New challenge to drug companies

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The new medicine principle is posing new challenges to China's pharmaceutical industry. It's pushed companies to restructure to adjust to the changes. Reactions from medicine producers have been varied.

For many medicine producers in China, the essential medicine reform is an opportunity and a challenge. A big concern for drug companies is whether or not their medicines will be on the list.

Ji Shouru, vice president of Yangtze River Pharmaceutical Co., said, "It's better for us if our products can be on the government list of essential medicines. The patients would receive higher refunds which would mean good sales for us."

Some producers have explored ways to be more competitive. This company has accelerated innovation of new medicines.

"We predict that medicines for cancer treatment will have more market prospects and can be used on larger group under the new principle. So we're studying the new drug half a year ahead of plan."

As essential medicine principle will apply to expanding regions across the country, there will be potential market for those in the lists. Medical institutions will mainly rely on essential medicines, which means lower prices and higher refunds for patients. But for the non-essential medicine producers, their market may shrink.

Experts are urging efforts to combat illegal competition that is likely to come after reform. And pharmaceutical enterprises are advised to expand production to meet the potential market demand while ensuring prices and cutting costs. They also need to improve services. Those who fail to meet the quality and market demand may be out of the essential lists by the government.