Comparative Research On The Pharmaceutical Industry Regulation System In USA And China

The safety and efficacy of the drugs is closely relative to human's life safety and health. The pharmaceutical industry development has important effect on a country's economic development and social stability. Because of the particularity of drugs which could result in the asymmetric information of the drug quality, the use method and so on between consumers, drug-enterprises, and doctors, the government must establish the strictest quality regulation system of the entire process of the drug research, production and circulation. The pharmaceutical industry regulation is an officially institutional arrangement, embodied by the form of administrative law. Under the new situation, researching the regulation effect of pharmaceutical industry and proposing how to improve the pharmaceutical industry regulation system, are helpful in guaranteeing human's life safety and health, protecting the reasonable competition, and promoting effective competition.This paper utilizes the information asymmetry theory, the principal-agent theory and other correlative economic theories with special attention to the new drug approval system, carries on the comparative analysis research, between USA and China, on current situation of the pharmaceutical regulation system, the effect of CAC policy, the design and the effect of the incentive policy, explores the reasons of difference between these two countries, and finally gives out some suggestions about the reform of China's pharmaceutical industry regulation system according to the advanced regulation experience.We first carry on with the summary to new drug approval current situation in USA and China, pointing out that the function allocation of FDA in USA has characteristics of independence, centralization, fairness and so on, and also presenting the scientific nature, the fairness and the transparency in the concrete approval flow. At present, the advantage of new drug approval function allocation of SFDA in China is that it can induce the central government and the local government to play active role. The disadvantage is in the concrete approval flow, the central administrative approval department can not provide experts and technical support, as a result of, the technical matters rely on the subordinate technical institution, the regulation department is not responsible for the authenticity of application data, which cause the phenomenon of fake drug. Then, we compare the effect of CAC policy of new drug approval of FDA and SFDA and the reason of how these differences come into being, and discover that, because the scale and degree of development of drug-enterprises of both countries are different, the static effect of the CAC policy of FDA could be more efficient than that of SFDA. Because the executive cost of the safety standard of new drug approval of FDA is obviously smaller than that of SFDA, and the loss of the government is deficient in carrying out its responsibility in USA is also bigger than that in China, the motivation of enhancing new drug safety of drug-enterprises in USA would be bigger than that in China. In incomplete information condition, foreign scholars estimated R&D function relating number of new drugs developed to expenditure in real dollars by fitting the data of U.S. pharmaceutical industry, and pointed out that the new drug approval policy would have negative dynamic effect on the number of new drug introduced every year and have positive dynamic effect on R&D expenditure, but after sorting the data of China, the positive dynamic effect on R&D expenditure can also be presented, while the significance of negative dynamic effect of policy can't be presented.Then, the comparative analysis on the optimal incentive policy design of new drug approval, as well as the executive effect, of FDA and SFDA, seems to discover that, based on that the function allocation of FDA new drug approval central department is the centralization-like, SFDA is the decentralization-like, although the policy goal of both is same, SFDA policy design must face more constraints, and the optimal contract appears to be less efficient compared with that of FDA. The final equilibrium outcome also has indicated, in the same objective situation, the FDA incentive policy will give the drug-enterprise and the technical approval supervisor less reward than that of SFDA, which means that the FDA new drug approval policy design has manifested in the cost superiority and demonstrated the economic efficiency. Because the concentration of pharmaceutical industry between USA and China is different, the utility of drug-enterprises in USA is large than that of China and it will due to Chinese drug-enterprises have no incentive to research and develop new drug. The new drug approval policy of FDA is also more efficient in the actual operation process compared with SFDA, because of the reasons, such as SFDA lacks the good re-evaluation mechanism of drugs, is unable to provide evidence, the drug-market is not sound (repetition, disorderly competition) and law does not prescribe the responsibility to technical approval supervisor which result in the SFDA new drug approval policy actually deviated from the conclusion discussed here.Finally, based on the problems of pharmaceutical industry regulation system of SFDA and according to the advanced experience of FDA, we give out some suggestions to improve the regulation system, like to reduce the range new drug definition, to carry out dynamic GMP regulation to drug-enterprises and so on.