose by more than a half again to 28 percent in 2008. The government will allocate an extra 850 billion yuan ($124.5 billion) for the healthcare reform, which includes building 29,000 community clinics. With sluggish growth in the United States and Europe, many large foreign pharmaceutical companies are expanding sales forces, distribution channels and research operations in China to tap into the country\'s robust drug market, a consultant for IMS Health Inc (RX.N) told Reuters last month. [ID:nN22343964] Sanofi-Aventis, the worlds fourth-biggest drug maker, said in April it would invest $90 million to boost output of the insulin drug Lantus in China. While the list issued this week is for basic drugs made mostly by Chinese companies, an expanded list may include more sophisticated medications that foreign firms could benefit from. \"We have heard there is a larger list coming out later this year. Foreign firms need to be ready to apply for approval when that list comes out,\" said Boston Consulting\'s Lee. By the end of this year about 30 percent of state-owned grass-roots health institutions will stock the listed drugs, and all institutions in rural and urban areas will be asked to give a priority to their use, said Xinhua. For companies that fail to put their drugs on the list, however, they could become acquisition targets. ($=6.83 yuan)

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