Stronger supportive policies will further boost the development of China’s pharmaceutical and medical equipment industries, injecting new momentum into their innovation-driven growth, according to experts and industry people. The policies will also increase the presence of domestic companies in these industries overseas while helping safeguard Chinese people’s interests, they said after the central government adopted new documents on the measures. Last month, the Chinese government adopted a three-year action plan for the high-quality development of the pharmaceutical and medical equipment sectors. Chaired by Premier Li Qiang, the meeting said efforts will be made to further modernize the sector and make it more resilient, enhance the country’s supply capacity of high-end drugs, key technologies and raw and auxiliary materials, and shore up weak links in high-end medical equipment.
As research and development and innovation in the pharmaceutical sector face great difficulties – in part because they are time-consuming and require large investment – stronger support will be provided to help leading pharmaceutical enterprises survive and thrive and enhance their market competitiveness, it was said at the meeting. It is imperative to attach great importance to the promotion and application of domestically developed medical equipment. Furthermore, relevant support policies should be fine-tuned to facilitate upgrades, the meeting noted.
Flora Zhu, Director of China Corporate Research at Fitch Ratings, said China’s latest plans to promote high-quality development of pharmaceutical and medical equipment manufacturing underscores the two sectors’ strategic importance to the nation’s economic growth and will stimulate R&D in the sectors, with the government emphasizing and promoting innovation and stepping up policy support. “China has a large pharmaceutical market and a long and complete pharmaceutical supply chain, but its reliance on foreign products is high in segments such as innovative and biological drugs and high-performance medical equipment,” she said. “The R&D spending of domestic pharmaceutical companies has been increasing rapidly over the past few years amid China’s healthcare reforms aiming to improve drug quality and encourage innovation, while the technology gaps between Chinese companies and their global peers remain large.
Meanwhile, China’s heavy reliance on value-added imports has become a potential source of vulnerability amid rising geopolitical tensions and underscores the need for further domestic innovation in the technology arenas.” Zhu said Fitch expects leading players to benefit the most from the latest plans, with the government encouraging the development of large pharmaceutical companies to increase competitiveness and drive industry concentration. Leading players are also likely to further scale up R&D investment in a favorable policy environment, she added.
Since 2021, R&D investment in these industries has been growing at 23% per year on average, data from the Ministry of Industry and Information Technology (MIIT) showed. Eighty-two homegrown innovative drugs and 217 innovative medical devices have entered the domestic market, while four innovative drugs have been registered in developed countries for market launch, the China Daily reports.
