China has targeted pharmaceuticals as part of their five-year national economic growth planning cycle and is aggressively advancing its strategy to become a global leader in drug development, commercialization and distribution. With annual pharmaceutical sales growth rate of more than 21% for 2007-2012, China is the second largest market behind the United States. Even with China’s economic slowdown in 2015, the annual growth rate of pharmaceuticals is a healthy 6.6% versus a 1% global average, and is projected to grow at up to 9% through 2020.
Policy Changes: Innovative Drugs, or Need Not Apply
To address the current regulatory backlog and prioritize resources for truly innovative drugs, in late 2015 the Chinese FDA (CFDA) undertook major reforms involving the way new pharmaceuticals are evaluated, approved, manufactured, and commercialized. Collectively, these reforms represent a fundamental change in the way the Chinese pharmaceutical market will operate going forward.
Among the most important changes, the CFDA has redefined and broadly expanded the categories that an innovative drug might qualify for approval under the new Fast Track Drug Approval pathway. In general, drugs considered for approval via Fast Track must be truly innovative and address serious public health threats. Of the six categories, there is only one fully objective criterion for meeting Fast Track qualification: foreign innovative drugs manufactured in China. Coupled with this policy change is the ability for drug companies to engage the services of a contract manufacturing organization to bring approved innovative drugs to market, an option which did not previously exist.
What Do CFDA Changes Mean for Your Corporate Strategy?
China has a large unmet medical need involving multiple disease areas, but few of the newer drugs currently sold in the global markets are available in China Currently, less than a quarter of drugs which have been launched into global markets are available to Chinese patients. The new regulatory reforms at the CFDA are designed to both facilitate rapid approval of new drugs as well as to offer opportunities for innovative drugs that have not been registered in China to have an expedited path to the market.
Seven of the top eight selling drugs in 2014 are biological/large molecule and face patent expiration. Additionally, six are injectable formulation. In reviewing the late stage development portfolio of major research based multinational pharmaceuticals companies (MNC), upwards of 50% will be injectable presentations and 80% biological/macromolecule. To meet the CFDA Fast Track Drug Approval pathway, MNC global development teams should begin planning no later than Phase III for aseptic fill-and-finish contract manufacturing to be conducted in China.
A similar regulatory strategy might be pursued for innovative drugs that have yet to be registered in China but still retain proprietary patent coverage.
The Chinese pharmaceutical market is rapidly changing. The regulatory environment is historically dynamic and MNC Chinese business model need to be equally vibrant to address the emerging realities of China’s drug sector. As an example, while China has few biologicals registered, the Greater Shanghai region alone is emerging as a biologic hotbed with up to 800 companies involved in biopharmaceuticals.
With 1.4 billion consumers, China is larger than North America, South America and the European Union combined, what is your China Strategy?
Explore the Possibilities with PaizaBio.
PaizaBio is the only contract manufacturing organization offering commercial level injectable manufacturing of western pharmaceuticals to cGMP quality standards in China for the Chinese market. Our focus is helping Western pharmaceutical companies meet strategic manufacturing needs in China, while facilitating and meeting China’s new drug approval process.
Contact Us now to explore the possibilities.