The 2024 amended Pharmaceutical Law introduces positive changes, but its impact is expected to materialize in the medium and long term (minimal effects in 2025)
• The 2024 amended Pharmaceutical Law introduces notable improvements compared to the 2016 version on 5 key areas: state policies towards the pharmaceutical sector; new regulations for participants in the industry (foreign-invested enterprises, pharmaceutical workforce); codification of the rights and responsibilities of entities operating in new business models (pharmacy chains, online drug sales); simplification of administrative procedures for new registrations, renewals, modifications, and additions to drug circulation licenses; and the addition of several measures to regulate drug pricing.• These new regulations aim to: transform the pharmaceutical industry into a spearhead sector, encourage research and development activities, and technology transfer; prioritize high-quality domestically produced medicines; establish a legal framework for new business models; reduce administrative burdens for enterprises which enable fast market access for drugs and save resources for pharmaceutical companies to invest in other areas; stabilize drug prices, ensuring public access to medicines at reasonable costs.
• We see growth potential for domestic companies that have production lines meeting high standards (EU-GMP or equivalent). These companies, capable of executing "quality upgrades," will expand profits in the future. Meanwhile, the impact on pharmacy chains is expected to be minimal.
• Although the impact of the 2024 amended Pharmaceutical Law is positive, we believe its effects in 2025 will be limited, as it will take time to translate the law's provisions into guidance circulars and decrees.
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