The off-patent drug refers to a kind of copy drug, which has the same dosage, security, strength, quality, performance and intended uses as the commercial name drugs. The legal acquirement of the off-patent drugs approximately includes two situations: one is the pharmaceutical copy after the patent expiration; the other is that the government obtains the production of the off-patent drugs by means of compulsory license in the field of patent drugs related to public health.
With the gradual reduction in the number of approved patent drugs on world market, the development pace of the patent drugs is restrained. The patent expiration of a group of blockbuster pharmaceuticals is just around the corner. The patent of the originally researched drugs worth 24 billion USD will become invalid in 3 to 5 years. In the next 5 to 10 years, the global off-patent market will usher the overdue pharmaceutical patent opportunities worth 120 to 150 billion USD, which will bring great business opportunities to the development of the off-patent drugs.
Besides, with the gradual growth of the off-patent drug market, the multinational pharmaceutical giants, such as Pfizer, Sanofi-Aventis, Bayer, etc, will step into the off-patent drug industry.
The off-patent drugs will play an important role in the future pharmaceutical market.
At present, the scale of Chinese off-patent drug market is about 80 billion Yuan, which still has huge development space in the future. According to analysis by experts, the off-patent drugs and the patent drugs are expected to occupy 70% and 30% of the market shares respectively in 5 to 10 years. By 2012, China will become the second largest off-patent drug market in the world with the compound growth rate of 14%.
Although China has carried out the compulsory GMP authentication since 2004, the number of Chinese pharmaceutical manufacturers does not drop but jumps from 3,731 in 2004 to over 4,000 at present. Because Chinese pharmaceutical enterprises are sparse, random and small, the new drug innovation is at the very beginning phase and most enterprises do not have the capacity of creating new drugs and the proportion of the investments in the new drug research is less than 3%. At present, Chinese local enterprises have brand influences and strong competitiveness; the top pharmaceutical enterprises on large scale all specialize in the off-patent drug business.
At present, China has more than 4 thousand pharmaceutical enterprises, over 80% of which are the medium and small enterprises. However, America only has about 200 pharmaceutical enterprises. Due to the limited research level, Chinese pharmaceutical enterprises are mainly engaged in the production of the off-patent drugs while the independent renovative pharmaceuticals only account for a small part. Many pharmaceutical enterprises enter the off-patent drug market, resulting in fierce competitions. There is big gap between the production and sale of Chinese off-patent drugs and that of developed countries, such as America. The average profit of Chinese off-patent drug industry is only about 5 to 10 percent, with the international level at 40 to 60 percent. Among Chinese local pharmaceutical enterprises, there is almost no outstanding enterprise with international market experiences.
After October 2007, China began to carry out the new Drug Registration Regulation. According to the new definition of new drug in Drug Registration Regulation, the scope of the new drugs is narrowed down. Only the real new drugs can receive the new drug certification. The application of the drugs conforming to the previous national drug standards is called the off-patent drugs. In the previous time, the simply reformed drugs could also receive the new drug certification, which are not qualified to receive the new drug certification in the new regulations. Although China examines and approves numerous drug applications, only a small part are creative drugs. The original definition of the new drug referred to drugs which had not been in the market before and some slightly changed, leading to the serious situation of one drug with many names.
The phenomenon that the off-patent enterprises are knocked out of the market conforms to the laws of the market. If enterprises are unable to cater to the new management measures, they will inevitably be knocked out of the market. This is the law of the market as well.
Chinese new medical reform plans will intensify the government investments in the medical security and enhance the basic residential medical systems covering the urban and rural areas, which will be good news for the advantageous off-patent drug manufacturers after the fiercest competition.
From the aspect of the present situation, there are two merits for Chinese domestic pharmaceutical enterprises to take part in the international off-patent drug competition: first is the low labor force cost and abundant raw material resources in China. Meanwhile, costs of the environmental protection are also very low; besides, most pharmaceutical enterprises in China are engaged in the production of the off-patent drugs and have high copy capacity. At present, Chinese off-patent drug enterprises can make good use of copy ability to obtain the competition advantages through getting pharmaceutical information of the expired drugs.
Meanwhile, there are three aspects restraining Chinese domestic pharmaceutical enterprises from competing in the global market: the first is the comparatively weak quality of the off-patent drugs and the unfavorable position compared with the developed countries; the second is the inferior research environment and abilities. The off-patent drugs have high requirements on the technologies, which will restrict the capacity of Chinese off-patent enterprises; third, the largest demerit of Chinese pharmaceutical enterprises is the insufficient investigation of the global market and unfamiliarity with the situation of the global pharmaceutical market, which is caused by the language and cultural differences as well as the shortage of the international market experiences and insufficient investments in the international pharmaceuticals.
Nowadays, foreign enterprises gradually enter Chinese off-patent drug market. Chinese off-patent drug market will face various challenges, not only from their own transition, but also from more and more foreign-funded off-patent drug competitors.
When the international financial crisis sweeps the globe and various industries are in depression, Chinese pharmaceutical market has attracted attentions from domestic and oversea investors. Due to special features of the pharmaceutical industry and rigid demands for pharmaceuticals, Chinese off-patent drug industry is less affected by international financial crisis, because the major market of Chinese pharmaceutical enterprises concentrates in the domestic market.
Most of the data in this report come from the first-hand investigations and meanwhile cite abundant second-hand information. This report mainly analyzes the development environments and present situation of Chinese off-patent drug market as well as the detailed analysis of the major global off-patent market. The related enterprises can learn some experiences and discover the potential investment trends and opportunities. This report is of high reference values to understand present development situation, competition patterns, market trends and development trends of Chinese off-patent drug market so as to master more investment opportunities.
More following information can be obtained in this report:
- Present Situation of Chinese Off-patent Drug Market
- Development Environments of Chinese Off-patent Drug Industry
- Prediction on the Development Trends of Chinese Off-patent Drug Industry
- Major Enterprises and Their Operations of Chinese Off-patent Drug Industry - Investment Opportunities of Chinese Off-patent Drug Market |
