New version of GMP certification accelerates industrial upgrading

Drug companies face examinations In response to the EU's "Rule 62" on the import of APIs, China revised the GMP (Pharmaceutical Manufacturing Quality Management Specification) in 2011. According to the new GMP requirements, all pharmaceutical high-risk companies must pass certification in 2013. All pharmaceutical manufacturers must implement certification. The production of sterile drugs such as blood products, vaccines and injections should meet the new requirements before December 31, 2013, or else production will cease. However, since the implementation of the new GMP in March 2011, implementation has not been optimistic. As of November 30, 2012, of the 4669 APIs and pharmaceuticals manufacturing enterprises in the country, only 597 companies had received 699 new GMP certificates; 160 companies are expected to abandon the GMP transformation of all dosage forms, and 17% are sterile. Pharmaceutical manufacturers are difficult to pass certification before the prescribed time limit of December 31, 2013.

According to the China Business Daily reporter, due to various reasons, China's new version of GMP has made slow progress. There are more than 200 drug manufacturers in Hubei Province. At present, only 9 high-risk drug manufacturers have passed the new GMP certification and 51 generic drug companies have passed certification. By the end of 2012, all or part of the 25 enterprises in Shaanxi Province had passed the newly revised pharmaceutical GMP certification. It is expected that by the end of 2015, all pharmaceutical companies in the province will complete the new GMP certification.

“At present, about 20% of drug wholesalers and 15% of drug retailers have basically met the basic standards for newly revised drug GMP.” Liu Xiaoping, deputy director of the Department of Safety and Supervision of the State Food and Drug Administration, revealed recently that some small-scale and poorly-funded projects The SMEs have a certain degree of difficulty in facing the new GMP. The GMP standard for pharmaceutical products is the quality management specification for pharmaceutical production. It is a system that ensures the continuous production of drugs under the specified quality and minimizes the risk of unqualified drugs during the production process. GMP includes all aspects of requirements, from plant to ground, equipment, personnel and training, sanitation, air and water purification. Briefly, GMP requires that production companies should have good production equipment, reasonable production processes, perfect quality management, and strict inspection systems to ensure that the quality of the final product meets regulatory requirements.

“After the implementation of the new GMP, fewer than 4,000 of the more than 5,000 pharmaceutical manufacturing companies in the country passed certification, and nearly a third of the companies will withdraw from the market,” said Liu Zhanglin, vice president of the China Chamber of Commerce for the Import and Export of Medicines and Health Products. The new GMP with stricter standards will surely bring greater test to the operating environment of pharmaceutical companies, especially small ones. A group of companies with low profitability will withdraw from the market, while large companies are expected to use the existing capacity and scale advantages to fill the market supply gap.

"The new issue of GMP certification is facing greater impact is the increase in production costs, resulting in a decline in corporate profits." Cao Gang, deputy director of the western medicine department of the China Chamber of Commerce for the Import and Export of Medicinal Products, believes that the plant must be funded by upgrading. In the process of renovating the newly revised pharmaceutical GMP, the cost that companies need to invest is roughly 7 billion yuan. Many small and medium-sized pharmaceutical companies stated that because companies do not have multiple production lines, they cannot rotate production, and hardware upgrades require a long period of time. As a result, companies may experience a situation where their products are cut off during the transformation period, which will make brands and interests more profitable. got damage. However, if the company does not decisively suspend production and transformation, it may be eliminated because it fails to pass the new GMP certification within the specified time. Industry experts believe that companies are very passive in the process of conducting new GMP certifications, lacking overall strategic research and early deployment. For some pharmaceutical companies, the hardware is already very good, and software upgrade is the key.

“Although only a few companies have passed the new version of GMP certification for pharmaceuticals, the new standard cannot be reduced. The time limit cannot be delayed. The inspections must not be allowed to vary in width and severity, and should be loose before the end of the inspection.” Related leaders of the State Food and Drug Administration Said that for enterprises that have not passed the certification due, they must stop production.

The old problem of the industry is still Cao Gang, Deputy Director of the Western Medicine Department of the Medical Insurance Chamber of Commerce, summarizing the current status of China's raw material medicine exports in one sentence: “Old problems remain, and new contradictions are prominent.” Old problems such as overcapacity and rising costs are always lingering. The new contradictions such as the tightening of supervision over international raw material medicines are also increasingly putting pressure on domestic companies. According to data from the Ministry of Industry and Information Technology, in 2012, the growth rate of fixed asset investment in China's pharmaceutical industry increased significantly year-on-year, and the growth rate exceeded the growth rate of the industry's total industrial output value and total assets, showing a clear trend of expansion. In the new GMP reform process, such a rapid investment in fixed assets can easily cause the problem of overcapacity in the raw material medicine manufacturing industry with a relatively low technological content, which in turn drives down the overall profits of the industry and causes vicious competition. This is currently a lot of API companies. The common predicament.

In 2012, there was a negative growth in the profits of the raw material medicine industry. This is rare in recent years. The main reason for the decline in profits is that the ability to absorb environmental protection costs is not high, and the environmental standards have been increasing too quickly. On the one hand, all costs are rising. On the other hand, the prices of end medicines are declining. This brings great difficulties to API companies. Unless companies have strong bargaining power, such APIs are currently Not a lot yet. The issue of RMB exchange rate is still an important factor that restricts the development of enterprises. The continuous increase in the appreciation of the renminbi makes the pressure on the export of bulk APIs and intermediates with low added value continue to increase. The continuous appreciation of the renminbi exchange rate has seriously affected the export of enterprises. The advantage of China's raw material medicine exports in price competition is gradually being lost, and it also poses a certain pressure on the operation of export companies.

“At present, China's pharmaceutical companies still face many unfavorable factors and will pose a severe challenge to China’s exports.” Cao Gang believes that the overall pattern of large, small, scattered, and chaotic pharmaceutical manufacturing enterprises in China has not yet fundamentally changed, and the level of quality management is uneven. . The resulting non-standard production and operation, low level of duplication and excessive competition are the deep-seated causes of a series of drug quality and safety incidents and are major issues that pharmaceutical supervision has long faced and must address. The implementation of the new version of drug GMP is of great significance in promoting the upgrading of the pharmaceutical industry, establishing a more complete drug production and supply security system, eliminating backward productivity, and expanding exports.

At present, the pharmaceutical industry is fiercely competitive and faces challenges while also facing development opportunities. China is a big country in the production and export of APIs. The APIs have the advantages of complete varieties, large scale, high quality, and obvious price advantages. There is no alternative in the short term, and the industrial chain is complementary to the developed countries in Europe and the United States, and each of India's competitors has its own emphasis. China's raw material medicine exports to Europe and the United States market accounted for more than 50% of China's total pharmaceutical exports. Vitamin C, penicillin industrial salt, vitamin E, saccharin sodium and paracetamol and other bulk products have accounted for more than half of world trade volume. About 70 kinds of other raw material medicine products also occupy a large proportion, and have a decisive right to speak in the international market.

In 2013, the pharmaceutical industry will recover strongly and Chinese pharmaceutical companies will seek new opportunities for development. According to statistics from the Medicare Chamber of Commerce, in January-February 2013, the pharmaceutical manufacturing industry realized a total of 272.04 billion yuan in main business income, a year-on-year increase of 22.70%; and total accumulated profits totaled 25.740 billion yuan, a year-on-year increase of 24.30%. Foreign trade in medicine continued its growth trend last year and maintained double-digit growth. The import and export volume in the first two months was US$12.635 billion, a year-on-year increase of 11.54%.

New GMP Certification Accelerates Industrial Upgrades Industry insiders pointed out that the EU “No.62 Order” is equivalent to exerting pressure on Chinese raw material medicine from the outside and will accelerate the pace of upgrading of Chinese pharmaceutical export enterprises. Enterprises with small scale and low quality control level will Eliminated from the game, but it means new opportunities for companies whose products meet European Union standards. It is understood that in China's pharmaceutical export enterprises, enterprises with GMP certification from both China and the EU are mainly large enterprises; the most dangerous is the "two without" products, mostly in the area of ​​Jiangsu and Zhejiang. "The reshuffle of raw material medicine companies is inevitable." Liu Zhanglin, vice president of the China Chamber of Commerce for the Import and Export of Medicines and Health Products, believes that the market itself is cruel and cannot reduce the quality requirements of drugs for the survival of a certain company. In terms of quality control, security, and other aspects, the integration of Chinese pharmaceuticals, including APIs, with the international market has become a major trend. In the long run, GMP certification will enable Chinese companies to improve their quality and technology.

Vice President Liu Zhanglin stated that the China Chamber of Commerce for the Import and Export of Medicines and Health Products will coordinate the promotion of the government to resolve the difficulties in the pharmaceutical industry. Concerning the issue of the European Union’s “Order 62,” which caused major obstacles to China’s export of raw material medicines in Europe, the Chamber of Commerce has repeatedly invited related departments and key enterprises to hold special meetings and accompanied the officials of the Ministry of Commerce and the Bureau of Food and Drug Administration to Europe for consultations. Traders and Indian industry associations have jointly pressed the European Commission, and also cooperated with the Ministry of Commerce and the Food and Drug Administration at the 57th and 58th regular meetings of the WTO/TBT to raise serious concerns about the EU “Order 62”. The current Medicare Chamber of Commerce is collecting feedback from companies and will negotiate with the EU for the next step. "On the other hand, the European Union has a strong dependence on China's imports of APIs, and it should carefully consider China's opinions," he said.

Vice President Liu Zhanglin stated that in the face of the current difficulties, domestic pharmaceutical companies must seize the opportunity for a new round of global pharmaceutical industry transfer to Asia, improve China’s ability to undertake the transfer and absorption of the international pharmaceutical industry, and actively implement the “go global” strategy. Encourage qualified and capable enterprises to invest overseas to set up factories or set up overseas exhibition centers and marketing networks to accelerate foreign investment and expand capital and technology output. It is reported that the 13th World Pharmaceutical Raw Materials China Exhibition will be held in Shanghai from June 25th to 27th. At that time, the “China and the World” Pharmaceutical Forum and the CPHI Pharmaceutical China Summit will bring together the core issues of the pharmaceutical market and the pharmaceutical industry to help companies understand the market’s latest developments, regulatory policies, and find coping strategies and development roads in order to achieve sustainability. Manage, develop and promote the healthy development of the pharmaceutical industry.