Recently, the National Medical Products Administration (NMPA) has been frequently publishing delivery notices for drug notification letters on its official website. Generally speaking, delivery of such a notification letter indicates that a marketing authorization application has been “not approved,” or that the applicant has proactively withdrawn the application after anticipating it would not pass review. Based on statistics compiled by Yicai (First Financial) from the NMPA website, from the beginning of December through December 19, the list involved 167 drugs, of which 102 were chemical generic drug applications (based on acceptance numbers starting with CYHS). In other words, in December, 102 chemical generic drug marketing applications were either rejected or withdrawn—double the number in November. What signal does this send?

These Generic Drug Applications Are Running Into Headwinds

Since December, which specific chemical generic drug applications among these 102 were rejected or voluntarily withdrawn?

By therapeutic area, the applications span cardiovascular and metabolic diseases, the nervous and respiratory systems, anti-infectives, oncology, ophthalmology, dermatology, gastroenterology, and more. The drugs involved include sacubitril/valsartan sodium tablets, sitagliptin/metformin extended-release tablets, vortioxetine hydrobromide tablets, ciclesonide inhalation aerosol, levofloxacin tablets, etc. For some products, multiple manufacturers encountered difficulties with their applications. The allergy drug bilastine involved the largest number of companies—six in total—including Shandong Langnuo Pharmaceutical, Yangzijiang Pharmaceutical Group Beijing Haiyan Pharmaceutical, Jiangsu Hechen Pharmaceutical, among others, covering oral solution, tablets, and orally disintegrating tablets. Following bilastine, three companies were involved for both the brexpiprazole product line for psychiatric disorders and the levofloxacin antibiotic series; the antihypertensive levamlodipine besylate tablets involved two companies. In a few cases, listed companies issued announcements to explain the situation. For example, Jiudian Pharmaceutical’s anti-inflammatory and analgesic indomethacin gel patch was also on the delivery list. The company stated that additional trial data were required; after communication with the Center for Drug Evaluation (CDE) of the NMPA, it decided to withdraw the registration application, and will restart the filing process after supplementing and improving the relevant studies. A generic drug manufacturer whose application was rejected told Yicai reporters that the issue this time mainly concerned the active pharmaceutical ingredient (API), and was unrelated to the company’s formulation itself.

Tighter Approval Review

Among the drugs whose applications were rejected or withdrawn this time are not a few major market products, or products that already have a large number of approved manufacturers. Take amlodipine besylate tablets, a common antihypertensive, for example: the originator drug is Norvasc, and more than 60 generic manufacturers have already obtained marketing approvals. Several industry insiders told Yicai reporters that, judging from current developments, the review and approval of chemical generic drugs is trending tighter. In their view, policy signals are also pointing in this direction. Two draft documents organized and drafted by the CDE of the NMPA—“Major Defects in Pharmaceutical Research for Chemical Generic Drugs (Trial) (Draft for Comments)” and “Major Defects in Bioequivalence Studies for Chemical Generic Drugs (Trial) (Draft for Comments)”—were released on December 3. In the former draft, for major defects, applicants would no longer be asked to provide supplementary materials; instead, a decision of non-approval would be made based on the submitted dossier. The latter draft provides detailed descriptions of major defects in bioequivalence studies for chemical generic drugs, including insufficient or inadequate bioequivalence studies, deficiencies in analytical testing, deficiencies in statistical analysis, insufficient justification for protocol deviations, and errors or omissions in the submission dossier, aiming to clarify what constitutes major defects in bioequivalence research. “At the beginning of this month, the CDE clarified the standards for generic drugs failing review, and then we saw a sizable wave of withdrawals; this appears to be a consistent follow-through of policy implementation,” said Zhou Liyun, Chairman of PharmaCube (Yiyao Mofang).

Reducing Low-Level Redundancy

China is a major producer of generic drugs. In recent years, the inclusion of more innovative drugs in the national reimbursement list and the expansion of volume-based procurement (VBP) have significantly compressed generic drug margins—measures intended to steer domestic pharmaceutical companies toward innovation. However, the growing number of generic drug companies and product filings is further intensifying competition in an already mature market. According to the China Generic Drug Development Report (2025) (the “Report”), jointly released recently by the Institute of Materia Medica of the Chinese Academy of Medical Sciences, the China Pharmaceutical Industry Information Center, and the National Institutes for Food and Drug Control, chemical generic drugs still accounted for 50% of the overall pharmaceutical market in 2024. The top 100 chemical generic drug companies by sales contributed 55% of the market, a share showing a slow downward trend. The combined market share of the top 10 chemical generic drug companies—such as CSPC Pharmaceutical Group, Qilu Pharmaceutical, and Hengrui Medicine—has remained stable at around 22%, indicating that market concentration is still relatively low. The Report also shows that in 2024, the number of generic drug varieties that passed, or were deemed to have passed, the consistency evaluation reached 914, a substantial increase from 543 in 2021. Among these, the number of varieties with five or more approved manufacturers increased from 79 in 2021 to 203, with intensified homogenization becoming the backdrop of generic drug competition. An industry source told Yicai reporters that some generic drug companies may initiate many generic projects each year, with investment of several million yuan per project; compared with the R&D costs of innovative drugs—which can exceed hundreds of millions or even billions of yuan—this cost remains relatively low. In past rounds of chemical drug VBP, some products saw aggressive bidding due to the sheer number of competing companies. Efforts to curb “involution”—excessive low-value competition—in the generic drug sector have drawn broad attention. In May this year, a study published in Chinese Journal of Modern Applied Pharmacy by authors from institutions including the National Drug Policy and Pharmaceutical Industry Economic Research Center of China Pharmaceutical University found that China’s generic drug sector faces issues such as low-level repetitive development, and recommended optimizing the review and approval mechanism to support sustained high-quality development of generics. “For products where competition is already extremely crowded, the market value of continued development is very limited. Policy should indeed provide some guidance to reduce involution and avoid unnecessary waste of industry resources,” Zhou Liyun also said.