On the evening of November 11, 2018, the State Administration for Market Regulation published on its official website the “Vaccine Administration Law (Draft for Public Comments)” (hereinafter referred to as the “Draft”), which comprises 11 chapters. The content covers all stages, including vaccine research and development and marketing authorization, production and batch release, post‑marketing research and management, vaccine distribution, immunization, monitoring and compensation for adverse reactions, safeguard measures, supervisory and administrative oversight, and legal liabilities, and sets forth specific provisions addressing the unique regulatory requirements applicable to vaccines.

　　This draft for public comment builds upon and further elaborates the provisions of the Drug Administration Law, while also strengthening penalties. However, imposing fines as a multiple of the value of the goods lacks practical significance; what matters more is deepening the effectiveness of enforcement. As regulatory oversight tightens, under the new rules, established companies will inevitably strive to enhance product quality and refine their manufacturing‑process standards in order to survive, while smaller, fragmented, and poorly managed firms are likely to be phased out, leading to a further increase in market concentration. That said, for a truly meaningful reshuffling and consolidation to take place, the extent of intervention by the National Medical Products Administration will be pivotal.

　　Analysis and Forecast of Global Vaccine Sales in 2018

　　The best-selling vaccine categories overseas are primarily novel vaccines and multivalent, combination vaccines. Among these, pneumococcal vaccine series, HPV vaccine series, DTaP and its combination vaccine series, measles‑mumps‑rubella‑varicella‑zoster vaccine series, and oral rotavirus vaccine series often serve as the cradle for blockbuster products. According to statistics from the “In-depth Research and Investment Strategy Planning Report on the Vaccine Industry” published by the Qianzhan Industry Research Institute, global vaccine sales totaled only US$25.8 billion in 2013. In recent years, the global vaccine industry has grown rapidly; by 2017, total global vaccine sales had surpassed US$30 billion, and it is projected that in 2018, global vaccine sales will further increase to US$32.3 billion.

　　Analysis of the Global Vaccine Industry Market Structure in 2017

　　Vaccines are subject to extremely stringent safety requirements and pose significant R&D challenges, with only a handful of companies possessing the necessary capabilities. As a result, the global vaccine market is highly concentrated. In recent years, the top four vaccine manufacturers—GlaxoSmithKline, Sanofi, Merck, and Pfizer—have collectively accounted for more than 80% of total global sales. In 2017, these four giants reported vaccine sales of US$6.65 billion, US$5.76 billion, US$6.16 billion, and US$5.60 billion, respectively, for a combined total of US$24.17 billion.

　　China’s vaccine market has vast prospects.

　　As a country with a large population, the growing demand for disease prevention driven by rising living standards has fueled the robust expansion of China’s vaccine industry. Between 2005 and 2015, the size of China’s vaccine market grew from RMB 6.5 billion to RMB 24.5 billion, posting an average annual compound growth rate of 14%. Looking ahead, as the need for disease prevention continues to expand and China’s immunization program is further strengthened and refined, the addition of new vaccine products will unlock additional market potential. By 2020, the Chinese vaccine market is expected to surpass RMB 50 billion, with an estimated five-year compound annual growth rate of approximately 15%.

　　In 2017, China’s vaccine batch release activity rebounded.

　　Vaccine lot release is the sole pathway for vaccines to enter the Chinese market. Category I vaccines account for a large share of lot releases, are priced low, and generate relatively modest profits; in contrast, Category II vaccines face higher regulatory barriers, command higher margins, and are predominantly domestically produced (accounting for approximately 90% of this category). In 2016, following the Shandong vaccine incident, the volume of Category II vaccine lot releases declined significantly. By 2017, vaccine lot release activity rebounded, and HPV vaccines began receiving lot‑by‑lot approval, entering the Chinese market.

　　China is the world’s largest producer of human vaccines, with annual batch release volumes ranging from 500 million to 1 billion vials (doses), ranking first globally. In 2015, there were 43 domestic enterprises authorized to conduct vaccine batch release, including 38 Chinese‑owned companies distributed across 14 provinces and municipalities directly under the central government.

　　Industry concentration may further increase.

　　Compared with the highly concentrated competitive landscape of the global vaccine market, dominated by four major players, China’s vaccine industry exhibits low market concentration and is large in scale but relatively weak.

　　Under the previous regulations on vaccine distribution and the one‑invoice system, large vaccine manufacturers enjoyed distinct advantages, driving industry-wide resource consolidation, increasing market concentration and competitiveness, and fostering the sector’s healthy development. As regulatory scrutiny tightens, the forthcoming new provisions of the Vaccine Administration Law will compel existing companies to further enhance product quality and production‑process compliance in order to survive, while smaller, fragmented, and poorly managed firms are likely to be phased out, leading to an even greater rise in market concentration.

　　Vaccines possess highly distinctive characteristics, and the regulatory framework plays a decisive role in shaping the entire industry’s development. For a genuine, substantive reshuffling and consolidation to take place, the extent of oversight by the National Medical Products Administration is paramount.

　　The most critical issue is that information on vaccine sales, usage, and adverse reactions is all stored in the National Health Commission’s CPC system (Collaborative Product Commerce System). For effective oversight and enforcement, the National Medical Products Administration must gain access to this system; however, no single department or agency currently coordinates the NMPA’s entry into it. As a result, when addressing issues related to vaccines and pharmaceuticals, the NMPA often finds itself at odds with relevant companies and other national authorities. Moreover, the system encompasses data from hospitals, physicians, pharmacies, and other healthcare institutions, making it highly complex. Even if the NMPA succeeds in gaining access, it will still face significant administrative challenges.