OTC allows pharmaceutical companies to be more competitive with China's OTC conversion regulations

Business News Agency September 9 News OTC (over-the-counter drug) management in developed countries has a history of several decades. There are a large number of OTC products in the market. In China, with the development of economy and the improvement of people's health awareness, more and more prescription drugs have been converted to OTC to meet the needs of the people for self-medication.

In this article, Sanofi-Aventis (China) OTC drug and political experts combined with the analysis of Chinese and foreign OTC management, answered questions such as OTC's transformation, characteristics, and deep market cultivation, emphasizing legal, regulatory and administrative issues. Management measures strictly regulate OTC approval, sales, advertising, trademarks and labels. At the same time, the successful case of Sanofi-Aventis in the development of the OTC market is also worthy of in-depth study and reference in the industry.

With the development of our country’s economy and the improvement of people’s health awareness, China’s pharmaceutical market has shown a rapid growth trend. In the fast-growing pharmaceutical market, OTC, as an important part of the people's self-medication, shows its strong market potential. Many multinational pharmaceutical companies have begun to explore the OTC market in China.

How will OTC be converted, what are the characteristics of OTC conversion in China, and how can the OTC market be deeply cultivated? Recently, Sanofi-Aventis China (China) Zhou Xuejuan, deputy director of drug administration, answered these questions in an interview.

The power of OTC conversion lies in the needs of all parties

In the eyes of the average person, converting a prescription drug to OTC will benefit the company first. However, Zhou Xuejuan pointed out that OTC conversion actually has the needs of all parties.

For consumers, self-medication for colds, coughs, stomach acid, bloating and other minor illnesses can not only reduce the time cost of going to hospital for queuing, registration, and waiting, but also can reduce the economic pressure at relatively low prices. For doctors, if a large number of mild symptomatic diseases can be transferred to patients for self-medication, then the doctor will have more time for the diagnosis, treatment and research of critical illnesses, which will help improve doctors' treatment and self-worth. For companies, drugs have their life cycle. Once a large number of patented products pass the patent protection period, they will face the impact of generic drugs. Converting prescription drugs to OTC will undoubtedly greatly prolong the product life cycle. Because a good OTC brand will firmly lock in a fixed, large consumer group.

“The dramatic increase in drug costs is a global issue. The proportion of drug costs in health care in developed countries accounts for roughly 10% to 20% of the total. For the government, developed countries including Japan and the United States are actively adjusting their drug policies. In order to encourage companies to produce OTC products, Japan has even liberalized the price management of OTC. One of the main reasons is to reduce the social medical burden through OTC, said Zhou Xuejuan.

Zhou Xuejuan told reporters that since the 70s of the last century, the US FDA has conducted safety assessments of listed drugs and conducted OTC conversions. China's drug classification management began in 1999.

Although both prescription and over-the-counter drugs are listed on the principle of “safety and effectiveness”, as an OTC that does not require doctors' medical advice, their safety requirements are higher, and it is not a long time for a prescription drug to be marketed. Can be converted to OTC. In the principle of patients can self-diagnosis, self-medication, safe and effective, countries have strict regulations and clear requirements for OTC conversion and OTC indications, product formulations.

Foreign OTC conversion regulations

The OTC management system in developed countries has a history of several decades. There are a large number of OTC products in the market. Since the 1980s, in order to further control the sharp rise in drug costs, various countries have accelerated the conversion of prescription drugs to OTC in different degrees. For example, there were a total of 80 prescription drugs converted from OTC to New Zealand drugs between 1983 and 1995, 67 in Germany and the United Kingdom, 54 in the United States, 45 in France, 41 in Italy, and 39 in Spain.

During the conversion of prescription drugs to OTC, various countries have established strict procedures to ensure the safety, efficacy, and information provision of OTC. For example, during the conversion of prescription drugs to OTC in the United Kingdom, in order to ensure the safety of OTC, the United Kingdom requires epidemiological evidence of the safety of drug use; the requirement to prove that drug side effects should be small and disappear after discontinuation; Analysis and related information of the possible risk of inaccurate or delayed diagnosis after use of the drug.

In order to ensure the safety and effectiveness of OTC, developed countries have strictly regulated the approval, sales, advertising trademark and label management of OTC through laws, regulations and administrative measures. Taking trademark management as an example, in most countries of the European Community, prescription drugs and OTC can have the same trademark, that is, the same trademark can have prescription drugs and non-prescription drugs. However, Italy and Spain prohibit the use of the same trademark for prescription drugs and OTC drugs. The brand effect does not cause confusion between a product and other products on the market. Drug managers protect public health by managing the brand or trademark of the product.

Chinese OTC conversion regulations

In China, there are strict procedures for the conversion of prescription drugs to non-prescription drugs. If any of these links does not meet the requirements, conversion work may stop. According to the “Circular on the Evaluation of Conversion of Prescription Drugs and Non-prescription Drugs” issued by the government in 2004, this procedure includes: enterprise applications, reports to the State Food and Drug Administration (SFDA) evaluation center, organization of expert technical evaluations, consultation and re-evaluation, Approval, publication of lists and brochures, etc.; the form of conversion is for the conversion of drug species, as a single species, same dosage form, the same composition, the same specifications can be converted; the combination of enterprise declaration and examination monitoring is adopted, if the enterprise does not declare, However, other enterprises’ declarations can also be converted. The principle of conversion is “application safety, exact efficacy, stable quality, and ease of use”. If the company believes that the product is safe, it must provide proof information. The application data items include review data and pharmaceutical information. , drug safety studies, drug efficacy studies, etc. At the same time, the state implements dynamic management of OTC drug catalogs, and will be converted to prescription drugs if it is not appropriate to be evaluated as an OTC.

In addition to clear regulations on the conversion evaluation of prescription drugs and non-prescription drugs, there are specific requirements for packaging labels and instructions for OTC drugs in order to facilitate patient identification and use. As early as in 1999, the State Food and Drug Administration issued the “Circular on the Promulgation of Special Marks and Management Regulations for Non-prescription Drugs”, explicitly requiring that over-the-counter drug labels be added to the non-prescription drug label; then at the end of 2006, the country The Food and Drug Administration issued the Notice on Further Strengthening the Administration of Non-prescription Drug Instructions and Labels to further regulate the management of labeling and content of non-prescription drug instructions and packaging labels. In addition, as for the circulation and advertisement management of OTC drugs, China has also issued corresponding regulations.

As of 2004, China has already converted six batches of prescription drugs to OTC, totaling 4326 varieties, accounting for about 30% of more than 14,000 drugs.

“China's drug classification management is progressing steadily, but this system is a systematic project that requires the cooperation of various relevant departments of the country, including increasing medical education for patients, further standardizing circulation order, encouraging the creation of OTC brands, etc.” Zhou Xuejuan suggested .

Sanofi-Aventis pioneering OTC market

Zhou Xuejuan introduced that Sanofi-Aventis, as the world's fifth-largest consumer of health products, is actively exploring its OTC business globally.

In July 2008, Sanofi-Aventis and Primary HealthCare Limited entered into a binding agreement to acquire Synbion in Australia. It is reported that the transaction amounted to 560 million Australian dollars. Symbionr manufactures, markets and distributes Nutritional Supplements (vitamins and minerals) as well as over-the-counter medicines in Australia and New Zealand. It has a strong portfolio of premium brands, including NaturesOwn, Cenovis, Bio-organics, GoldenGlow and Microgenics. The company's market share in Australia is estimated at 21%.

In October 2009, Sanofi-Aventis announced the signing of an agreement with Oenobiol, a leading nutritional health and beauty product company in France, to acquire 100% of the company's shares. Oenobiol's turnover in 2008 totaled 58 million euros, of which France's domestic turnover accounted for 85% of its brands for women's health, including hair care, skin care and other care products.

On December 21, 2009, Sanofi-Aventis acquired Chattem, the No. 2 OTC company in the United States, and obtained various dietary supplements of the company, including “Cholesterol Natural Killer” Garlique, a new generation of heart health care. Garlic Cardio Assist, Digestive Medicine Omnigest EZ, Sleep Aid Melatotex, and New Phase to Improve Menopausal Symptoms. Thanks to Chattem’s leading position in the US consumer healthcare market and Sanofi-Aventis’ strong global presence, The acquisition made Sanofi-Aventis the fifth-largest consumer health product company in the world.

The data shows that the vast majority of the sales revenue of Sanofi-Aventis in 2009 came from emerging markets and emerging countries, and China naturally cannot be ignored. Some analysts pointed out that in 2008, the scale of China's non-prescription drug market was approximately 7 billion euros (approximately 70 billion yuan), and it is expected to maintain double-digit growth in the next 5 years. The favorable factors include: the gradual increase in the ability of consumers to pay; the government is increasingly focusing on Health cognition and disease prevention further promote self-care and the development of pharmacy chain and modern commerce.

On January 29, 2010, Sanofi-Aventis and Hangzhou Minsheng Pharmaceutical Co., Ltd. signed a formal contract to jointly establish a new joint venture in the field of health medicine. Depending on the transaction-related prerequisites and government approvals, Sanofi-Aventis has a majority stake in the joint venture. The core assets of the joint venture company include the 21st-generation Jinwei Ta, a leading product of Minsheng Pharmaceutical. As we all know, 21Gold has already had considerable strength and a good brand image in the Chinese vitamin field. The new joint venture will also become a strategic platform for Sanofi-Aventis to enter the Chinese non-prescription drug market.

"China will increasingly become the world's most important non-prescription drug market. Sanofi-Aventis will have a series of measures to further consolidate its strengths in health consumer products, and will also consider bringing many of its health-related consumer products to China." Zhou Xuejuan The Sanofi-Aventis Group is already a leading company in the field of prescription drugs and vaccines in China, and its OTC business will also help build more corporate brands in more consumer minds.