Abstract:In recent years, China has made remarkable progress and breakthroughs in the field of R&D of innovative drugs. Domestic pharmaceutical companies have not only shown strong strength in the traditional field of drug research and development, but also conducted extensive and in-depth research in frontier fields such as biotechnology, genetic engineering and biopharmaceuticals. These unremitting efforts and continuous investment have begun to translate into practical results, and some domestic innovative drugs have successfully entered the clinical trial stage, and some drugs have successfully obtained marketing authorization, providing more treatment options for patients around the world. According to the data of the State Food and Drug Administration, the number of innovative drugs approved by the State Food and Drug Administration for marketing in 2023 will be 40, a year-on-year increase of 90.48%. With the acceleration of new drug review and approval, the pace of approval and marketing of innovative drugs is also accelerating, which further promotes the vigorous development of China's pharmaceutical industry.
1. Definitions and Classification
Innovative drugs refer to drugs with independent intellectual property patents. Compared with generic drugs, innovative drugs emphasize novel chemical structures or new therapeutic uses. According to the degree of innovation, innovative drugs can be divided into first-time innovative drugs (known as original drugs in China), generic innovative drugs (known as improved new drugs in China), chemical drugs, biopharmaceuticals and traditional Chinese medicines according to the registration method, and small molecules, large molecules, cell therapy, gene therapy and living microbial innovative drugs according to the form of drugs.
Second, industry policies
1. Competent authorities and regulatory system
The competent authorities of the innovative drug industry are mainly the State Food and Drug Administration, the National Health Commission, the National Medical Security Administration, the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the Ministry of Ecology and Environment.
The State Food and Drug Administration is responsible for the safety supervision and management, standard management, registration management, quality management and post-marketing risk management of drugs, medical devices and cosmetics, the management of licensed pharmacist qualifications, the organization and guidance of the supervision and inspection of drugs, medical devices and cosmetics, the external exchanges and cooperation in the field of supervision and management of drugs, medical devices and cosmetics, the formulation of relevant international regulatory rules and standards, and the guidance of the drug regulatory departments of provinces, autonomous regions and municipalities directly under the Central Government.
The National Health Commission organizes the formulation of national health policies, coordinates and promotes the deepening of the reform of the medical and health system, organizes the formulation of national drug policies and the national basic drug system, organizes the formulation and coordination of the implementation of policies and measures to cope with the aging of the population, supervises and manages public health, medical services and health emergencies, and is responsible for family planning management and services.
The National Medical Security Administration formulates draft laws and regulations, policies, plans and standards for medical security systems such as medical insurance, maternity insurance, and medical assistance, formulates departmental rules and organizes their implementation, formulates bidding and procurement policies for drugs and medical consumables and supervises their implementation, and guides the construction of bidding and procurement platforms for drugs and medical consumables; organizes the formulation of unified urban and rural drugs, medical consumables, and medical service projects. Establish a dynamic adjustment mechanism for medical insurance catalogues and payment standards such as medical service facilities, formulate negotiation rules for access to the medical insurance catalogue, and organize their implementation.
The National Development and Reform Commission (NDRC) is responsible for organizing the formulation of comprehensive industrial policies and promoting the implementation of innovation-driven development strategies. The Ministry of Industry and Information Technology organizes the formulation and implementation of plans, policies and standards for high-tech industries involving biomedicine, new materials, aerospace, and information industries.
The Ministry of Ecology and Environment of the People's Republic of China is responsible for establishing and improving the basic system of ecological environment, for the overall coordination, supervision and management of major ecological and environmental issues, for the supervision and management of environmental pollution prevention and control, for supervising and managing the implementation of national emission reduction targets, for guiding, coordinating and supervising the work of ecological protection and restoration, and for supervising and enforcing the law of ecological environment. The pharmaceutical manufacturing industry is mostly a heavily polluting industry, and the investment and production of enterprises in the pharmaceutical industry must meet environmental protection requirements.
2. Industry-related policies
In recent years, China's innovative drug industry has been highly valued by the government and supported by national industrial policies. The state has successively issued a number of policies to encourage the development and innovation of the innovative drug industry. In January 2024, the State Council issued the "Pudong New Area Comprehensive Reform Pilot Implementation Plan (2023-2027)", proposing to establish a biomedical collaborative innovation mechanism, promote medical institutions, universities, and research institutes to strengthen clinical research cooperation, and allow new biomedical products to be priced with reference to similar international drugs in accordance with relevant regulations, and support the development of innovative drugs and medical device industries. Support the construction of a Yangtze River Delta medical organization bank that conforms to international medical ethics and management operating rules. This will help strengthen the industry-university-research cooperation of innovative drugs, accelerate the research and development process of innovative drugs, improve R&D efficiency, and shorten the time to market of new drugs. At the same time, through cooperation, resource sharing can be realized, R&D costs can be reduced, and R&D success rate can be improved. In addition, allowing innovative drugs to be priced with reference to similar international drugs can better reflect the R&D cost and market value of innovative drugs, which is conducive to the commercialization and application of innovative drugs.
Third, the development process
The development of China's innovative drug industry has mainly gone through four stages. In the early days of reform and opening up, China's pharmaceutical industry mainly focused on the production of generic drugs and the introduction of production technology, and the research and development of innovative drugs lagged behind, and external technical cooperation was the main means. In the 2000s, with the development of the economy, the government began to encourage innovation and gradually increased its support for the research and development of innovative drugs. Domestic pharmaceutical companies have gradually increased R&D investment, begun to carry out independent innovation, and at the same time introduced and digested foreign advanced technologies. In the 2010s, in the 12th Five-Year Plan, the government emphasized innovation-driven development, and the research and development of innovative drugs became an important goal. Domestic pharmaceutical companies continue to increase R&D investment, actively expand international cooperation, and accelerate the process of new drug research and development. Since 2020, the government has successively introduced a series of policies to support the R&D of innovative drugs, such as simplifying the approval process and providing tax incentives. Chinese pharmaceutical companies are gradually emerging in the world of innovative drugs, and some innovative drugs have obtained international registration and market listing.
Fourth, industry barriers
1. Technical barriers
The development of new drugs involves complex knowledge in the fields of biology, medicine and pharmacy, which requires developers to have a deep foundation and professional knowledge. In addition, the R&D cycle of new drugs is long and the investment is large, which requires highly specialized R&D teams and advanced laboratory facilities. Many domestic companies are relatively weak in this area and find it difficult to undertake large-scale research and development of innovative drugs. At the same time, the research and development of new drugs also needs to master advanced drug screening technology, pharmacodynamic evaluation technology, pharmacokinetic technology, etc., and the mastery and application of these technologies are also an important part of technical barriers.
2. Market access barriers
R&D of innovative drugs is a complex process that requires huge amounts of capital and long-term investment, and companies must overcome many challenges in the process, including R&D risks and market risks. Due to these factors, the entry threshold for the innovative drug market is high, and only companies with strong financial strength and long-term strategic vision can gain a foothold in it. In a highly competitive environment, companies need to have strong marketing and sales capabilities to differentiate their products and compete with other similar drugs.
3. Strict regulatory approval system
The National Medical Products Administration (NMPA) is responsible for approving the marketing of drugs and setting high standards for the safety, efficacy and quality of drugs. Applying for the marketing of innovative drugs requires clinical trials, a large amount of data and research reports, and a rigorous review process. This strict approval system ensures that innovative drugs meet international standards and ensures the safety of patients, but at the same time, it also increases the difficulty and time cost of innovative drugs entering the market.
Fifth, the industrial chain
1. Analysis of the industry chain
The upstream of the innovative drug industry chain is mainly raw material suppliers, including APIs, pharmaceutical intermediates, pharmaceutical excipients, medical packaging materials, etc., the middle of the industrial chain is the R&D and production enterprises of innovative drugs, and the downstream of the industrial chain is medical institutions and retail pharmacies.
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