Korean drug exporters are paying attention to how China’s exemption of import duties on some medicines from May 1 will affect their business.
The Chinese authorities decided to scrap tariffs on 28 drugs, including cancer therapies, from May, according to a recent report by Kim Seong-ae, an official at the Beijing Office of the Korea Trade-Investment Promotion Agency (KOTRA).
Chinese Prime Minister Li Keqiang announced tariffs on cancer drugs would become zero as of May 1, at an executive meeting of the State Council in April.
Since Li’s announcement, the Chinese government has narrowed down the list of imported drugs benefitting from zero tariffs through administrative procedures, Kim noted.
According to data from the Global Trade Atlas (GTA), a global statistics provider, Korea’s export of 28 drugs exempt from tariffs in China from this month reached $98.6 million last year.
Among the 28, antibiotics Cephalosporins were exported to China the most, with $13.3 million products shipped to the country.
Other miscellaneous drugs followed with $6.6 million export, Cefotazol preparations with $6.4 million, Corticosteroids-containing medicines with $3.8 million, and Ceftazidime preparations with $2.2 million.
Among the 28, Corticosteroids-containing medicines had the sharpest export growth, with its shipping to China spiking 291 percent last year. Corticosteroids are known to have a potent anti-inflammatory effect with many side effects.
Export of Cefotazol preparations also surged 256.6 percent in 2017, compared to the previous year. Cefotazol is a second-generation Cephalosporin, used to treat sepsis, peritonitis, bladder infection, and prevent infection during surgery.
“The elimination of the tariffs is aimed at meeting China’s explosive demand for pharmaceuticals and lowering drug prices. Chinese experts forecast that Beijing will release policies to improve China’s drug market,” Kim said in the report.
Kim went on to say that the Chinese authorities were discussing ways to give insurance benefits to imported new drugs, streamline unnecessary distribution processes, and simplify assessments.
“Some critics here say foreign investors hesitate to enter the Chinese market and shun R&D investment due to lack of intellectual property rights. So, the government is seeking to protect intellectual property rights,” Kim added.