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The Week in Review: China Spends $38 Billion on Healthcare in 1H of 2011

publication date: Aug 27, 2011
 | 
author/source: Richard Daverman, PhD
Government and Regulatory

The central government of the PRC spent 245 billion RMB ($38.4 billion) on healthcare in the first half of 2011, an increase of 61% from 2010, according to a report submitted to the country’s governing body (see story). Almost half of that went to improving facilities and insurance coverage, especially in rural areas. China’s insurance plans now cover 90% of its 1.4 billion citizens.

To thwart drug counterfeiting, the SFDA has tightened up some regulations on contract manufacturing organizations, notably on rules governing cross-border interactions (see story). Most significantly, the SFDA will no longer allow third-parties to operate between a CMO and the pharma that holds the marketing authorization for a product. The contact between the CMO and a foreign pharma must be direct.

Deals and Financings

Vasomedical (OTCPK: VASO) announced it has purchased two China-based medical device companies: Life Enhancement Technology and Biox Instruments (see story). Both companies currently serve as manufacturing partners for Vasomedical. The purchase price was $1 million in cash plus 7.4 million shares of stock (a $2 million value) plus an unspecified number of warrants, some of which are performance related. Vasomedical is a US maker of external cardiovascular devices.

Trials and Approvals

Simcere Pharma (NYSE: SCR) reported that Biqi, the company’s branded generic anti-diarrhea drug, has passed EU-GMP inspection, giving Simcere approval to market the drug in Europe (see story). Simcere makes innovative cancer treatments and branded generics, all of which are distributed in China.

Simcere was also granted SFDA approval for Iremod, an oral iguratimod drug classified as a Disease Modifying Anti-rheumatic Drug (DMARD) (see story). It will be indicated to treat active rheumatoid arthritis. Iremod, which was developed by Simcere, will be the first global iguratimod offering. Simcere expected SFDA approval of the drug as long ago as 2009. However, the drug inhibits COX-2, which may have complicated the regulatory process.

WuXi AppTec (NYSE: WX) reported it has been given a certificate of Good Laboratory Practice (GLP) for its Bioanalytical Services (BAS) unit from European regulatory authorities (see story). With the new certificate WuXi is authorized to carry out European-approved ADME (absorption, distribution, metabolism, and excretion) studies, toxicokinetic and pharmacokinetic studies, and hERG assay and biomarker studies.

Company News


Life Technologies (NSDQ: LIFE), the San Diego biotechnology tools company, reported its Q2 results took a 2% hit because of a restructuring of the company’s China sales strategy (see story). During Q2, Life Technologies began to add a direct sales force in China to its existing network of independent dealers. Some dealers were eliminated. When the affected dealers heard they would not be included in the revamped network, they began destocking their Life Technologies inventory. The order slowdown reduced revenues by about $18 million.

Sinopharm (HK: 1099) reported 2011 first-half revenues climbed 48%, benefiting from the company’s massive acquisition program that helped to fuel the growth (see story). There was considerable worry that PRC-mandated drug price cuts would put a severe crimp on Sinopharm’s bottom line, but the company surprised with a 23% increase in net income. The company’s shares reacted positively to the earnings report, rising 16% to end the session at HK$19.40.

Disclosure: none.

 

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