Pharmaceutical Enterprises GMP Authentication Deadline

    In accordance with the provisions of China Food and Drug Administration: Beginning on July 1, 2004, pharmaceutical formulations and bulk medicine production enterprises failing to achieve GMP Authentication shall have their Medicine Production License and corresponding medicine production approval numbers evoked and stop production. Therefore, GMP authentication deadline is vital for several thousand pharmaceutical production enterprises.
    Pharmaceutical SMEs characterized by sound development and shortage of funds suffer most. To pass GMP, it is necessary for them to make great capital investment, improve facilities, and conduct technological transformation. Transformation needs investment. Investment will inevitably result in increase of medicine costs and prices, and consequent low competitiveness. Pharmaceutical SMEs around the country are in a similar situation.
    To pass GMP authentication, some pharmaceutical enterprises have built GMP plants, investing heavily in fixed assets. It is reported that a total investment of RMB20 billion Yuan has been made in fixed assets in China, depressing new product and market development, and even shortage of funds. Meanwhile, GMP plants suffer from inadequate utilization, resulting in a large number of idle assets. According to statistics, pharmaceutical production capacity at least tripled that in 2001, resulting in excess capacity, making about 70% of the enterprises and 50% of the equipment idle. Among pharmaceutical enterprises passing GMP authentication, about 65% face underemployment, about 50% of business owners are striving for new varieties, approximately 60% of SMEs suffer from great pressure on new product development, repayment of bank loans, marketing channel development and lack of funds to varying degrees. It is urgent for the enterprises to obtain benefits in the shortest possible time. If our own businesses fail to have their more and better varieties listed, foreign pharmaceutical enterprises, including “foreign” traditional Chinese medicine enterprises, will rely on varieties and technologies unavailable in China to replace, without any investment, Chinese pharmaceutical enterprises passing GMP authentication with huge funds and enjoy our cheap labor. Probably a considerable proportion of Chinese pharmaceutical enterprises passing GMP authentication with huge funds have handed over their production lines.
    To survive, pharmaceutical enterprises must raise substantial funds for technological transformation of plant and equipment, investing several million, several dozen million investment in fixed assets, resulting in multiple enterprises “suicide” due to their incapacity to purchase raw materials. But failing to make technological transformation, they shall suffer “being killed”.    
    For these reasons, China Pharmaceutical Enterprise Competitiveness Experts have suggested that cash-strapped small pharmaceutical enterprises should not put all their limited funds on GMP transformation, which will lead to sharp increase in fixed capital investment, and huge energy consumption. It is necessary to have strategic alliances, asset restructuring, commissioned processing.