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By 2014 China pharmacy market will overtake Japan

The volume of domestic pharmaceutical production in China has significantly increased in the first half of the current year. During the period from January to July 2011 the value of the Chinese pharmaceutical industry is amounted to 802.4 billion renminbi (about $126 billion), which is 29.6% more than in the same period of 2010.

China is likely to publish a plan before the end of this year for the development of its pharmaceutical industry during the 12th Five-Year Plan (2011-2015) to help realize 20 percent year-on-year growth in total output value, China Securities Journal reported Wednesday.

The Chinese government is making its sincere active efforts for the development of domestic pharmaceutical production in the country. Earlier this year the government announced plans to make an investment of 5 billion renminbi ($759.3 million) in the production of active pharmaceutical ingredients, and recently reduced the maximum retail prices for 1,265 drugs present in the local market.

Currently, the Chinese pharmaceutical industry has the world’s largest manufacturing capacities, producing more than 4,500 drugs in more than 60 dosage forms. In recent times, China is the manufacturer of 90% of pharmaceutical substances to the global pharmaceutical industry and a major exporter of such products as acetylsalicylic acid and metamizole, and also of antibiotics and vitamins.

Chinese pharmaceutical production is highly competitive, mainly due to low manufacturing costs. This is because it has cheap labor and electricity, as well as the lack of strict laws on environmental safety. China’s government is seen to welcome the establishment of joint ventures in the country with the participation of foreign investors, most of which are focused on the production of generics. The country also has strong domestic companies, which account for 73% of the domestic pharmaceutical market, with the three leading national drug makers making up 14.5% of national sales.

Thus, according to the Chinese State Department for Control of Food and Drugs, the expansion continues in the second half of 2011 and there is a possibility that cumulative growth rates for 2011 may reach 35% compared to 2010.