Reform has unleashed Chinese drugs innovation boom, though some pharma firms may not survive under intense price pressure, industry leaders say

Sales of newly developed medicines, or novel drugs, could more than triple to 960 billion yuan in the eight years to 2025, according to forecasts

Price pressure could spell the end for drug makers that fail to innovate, an industry conference hears

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The number of domestically-developed new drugs approved for marketing has been creeping up each year, the conference heard. Photo: Shutterstock

Published: 8:30am, 14 Jan 2021Updated: 11:59am, 15 Jan 2021

Corrected [11:58am, 15 Jan, 2021]

[11:58am, 15 Jan, 2021]
Corrects insurance claims amount to 1.85 trillion yuan in third paragraph from the end

China’s drug developers are expected to ride on a surge in the size of the domestic market driven by policy reform, though intense price pressure will see off contenders failing to innovate, according to speakers at an industry conference.

The contribution of newly developed medicines – often referred to in the industry as novel or innovative drugs – to total sales in China’s pharmaceutical industry may rise to 36 per cent by 2025 from 22 per cent in 2017, said Song Ruilin, executive president of the China Pharmaceutical Innovation and Research Development Association, citing projections from the IQVIA Institute and Citi.

With the annual revenue of the domestic industry as a whole projected to double to 2.7 trillion yuan (US$420 billion) over that period, sales of innovative drugs could more than triple to 960 billion yuan, according to the forecast.

“As industry reform favouring innovation deepened and companies’ capacity to develop novel drugs rose over the past few years, China has evolved from being a laggard on innovation to being able to keep up with rivals in certain segments where they are striving to become leaders,” he told the China Biomed Forum the association co-organised on Tuesday.

“Of course, it is a long journey, given China still has a lot to catch up on in original innovation and basic research.”

The number of domestically-developed new drugs approved for marketing edged up to 12 last year from 10 in 2019 and nine the year before that, he noted. Between one and six were recorded in each of the years between 2010 and 2017.

Beijing has cut the red tape around new medicines and clinical trial approvals to match developed market norms over the past five years, and made it easier to import innovative drugs to the world’s second largest pharmaceutical market.