Panacea or problem?

Nicolas Zhu has recently been interviewed by China Business Law Journal to talk about the trends, opportunities and challenges of the healthcare, pharmaceuticals and life science sectors in China from the legal perspective.

Nicolas Zhu finds that as China gradually opens the healthcare market to foreign investment. “However, no comprehensive regulations regarding foreign-invested hospitals have been promulgated that can address the establishment of hospitals but also the operation of hospitals,” he says.

He also points out that there is a planned increase in the medical service price to fill up the revenue gap due to this cancellation. “This might increase the use of the medical devices, in particular the advanced imported medical devices, and could be an opportunity for foreign medical devices manufacturers,” he adds.

With regards to compliance challenges, Nicolas advises companies to watch issues about active pharmaceutical ingredients (API) in their agreements on drug technology transfer. “As one requirement for drug technology transfer, the API supplied for a transferred drug before and after drug technology transfer should be the same,” he says. “In many cases a transferor does not manufacture the transferred drug and the API at the same time, so it has to outsource the API.” Given that only drug technology, rather than API, is transferred, there must be some clauses in the transfer agreement to ensure the continuous supply of API, he says. “This may involve the registration of imported API in China [when it comes to] technology transfer of an imported drug to a domestic drug manufacturer.”

The article was firstly published in the March 2016 issue of China Business Law Journal magazine.