China New Policy Pushing Generics over Brands

On Tuesday April 3rd, 2018, the Chinese government published a new policy that promotes the usage of generics over brands in China. As an incentive, the qualified generics companies will be considered as high-tech enterprises, and therefore will be imposed a corporate tax rate of 15% instead of 25%.

Additionally, generic that pass the quality equivalence test will be labeled with the same generic name as the brand in the procurement catalog of hospitals that is used to purchase drugs. Consequently, those generics will be covered by national insurance under the same standards.

In the upcoming months, the government’s will compile and publish the list of drugs for which he would like to have generic versions in China. That list will include medications for rare diseases, major infectious diseases and pediatric treatments, as well as important drugs that are running scarce. Once published, physicians will not be allowed to write brand names on prescriptions, and even if they do, pharmacists will have the right to switch to qualified generics.

The government is also planning to update its intellectual property protection policy to reach a balance between the interests of patent holders and the public, and enforce its anti-monopoly position.

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