China again announces slashing of import duties on drugs from India

China agrees to slash import duty on Cancer drugs from India. Chinese authorities have announced of slashing import duties on drugs from India twice in as many months. Removing import duty on drugs from India is to reduce bilateral trade deficit or to mitigate need of medicines in China. Answers Punit Rasadia

Recently, Spokesperson of Chinese Foreign Ministry has announced that India and China have reached an agreement on reduction of tariffs on the import of Indian medicines, particularly cancer drugs, to China. Briefing the media

Punit Rasadia, Managing Director, Anlon

persons in Beijing on July 9, the Spokesperson told that China and India have reached agreement on the reduction of tariffs on medicines. The Spokesperson also added that believe expansion of imports and slashing of tariffs on anti-cancer medicines will also usher in great opportunities for India and other countries in the region.

Just before two months, Chinese Ambassador to India Luo Zhaohui twitted a message saying China has exempted import tariffs (duties) for 28 drugs, including all cancer drugs, from May 1st. “Good news for India’s pharmaceutical industry and medicine export to China. I believe this will help reduce trade imbalance between China and India in the future,” the Chinese Ambassador said.

Now, while reading all these communications, I believe there is a context on announcements on why Chinese government become so sympathetic and decided to slash import duty on 28 drugs including cancer drugs from India.

To answer this, let us consider following points:

Increasing number of cancer patients in China

According to a news report by Reuters, experts with the China Academy of Medical Sciences said lung cancer was rising rapidly in groups not normally susceptible to the disease, including women and non-smokers, suggesting that smoking was not responsible for the increase.

An estimated 300 million Chinese people are smokers, but the paper said there had been a rapid increase in a form of lung cancer that develops deep in the lung and is not associated with tobacco use. About 4.3 million people are diagnosed with cancer annually in China, according to a report of the state-run China Central Television.

Cancer is responsible for around a quarter of Chinese deaths, and has become a massive burden on the country’s medical system.

Pollution is the culprit for growth of cancer in China

China has been waging a battle against hazardous air pollution, with concentrations of small, breathable particles known as PM2.5 frequently exceeding 300 micrograms per cubic metre in industrialized regions, the report by Reuters informed. In 2016, national average stood at 47 micrograms, with only a quarter of cities meeting the country’s official air quality guideline of 35 micrograms. The World Health Organisation (WHO) recommends levels of no more than 10 micrograms. Several local studies have also established links between cancer and air pollution. Research published last year by the Hebei Medical University showed that lung cancer mortality rates in the province – known as China’s most polluted.

Water pollution and the excessive use of chemical fertilizers and pesticides has also been blamed for an increase in rural cancer rates.

A study published by the British Medical Journal said China could prevent three million premature deaths a year if it raised air quality to meet WHO guidelines.

Crackdown on polluting industries

The Chinese government acknowledged the problem that environmental pollution had contributed to a surge of cancer cases in the country and decided to tackle cancer by enforcing stringent pollution control norms and series of laws and regulations to protect environment.

A major push to root out industrial polluters systematically began in 2017. Chinese Government inspectors fanned out through industrial areas, closing plants, fining companies, and in some cases jailing plant operators for air and water pollution. It is widely reported that operations at nearly 40 per cent of Chinese factories in 30 industrial provinces have been interrupted or forced to shut down.

Disturbed domestic drug supply chain

As 40 per cent of Chinese factories in 30 industrial provinces in China have been forced to shut down and many Chinese bulk drug manufacturers have been issued warning letters for violating quality norms, pharma companies which are into formulations are facing a severe shortage of raw materials and other ingredients. The domestic supply chain in China has gone for a toss. US FDA is keeping a close vigil on operational factories forcing Chinese manufacturers to adopt international GMP norms.

Demand-Supply Gap

On one hand number of cancer patients are increasing, domestic drug supply chain is totally disturbed and collapsed leaving Chinese authorities to explore no other options but to slash import duties on oncology drugs from India.

Though many may argue that there is a trade deficit between India and China and recent announcement to slash import tariff on drugs are nothing but a measure to reduce bilateral trade deficit. India has been demanding opening of China’s IT and pharmaceutical sectors as part of measures to reduce over USD 51 billion trade deficit in over USD 84 billion bilateral trade.

Whatever the case may be, the fact is China needs Oncology (Cancer) drugs and that too immediately to save Chinese populations. There are many Indian pharma companies which are into Onco drug productions. Obviously, cancer drugs manufacturing pharmaceutical companies would get benefited with the opening up of cancer drug import policy of Chinese government.

(The author of this article is the Managing Director of Anlon and can be reached at media [at] anlon [dot] in. To know more about Anlon, please visit: www.anlon.in)

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