China's State Council recently granted a pilot program for cross-border e-commerce retail import of drugs in Central China's Henan Province.1 So far the program covers 13 over-the-counter (OTC) drugs with marketing authorization in China.
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The list of the specific drugs in the program will be jointly released later by Chinese authorities, including the General Administration of Customs (GAC), State Administration for Market Regulation (SAMR) and National Medical Products Administration (NMPA).
The drugs in the pilot program will enjoy the following preferential policies:
0% tentative tariff rate;
value-added tax and consumption tax for the import stage at 70% of the statutory tax payable, for transactions within the limits of a single-time and annual value amount of cross-border e-commerce import.
The pilot program will operate in the "three platforms, one center" mechanism2 as shown in the diagram below. Through the mechanism, pharmacies, patients and offline hospitals can order and purchase drugs from overseas.
Mechanism of Pilot Program for Cross-Border E-Commerce Retail Import of Drugs in Henan, China
The pilot program is expected to cover more drugs, said Ping Xu, CEO of Henan Bonded Group. It is hopeful that anti-cancer and targeted therapy drugs would get the approval for being imported from overseas, he added.
The three-year pilot program will be divided into four phases for four different batches of drugs:
OTC drugs with licenses in China and not in the Cross-border E-Commerce Positive List for Retail Import4, including the 13 drugs that have been confirmed for the program so far;
OTC drugs marketed overseas but without marketing licenses in China;
Prescription drugs with marketing licenses in China;
Prescription drugs urgently needed in clinical settings but without marketing licenses in China.
Earlier in 2019, Beijing had launched a cross-border e-commerce pilot program for medical products. Now the Henan program differs with a pilot list of medical products specially for Henan, in addition to the 2019 version of Cross-border E-Commerce Positive List for Retail Import applicable to the whole country.
How the Henan program goes under the local drug regulator's management will probably be a factor in shaping the future policies introduced by NMPA, the state-level drug regulator in China. After all, cross-border e-commerce of medical products asks more support from local drug regulators, which should better supervise the drugs and coordinate between different departments.
For more updates on Henan's pilot program, please stay tuned to ChemLinked BaiPharm Portal. We will convey its latest news to you.
