Chinese pharma regulatory reforms will help to attract foreign investment

China is the second largest pharmaceutical market in the world

Driven by a large population, increasing incidence of chronic diseases and growing investments in healthcare sector, the Chinese pharmaceutical market is forecast to grow at a compound annual growth rate of 30% from $123.7 billion in 2016 to $573.5 billion in 2022.

However, certain barriers such as drug approval delays and a lack of patent linkage rules are a concern for foreign companies operating in the country, says leading data and analytics company GlobalData.

In August 2015, the China State Council issued the “Opinions on Reforming the Review and Approval System for Drugs and Medical Devices.” The council introduced further reforms in 2016 and 2017.

The intention was to “promote the structural adjustment, transformation and upgrade of the pharmaceutical industry and bring marketed products up to international standards in terms of efficacy, safety and quality, so as to better meet the public needs for drugs.”

In 2015, there were only around 70 reviewers to handle an annual load of more than 7000 drug applications in the Center for Drug Evaluation. By the end of 2016, about 600 drug reviewers had been hired with a further 223 new employees added in 2017.

Vikas Bedi, APAC Healthcare Research Director at GlobalData, says: “The increased staff at the China Food and Drug Administration (CFDA) will strengthen the standards for generic drugs approval process, clinical trial review process and the priority review process for innovative drugs. CFDA’s goal is to lower the time for new drug applications from 5 years to around 6 months by the end of 2018 without any backlog.”

Between July 2015 and July 2016, it was reported that around 90% of the 1622 applications had been withdrawn by applicants or rejected by the CFDA owing to the submission of inauthentic or incomplete clinical data.

The number of NDAs awaiting review dropped from 22,000 to 4000 in 2015–2017, while the number of foreign drug approval applications increased from 13 to 37 in 2016–2017.

Compared with 2016, almost double IND applications were approved in 2017 (91 versus 170). The recently enacted priority review system resulted in 50 drugs receiving accelerated entry to the Chinese market in 2017.

Among these were AbbVie’s Humira, Incyte’s Jakafi, BI’s Gilotrif and Celgene’s Vidaza. In terms of co-operativity with drug developers, the CFDA accepted 38% of meeting requests in 2017, which amounted to 321 meetings held, more than double the 118 that were held in 2016.

Bedi adds: “The changes in the clinical trial process have opened up the clinical trial market to all qualified hospitals and to social funding. In May 2017, the CFDA announced that it now plans to accept overseas clinical trial data.”

“Earlier, drugs could be tested in China only if they were approved or had gone through late stage studies in some other country. The cancellation of this requirement allows Chinese sites to be part of multicentre studies. This will also shorten the foreign drug registration process as drugs approved in other countries no longer need to request a clinical trial waiver from the CFDA.”

As some of the reforms are still in the implementation stage, their impact is yet to be measured.

Bedi concludes: “It is expected that reforms like those in the clinical trial processes along with the recent permit to CMOs will help in attracting foreign investment. Further, with the introduction of the patent linkage system, the CFDA hopes to address the existing patent issues and minimise patent infringement cases.”

Companies