Listeners at today’s live INTERPHEX Signature Series session on China: The New Pharma Frontier, had the opportunity to hear directly from the vice president of the China State Institute of Pharmaceutical Industry (CIPI), Mr. Yu Xiong. CIPI is comparable to the US Pharmaceutical Research and Manufacturers of America (PhRMA).

Mr. Yu provided some well-known stats about China’s amazing pharma industry growth, including that it is predicted to have the third largest drug market in the world be 2013. Increases in revenues in 2010 and 2011 were 25% and 23%, respectively. Biologics revenue in 2010 was $118 billion alone.

The country is looking to expand its R&D market, including by beefing up its leading scientists capacity. China is also eager to bring in more global-harma investment as well as regulatory experts. The government is focusing on drug policy and innovation to help these endeavors. The most recent healthcare reform legislation in China, covering 90% of the population, is a huge step in this regard. With so many more individuals having access to medication and physician care, the global pharma industry has huge opportunities at its front door.

Another opportunity for Western firms thinking about entering the Chinese market is the fact that as China becomes more Westernized, certain Western diseases such as diabetes and hypertension are growing, meaning more drugs will be needed in these areas. Currently, the six top drug categories in China are antibiotics, cardiovascular drugs, diabetes drugs, neurological drugs, GI, and anticancer medications, explained John Choate, CEO of Advanced Pharmaceuticals, a company that helps global pharma companies enter the Chinese market (this includes working with SFDA, the Chinese regulatory agency for drug applications).

SFDA is currently focusing on increasing the safety, quality, and effectiveness of its drug manufacturing and relying heavily on US FDA regulations as a guide. Companies looking to place a new drug in China are going to face more stringent review and approval processes, but if a drug has already been approved by US FDA, the chances of it being approved by SFDA are higher, said Yu.

Also, explained Choate, US FDA approved drugs that are approved by SFDA and are included on the Chinese National Drug Reimbursement list in China typically sell for between two to four times the costs of similar drugs available from domestic Chinese manufacturers. Essentially, US pharmaceutical manufacturers can benefit from higher sales prices and higher profit margins for their unique drug offerings that are approved and distributed in China.

The Signature Series session was moderated by PharmTech’s Michelle Hoffman and will be available in video format in the coming week.

This blog post was updated April 6, 2011.