CFDA Publishes New Guidance for Domestic Generics

On August 17, 2016 the CFDA published new guidance for domestically manufactured generic drugs. 17,000 registered products spanning 289 types of generics must be assessed for quality and therapeutic efficacy prior to the end of 2018. The release from the CFDA provided detailed explanations on how to go about the assessment. According to rough estimates, the work should take around 22 months to complete. Therefore, companies need to begin by the end of 2016 or the beginning of 2017 at the very latest. Some domestic Chinese analysts have predicted that the evaluation requirement will lead to more M&A activity in the generic drug sector, as smaller producers of generics that have difficulty fulfilling the requirements end up being absorbed by larger companies. As in many sectors in China, the generic drug market currently has many small players whose drug quality is not always high.