Concerns of a spike in prices after China's move to lift caps on many drugs effective June 1 still has room to play as the government moves to jawbone companies to hold the line.
But, according to China Daily, prices for traditional Chinese medicine (TCM) have fallen every month since May last year--and the trend is expected to continue.
One reason is a supply/demand mismatch spurred in part by increased competition for popular products like codonopsis, a ginseng generic of sorts, and chrysanthemum.
High-quality codonopsis, according to China Daily, sells for RMB350 a kilogram, down from at RMB900 a kilogram ($145.17) in 2013.
"The market may keep going down for a while," according to a report cited by China Daily from the Kangmei Chinese Medicinal Material Price Index.
At the same time, China has taken steps to bring the TCM industry into the 21st century by focusing on quality and safety concerns.
Chinese companies and the government, as well as multinationals, are on the lookout for compounds that could cross over into Western medicine such as artemisinin-based combination therapies, a weed from China that has been responsible for benefiting about 240 million people in sub-Saharan Africa since 2000.
Artemisinin was isolated from the artemisia plant found in China and used for centuries in Chinese TCM.
However, China's biggest TCM trading website, zyctd.com, said the cost of 11 products from a basket of 200 dropped during the week between May 25 and May 31, underlining the near-term problems of an industry that reached RMB120 billion of sales in 2013, according to figures cited by China Daily.
- here's the story from China Daily