2018年CRI Expert: zero tariff on imported cancer drugs to benefit Chinese patients

Chinese cancer patients will soon be able to purchase more imported anti-cancer drugs at a lower price.

Starting May 1st, imported anti-cancer drugs will be exempt 1 from tariffs 2.

Authorities also say the approval times to get foreign drugs into the Chinese market will be greatly shortened.

To that end, CRI's Liu Min spoke 3 with to John Cai, Professor of Economics at the China-Europe International Business School.

Liu Min: Professor Cai, can you give us an insight on what kind of impact does zero-tariff policy on imported anti-cancer drugs would bring to the cancer patients in China?

John Cai: probably during the past ten years, we've already seen the changes on those cancer patients. Some patients who still want to seek for the new drugs, they'd go to the U.S., go to European countries, go to other foreign countries to try to get the new drugs. So this new policy will encourage the new cancer drugs to import into China, also where we will reduce the cost for the patients. I'm thinking that's really a good benefit for patients to receive the new cancer drugs as soon as possible.

Liu Min: can you brief us a little bit about the current situation of the anticancer drug market in China?

John Cai: the current situation in China, let's see…these new drugs mainly are produced by the multinational 4 foreign companies. Very few Chinese companies are in the RND stage yet. So this new policy will help the multinational company to import drugs more smoothly 5, more effectively to get these drugs delivered to the patients. But on the other side, we also need the social health insurance helps. Because all these new drugs(these cancer drugs) are quite expensive. Without the insurance help, there will be still quite a lot of patients who have financial difficulty to use drugs for quite a long time. It's very difficult.

Liu Min: we know that big pharmaceutical 6 companies such as the New York-based Pfizer Inc. and the U.K.'s Glaxo Smith Kline are the biggest drug exporters to China. What kind of impact to those companies do you expect to see based on the easing of the taxes on medicines, and how about the impact on the Chinese drug makers 7?

John Cai: that's a good question. For the multinational pharmaceutical companies, such as Pfizer and GSK, I'm thinking there will be a favorable impact for their drugs. Because after we reduce or eliminating the tariffs, the production costs of the drugs will be lower. So it will be more easily for those companies to import these drugs to Chinese market. On the other hand, some Chinese companies already started to do in the RND on these cancer drugs, so I'm thinking a more competitive environment between the Chinese companies and the international companies will be created. All in all, I think such competitive environment will bring benefit to the Chinese patients.

Liu Min: do you think the Chinese drug makers would feel a lot of pressure to speed up their research and the production of the new drugs in order to compete with the expensive imported drugs?

John Cai: based on my understanding, the amount of tariffs reduced or even eliminated is only a small part of the total cost of these drugs. Because the price of the foreign made cancer drugs is still quite high. So relatively 8 the Chinese company produced drugs cost much cheaper than the foreign drugs. So to some extent, eliminating tariffs will partially 9 help the foreign companies. But still I think the Chinese companies still have a pretty high cost advantage even that.