China’s pharmaceutical market is the second largest in the world, just behind the United States. The market is projected to see an annual growth of more than nine percent but historically the regulatory environment in China has been challenging, leaving western pharmaceutical companies with limited access. That regulatory environment is now undergoing big changes thanks to reforms instituted by the China Food and Drug Administration (CFDA), which was reorganized to the China Drug Administration (CDA) in March 2018.
The reforms spread across multiple stages of the drug development life cycle and aim to address the lengthy review process needed for new drug approvals. For the clinical phase this will help reduce costs for conducting R&D. At the commercialization phase, the policy changes will minimize regulatory delays and application backlogs and facilitate market access.
These regulatory changes were a topic of discussion at a recent PRA Health Sciences networking event in Shanghai, where Wilson Zheng, Head of Site Management, Asia Pacific/ Bayer Healthcare Co., Ltd., shared his insights. Along with reducing regulatory burdens, the sweeping changes are aimed at encouraging innovation and making the regulations more aligned with international norms.
In October 2017 CFDA released the document, “Opinions on Deepening Review and Approval System Reform and Encouraging Drug and Medical Device Innovation”, with the hope of expanding China’s development of innovative products as well as increasing imports of drugs from abroad. Previously CFDA would not accept clinical trial data developed overseas to support new drug approval. And new drugs developed outside of China could only start clinical trials in country after the Phase I clinical trial was completed overseas. The new reforms will eliminate the need for costly duplicate trials in China and will significantly improve the time to market for new drugs. Following the release of the “Opinions” document, CFDA Director Bi Jingquan noted that from 2001 to 2016, the U.S. FDA approved 433 new drugs, yet only 133 of them were marketed in China.
Chinese Authorities Modernize Drug Regulatory Framework
One significant barrier in China for life sciences companies has been the lack of protection against infringing generic drugs. While laws require that manufacturers disclose any potential conflicts, there are no enforcement or penalty mechanisms. Generics are often approved and sold before a patent holder can initiate legal action. CFDA plans to change this with the expected adoption of a patent linkage system under which drug applicants will be required to make a declaration on patent rights infringement in their applications. Some additional changes include:
- The Market Authorization Holder (MAH) program, originally piloted in ten provinces, will reform the licensing process for drugs and medical devices. Prior to this program, companies were required to have their own manufacturing facilities. This will benefit companies that don’t have the resources to build a manufacturing facility. The MAH program allows companies to contract third-party manufacturers to produce their product. One of the first companies to take advantage of the program was Boehringer Ingelheim. In January 2018 it entered into an agreement to manufacture tislelizumab (a PD-1 monoclonal antibody for treatment of various cancers) for the Chinese-based pharmaceutical company BeiGene.
- To encourage innovation, in 2016, CFDA instituted a new priority review system for drugs not approved anywhere in the world, for those drugs planned to be manufactured in China, and those under parallel clinical trial applications in the US and the EU. These changes have the potential to significantly shorten the review process. Drug categories likely to benefit include pediatric/geriatric, drugs to treat diseases or conditions prevalent in China, and innovative drugs using advanced technology or having significant clinical benefit.
- China has expanded its inspection program for pharmaceuticals manufactured outside of China. This will require companies selling into China to be mindful of Chinese current good manufacturing practice (cGMP) standards or risk immediate suspension of market authorization in China.
- The State Administration for Market Supervision or SAMS, will replace the China State Council in overseeing the newly reorganized CFDA. CFDA offices will no longer operate at the city-level but provincial level. This reorganization and consolidation should allow CFDA to operate more efficiently and effectively.
- CFDA forged a new memorandum of understanding with the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) to exchange information on new areas of drug and medical device regulation. MHRA Chief Ian Hudson stated, “China is a world leader in the market for raw materials for the pharmaceutical industry and closer collaboration with MHRA will support the promotion of innovation, good practice, and protect UK patients.”
- CFDA joined the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). The FDA outlines the mission of the ICH as “to increase patient access to safe, effective, and high-quality pharmaceuticals, and to ensure that pharmaceuticals are developed and registered efficiently.” This was a major step highlighting how serious the CFDA is about advancing pharma and regulatory measures in the coming years.
These transformative changes present exciting opportunities for life sciences growth in China. After working in the China market for nearly a decade, PRA Health Sciences is making further investments in the region with the addition of new offices and expansion of its workforce and services. Recent networking events in Shanghai and Beijing brought clinical development professionals together to learn more about PRA and what is new in the industry.
The recent regulatory policy changes reflect China’s willingness to work with global life sciences companies and their drug development initiatives and paves the way for the manufacturing of new drugs in China and opens access to the Chinese market and its 1.4 billion citizens.