Largest market for dietary supplements

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China is considering major changes to its regulatory process for dietary supplements. In order for products—imported or domestic—to sell as dietary supplements in China, companies must currently undergo a rigorous registration process with China’s Food and Drug Administration. The U.S.–China Health Products Association(USCHPA; Lewes, DE)—a group devoted to promoting commerce between the two countries—has published an excellent paper detailing the current problems with China’s dietary supplement process, as well as impending regulatory changes. As it stands, dietary supplement imports to China have basically reached a standstill thanks to the country’s prohibitive regulatory hurdles, USCHPA reports.

USCHPA’s paper describes China’s “blue hat” supplement-registration process (named for the registration symbol’s blue hat logo). This process is not only onerous and lengthy—USCHPA says the administrative process can take up to three years and require companies to invest in clinical trials—it is also costly. At the end of the day, USCHPA says, a registration can cost as much as $100,000. Moreover, these registrations are product specific, meaning that a company must invest in the registration process for each product it sells, regardless of whether products contain similar ingredients.

As a result of the time and expense required, USCHPA says only a select group of companies has invested in registrations—and that these companies now monopolize the supplements market in China, at the expense of other domestic companies. The association writes that:

It is a well known industry rumor that many of these domestic registrations are in fact being held by companies that look to sell them and make profits because transferring a registration from one company to another is faster than going through the entire process. Because the registration process is so costly in both time and capital, there are companies willing to pay for these “pre-registered” products in order to expedite their entry to market.

Moreover, these registrations lean heavily in favor of domestic companies, USCHPA reports, because foreign companies are not willing to invest in what the association calls an “unreasonable regulatory system.” In fact, the association estimates that the U.S. dietary supplement industry alone is losing more than $8 billion in potential exports to China.

One can understand why China would enact such strict laws over healthcare products, considering the safety issues that have long plagued the country. However, as USCHPA points out, prohibiting the entry of well-tested dietary supplements that could improve the health of many people stands contrary to China’s goal of increasing the health of its overall population. Citing United Nations statistics, USCHPA says, “The Chinese government has spent a great deal of effort and money reforming the healthcare system, which has resulted in the increased life expectancy of its citizens from age 45 in 1950 to 75 in 2010.”

The potential for the China health products market is huge—both in terms of sales and healthcare cost savings. Currently, China ranks fourth in sales ($15.8 billion in 2012), behind the United States, Japan, and Europe, USCHPA reports. See an economic analysis USCHPA prepared detailing the potential for U.S. exports to China.

USCHPA also outlines the specific healthcare savings China could see if supplements were more accessible. “China’s huge market and consumer demand should already have made China the largest market for dietary supplements,” USCHPA underlines.

Depending on the form they take, impending regulatory changes could make this possible.

source : nutritional outlook

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