In a radio broadcast in 1939 Winston Churchill described Russia:
““I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest.”
This might be sage advice to Western executives as they attempt to determine exactly how China’s Food and Drug Administration (cFDA ) plans on reforming their pharmaceutical sector as a part of the much larger major reform underway of their healthcare system.
If one has been astutely watching over the past year, various government statements began to form a mosaic as to where one might anticipate regulatory policy was heading and it’s only within the past few weeks has a clearer picture formed.
Perhaps there is a key emerging, and just like Churchill’s Russia, that key is national interest.
One of the central policies of the Chinese government is to increase the level of health care to all of its citizens. To accomplish this goal, a host of reforms have been undertaken including improvements designed to increase the utility of their hospital systems, attract foreign capital for private hospitals as well as to reduce the dependence of hospitals on the revenue generated from the sale of western pharmaceuticals at its largest tertiary care facilities.
Simultaneous with these policy actions, the government is seeking to promote research, development, and manufacturing capabilities within their domestic pharmaceutical industry to operate at world-class quality standards.
With these strategic objectives in mind, the country with the largest potential drug market in the world has somewhat overhauled its regulations involving the drug approval processes as well as the manufacturing and marketing of new innovative drugs.
The key changes in regulatory policy are designed to address two critical areas of concern: to accelerate the huge backlog of new drugs awaiting review and approval by the cFDA while fostering domestic clinical drug development and manufacturing to international technical and quality standards. Fixing both of these problem areas have the potential to make China a global pharmaceutical force in drug innovation and manufacturing for all types of finished formulations.
One of the central impediments to advancing domestic clinical research and development in China has been the difficulty of research organizations and entrepreneurs to obtain full monetary compensation for their innovations. Prior to reform, only China-based drug manufacturers could apply and obtain approval to manufacture the drug.
Now, with a growing contract research sector in place to support ever increasing R&D efforts, many offering analytical, formulation and development services, including clinical trial manufacturing; the transferal of innovation rights, via the marketing authorization holder (MAH), to large scale manufacturers had to be addressed if the industry is to prosper.
The new cFDA policy, which went into effective December 1, now enables research-based organizations to commercialize their innovations and retain marketing rights. China is launching a pilot MAH program in ten provinces allowing research-based organizations and individuals to outsource drug manufacturing to a contract manufacturing organization (CMO), while retaining marketing authorization status on approved drugs.
This represents a completely novel approach for how multinational pharmaceutical companies may choose to commercially launch new products, especially injectables. Instead of importing a product and rely on sourcing from half a world away, aseptic manufacturing via a local CMO can be qualified to source for the Chinese market, thus facilitating rapid entry with the bonus of local customer insight of product requirements, all while preserving the option of eventual organic growth in-house by green-fielding aseptic manufacturing capabilities. Naturally, the final stage of corporate expansion would involve creating the clinical development infrastructures required to support parallel global development, in China, thus supporting a concurrent Fast Track regulatory review option.
Considering that the majority of the top selling drugs world-wide, as well as much of the western pharmaceutical industries’ R&D portfolios, are injectables, the ability to now secure domestic aseptic CMO manufacturing in China offers a new paradigm in terms of the integrated sourcing for a very large market and should better address the limited commercialization of these products currently in China.
Priority one for the cFDA is moving more new drugs more quickly through the development pipeline. The reasons for streamlining the review of innovative drugs are two-fold. First, you can’t advocate for world-class clinical development sector when review and regulatory approval of this technology, rarely is approved in a timely manner. Second, China faces growing public health threats that stand to benefit from efficacious treatments. The backlog stymies China’s economy and the health of the nation. So they’re fixing it.
In this regard, the cFDA has significantly expanded the types of drugs that may qualify for a streamlined review process via the Fast Track, often called “green” pathway and have redefined what qualifies as a new drug. Prior to the policy change, the Fast Track regulatory approval pathway was limited to novel drugs not approved for use anywhere in the world or drugs addressing areas of critical unmet medical needs.
Here are the drug categories that stand to benefit from China’s redefined Fast Track regulatory approval pathway:
- Pediatric/geriatric drugs;
- Drugs sponsored by national science and technology related grants;
- Drugs to treat diseases or conditions prevalent in China;
- Foreign innovative drugs manufactured locally in China;
- Foreign drugs manufactured at an US-FDA or EU-EMA qualified plant under review by the respective regulatory authorities (FDA/EMEA) for concurrent marketing authorizations; and
- Innovative drugs using advanced technology, using innovative treatment protocols or having significant clinical benefit.
Fast Track approval will be permitted if a new drug falls in one of the above categories – if a clinical trial application is submitted three years prior to the date of patent expiration or the marketing authorization application is submitted one year prior to the date of patent expiration.
Also, the cFDA clinical trial application process will be streamlined; a single umbrella approval will replace the current system requiring approvals at each trial phase.
Here’s where it gets interesting. The new policies also clarify what constitutes a “new” drug. The cFDA now defines new drugs as only those pharmaceutical products that have never been marketed anywhere in the world or those that represent an improved form of the new drug while generic drugs are defined as pharmaceutical products that are consistent with the reference or originator drug in terms of quality or efficacy.
I defer to Churchill’s quote as to what exactly all of these changes mean, but with the cFDA facing thousands of backlogged drugs for a relatively new and lean organization, but with a mandate to accelerate innovative new drugs with an expanded Fast Track Pathway, I would venture that any new drug not on the fast track pathway would require patience.
cFDA Announcement on 11/5/2015 of the Pilot Program for MAH http://www.sfda.gov.cn/WS01/CL0051/133921.html
cFDA Announcement on 11/13/ 2015 of Plans on Dealing with Backlog of Regulatory Filings http://www.sfda.gov.cn/WS01/CL0050/134823.html