China to Cut Taxes for Rare Disease Drugs


It has been announced by China’s State Council that as of March 1st 2019, the government will reduce the VAT on a “first batch” of 21 rare disease drugs and four active pharmaceutical ingredients (API’s) by more than 80% in a bid to get new treatments to market faster.

Historically, China has shown a lack of focus in the development of novel rare disease treatments with the majority of the few available in the country being made by foreign companies.

But, this reduction in the value-added tax rate of the list of 21 orphan drugs could improve review and approval times, and speed up new innovative drug launches and incentivize their development.

This action reflects the country’s new-found commitment to their rare-disease population – last year the Chinese authorities officially released its first national list of rare diseases, only around 20 of which have treatments approved in the country.

The list of the 21 orphan drugs has yet to be made public.

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