Core Viewpoint - The upcoming implementation of the "Special Regulations on the Registration Management of Traditional Chinese Medicine" will not lead to a mass exit of traditional Chinese medicine (TCM) products from the market, but rather an orderly withdrawal of non-compliant varieties [2]. Group 1: Market Impact - There will not be a "mass exit" of TCM products; instead, non-compliant varieties will exit in an orderly manner [2]. - The policy targets the re-registration phase of TCM, meaning that products with expired approval numbers must reapply, rather than directly eliminating currently sold products [2]. - It is expected that the number of market products will decrease by 30% to 40%, focusing on "zombie approvals" and low-quality varieties that lack clinical value and safety data [2]. Group 2: Safety of Existing Products - Existing TCM products can be used normally, as the policy aims to address the shortcomings in safety information on product labels rather than questioning the clinical value of TCM [3]. - The policy specifically targets the re-registration phase, ensuring that current stock and products on the market remain compliant and unaffected [3]. - Leading companies in the TCM sector have already invested in supplementing safety evaluation data, allowing them to successfully revise product labels [3]. Group 3: Pricing Trends - There will not be a widespread price increase; instead, prices will become more reasonable and transparent [4]. - Price regulation is being enforced, with several provinces implementing a tiered management system for TCM prices to eliminate excessive pricing and disparities [4]. - The fourth batch of TCM centralized procurement has begun, which includes OTC products and some exclusive varieties, potentially leading to an average price reduction of over 40% for TCM [4].

Core Viewpoint - The implementation of the "zombie" approval document regulation by the National Medical Products Administration (NMPA) is expected to lead to the elimination of over 70% of existing traditional Chinese medicine (TCM) approvals that have safety information marked as "unclear" after a three-year grace period, significantly impacting the market [1][3][5]. Group 1: Regulatory Changes - The "Special Regulations on the Registration of Traditional Chinese Medicine" issued by the NMPA aims to promote the innovation and development of TCM, emphasizing the importance of clinical value and risk assessment in drug registration [3][4]. - Article 75 of the regulation states that any TCM with unclear safety information in its instructions will not be re-registered after three years from the regulation's implementation date, which began on July 1, 2023 [1][3]. Group 2: Industry Response - Many TCM companies reported that the impact of the new regulation is minimal, as they have already begun to improve the safety information in their product instructions [4][5]. - A significant number of TCM companies have identified around 40 products that require updates to their safety instructions, with plans to complete the re-registration process by 2030 [4][5]. Group 3: Market Implications - The regulation primarily affects "zombie" approval documents, which refer to products that have been registered but are no longer produced or sold, lacking necessary safety monitoring data [1][5]. - The overall market impact is expected to be limited for actively marketed TCM products, as companies are likely to prioritize the re-registration of their key products [5][6]. Group 4: Safety Monitoring Data - The National Adverse Drug Reaction Monitoring Center reported that in 2024, there were 2.866 million adverse drug reaction reports, with TCM accounting for 12.1% of these incidents [5][6]. - The proportion of serious adverse reactions related to TCM is lower than that of chemical drugs, indicating a need for continued attention to safety in TCM usage [6].

Core Viewpoint - The new regulations from the National Medical Products Administration (NMPA) regarding traditional Chinese medicine (TCM) registration are set to significantly impact the industry, with over 70% of existing TCM products potentially facing elimination due to safety information issues in their labeling [1][5]. Regulatory Changes - The "death clause" in the new regulations mandates that any TCM product with unclear safety information in its labeling will not be approved for re-registration after July 1, 2026 [1]. - The NMPA has already begun implementing these regulations, requiring several commonly used TCM products to supplement core safety information for re-registration [2]. - A new set of regulations for TCM production supervision will take effect on March 1, 2026, raising industry entry barriers and imposing stricter requirements on the entire supply chain [2]. Industry Dynamics - The TCM industry is experiencing a stark divide between leading enterprises and smaller firms, with significant revenue disparities; for instance, the top company, Baiyunshan, reported revenues of 61.606 billion yuan, while smaller firms averaged around 6 million yuan [3]. - The cost of compliance for smaller firms is substantial, with estimates suggesting that a traditional TCM product may require an investment of at least 20 million yuan over three years to meet safety data requirements [3]. - Leading companies like Yunnan Baiyao and Tongrentang are proactively streamlining their product lines and focusing on core products backed by clinical data, while many smaller firms are left with limited options [3][4]. Market Trends - The regulatory changes are expected to lead to a significant increase in industry concentration, with predictions that leading firms will retain over 70% of their core products, while mid-tier companies may lose half of their approvals within two years [4]. - A nationwide price regulation initiative is underway, targeting low-quality TCM products and establishing minimum treatment costs for various medications [4]. - The dual approach of safety data requirements and price regulation is anticipated to further compress the market for low-quality TCM products, pushing the industry towards a focus on quality over quantity [5]. Strategic Responses - TCM companies are advised to pursue three main strategies: conducting real-world studies to enhance safety data, reclassifying promising products as improved new drugs, and voluntarily canceling low-value approvals to concentrate on core offerings [6]. - The future TCM market is expected to see heightened entry barriers, with products lacking safety data losing market access, and reimbursement mechanisms favoring clinically valuable products [6]. - The ongoing regulatory overhaul is viewed as an opportunity for the industry to shed low-quality products and focus on those that can withstand scientific scrutiny and gain patient trust [6].