In Dec. 2014, China issued the Food Safety
Law (Amendment), among which health-care products would carry out the policy of
filing as a priority and registration as a supplement. This provision lowered
the entry threshold of health-care products industry and brought intense
competition.
On 29 Dec., 2014, the Food Safety Law
(Amendment) (the 2nd draft) was issued officially. The draft involves
health-care products with the following modifications:
Firstly, health-care products with new raw
materials and the first imported health-care products should be registered in
China Food and Drug Safety Administration.
Secondly, other health-care products should
be filed to the food and drug administration at province, autonomous region and
municipal levels before entering into the market.
Registration system refers to the procedure
that a health-care product can be on sales only after obtaining approval number
through administrative means. Filing system refers to the procedure that a
health-care product can be sold if it is registered and filed in related
administrations.
Before the revision, China's health-care
product industry carried out registration system, including the domestic and
imported health-care ones. The procedures were so complicated that the industry
threshold was high. Insiders suggested that it took enterprises 2-3 years to
obtain an approval. Within these time, enterprises needed to invest about
USD32,685-USD49,028 (RMB200,000-RMB300,000). Because of the restriction of this
policy, by the end of 23 Jan., 2015, 14,376 types of the domestic ones were
approved against 729 types of the foreign ones.
Entry threshold indeed played an important
role in the supervision of health-care products in China. According to the
president of Chinese Health Care Product Association, Zhang Dachao, since July
1996, the Ministry of Health of the People's Republic of China issued the
filing to be applied into health-care product industry, no serious food safety
incidents happened in 18 years.
However, it existed some flaws. Some
specified approval could be transferred, leading to some counterfeit and
inferior goods in the market. For example, some enterprises didn’t put into
production in spite of obtaining these approvals, while those who wanted to
enter the market bought from them. The biggest disadvantage of this policy was
that the supervision would be ignored after the enterprises have passed through
review. This act would posed great risks to food safety.
It is anticipated that Chinese health-care
product industry will experience tremendous changes after the implementation of
filing policy.
1. New comers will be on the increase, and
large amount of health-care products will hit the market as Chinese health-care
product industry presents huge prospects, incurring fiercer competition. In
2013, the expenditure of Chinese residents on health-care products exceeded
USD32.69 billion (RMB200 billion) and will increase at the rate of 15%-30%,12%
higher than of the developed countries. It is expected that this figure would
be over USD98.06 billion (RMB600 billion) in 2015, after the policy comes into
effect.
2 Price war might be triggered after the entry of foreign health-care
products with lower price. In fact, 50% of raw materials of health-care
products in the US were from China, but their prices were generally 30%-50%
lower that the domestic ones. It was because the domestic enterprises had to
cost a lot in approvals and they have no price advantage in intense
competition.
3 The simplification of filing procedures ensured
the government to strengthen the supervision over health-care products from
production to sales. Free competition in the market helped to eliminate
enterprises which produced unqualified products. All these contributed to the
reorganization of the health-care product industry.
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Tag: health care