“Let your plans be dark and impenetrable as night and when you move, fall like a thunderbolt.”

Sun Tzu, The Art of War

Sun Tzu’s The Art of War is a time-honored classic that defines the strategies and tactics of military conquest. However, it is not the model to follow when formulating drug regulatory statutes to support a nation’s budding world-class pharmaceutical industry—something the Chinese should take to heart.

Over the past year, China’s FDA (CFDA) has re-written laws governing drug regulatory review and approval along with the classification system that defines what constitutes a “new” drug. The CFDA has been very clear about specific disease states they are targeting for better treatment options, and have expanded their Fast Track Drug Approval Pathway to facilitate ways innovative drugs can qualify for prioritized review and approval.

Not everything is clear. Some of the CFDA’s proposed changes to new drug classifications are illogical in the face of reality. Case in point: while innovative, biologically derived drugs, including biosimilars, will be considered new, the requirement that novel chemically-derived drugs must “never have been marketed anywhere in the world” before applying in China creates an impossible prerequisite for foreign pharmaceutical companies. Additionally, reinforcing concurrent regulatory filing for the CFDA and other major authorities under the threat of not treating foreign innovative drugs as proprietary is not practical, warranted or acceptable to Western MNCs. The net result is Chinese patients will continue to be denied access to highly desired new medications.

The CFDA further muddied the waters* with proposed changes released last week regarding the relationship between a drug’s patent and the way the CFDA will interact with companies that want to copy innovative drugs. These changes appear to be influenced more by Master Tzu’s military strategies to obfuscate, confuse and compound, rather than to provide logical guidance to companies seeking to bring innovative drugs to Chinese patients.

quote-the-supreme-art-of-war-is-to-subdue-the-enemy-without-fighting-sun-tzu-188573While China’s Intellectual Property Rights (IPR) have never served as the bedrock raison d’etre for foreign drug companies operating in China, the proposed regulation, if adopted, could seriously damage China’s desire to foster and develop a world class pharmaceutical sector because it signals disregard for proprietary innovations, western and domestic Chinese.

Bottom line: Without sufficient and clearly understood protections for companies commercializing their innovations in China, there will be no incentive to either participate in the Chinese market nor to innovate in China.

Up until now, the CFDA has exhibited a masterful, sequenced, and comprehensive series of reforms that will help their domestic pharmaceutical industry achieve the goal of offering world-class quality manufacturing and clinical development in China as outlined in the 13th Five-Year Plan. The CFDA’s proposed incentives to Western MNCs were perceived as encouraging the type of transfer of manufacturing and development skills that will help foster and accelerate the local industry. However, last week’s announcement casts a pall over China’s recent progress.

It cannot be overstated how egregiously deleterious that the proposed changes to China’s IPR appear to be if adopted, and how they will be perceived by the same headquarter executives of Western MNCs responsible for making critical decisions such as where to manufacture new drugs and what countries/regions should be involved in the global clinical development of new drugs.suntzu 300px-Enchoen27n3200

It should be noted that whether the intent of these proposed changes do not seriously contemplate actual enforcement does not matter; one cannot formalize a policy/law with the expectation that it will be overlooked. Western MNCs cannot operate that way.

The CFDA has done an excellent job in their recent policy reforms; however, whomever is internally circulating a copy of The Art of War in the reading pool, looking for a regulatory equivalent of the famed “assassin’s mace,” please withdraw it immediately. Otherwise, I can ensure there will be unintended consequences that no one wants!

Questions about the CFDA’s policy changes? Contact David Deere at PaizaBio.

*Actual CFDA announcement (In Chinese)