More hospital subsidies to boost China's drug R&D

Increasing hospital subsidies would reduce the temptation of demanding kickbacks from drug firms, which in turn would encourage R&D, Gan Rongfu, a senior researcher at China's State Food and Drug Administration has told the Interfax news service. According to the report, Chinese drugmakers are investing only 1% of annual sales revenue in new product R&D, while the top firms in the sector are estimated to spend 5%.

Feng Wenhua, a professor at the Chinese Academy of Medical Sciences, said: "many Chinese drugmakers just want to buy a registered drug from another company, which allows them to obtain profits within just two or three years." He urged firms to take a longer term view and noted that, with greater regulation of the drug market (Marketletters passim), more rigorous testing standards would require greater R&D efforts by drug companies.