China is rapidly emerging as world’s fastest growing pharmaceutical industry. The market is poised to reach $175B by 20221. Faster regulatory approvals and widening market access are some of the major drivers to this growth. China’s rapidly-moving health care industry and unique market characteristics has often required a pharmaceutical company to adopt a China specific development and launch strategy in isolation from other major markets.
What are the key changes in market access and drug approval regulations?
Better Market access in China2 – Rethinking market access and reimbursement
Historically, global pharmaceutical manufacturers have faced several challenges when launching innovative products in China. Getting an entry for innovative products in China’s National Drug Reimbursement List (NDRL) has been challenging, largely due to the infrequent updates to the list and China’s preference for generic drugs. From 2001 to 2016, the NDRL was updated only three times with limited inclusion of innovative medicines3.
However, since 2017, there has been rapid progress in market access. Several constructive steps have been taken to address pricing and reimbursement related issues:
These changes are in line with the government’s stated goal of broadening access to high quality care to its citizens.
Changing Regulatory Landscape
Historically the regulatory environment in China has been quite challenging. Some of the major concerns were:
In August 2015, the China State Council issued “Opinions on Reforming the Review and Approval System for Drugs and Medical Devices.” (known as Document No. 44), identifying several problems with drug and device registration. The document contains 36 specific provisions and is an important blueprint for reform of China’s drug and device regulatory system endorsed at a very high level of the government and political system5.
The Innovation Opinion’s 36 provisions focus on following important areas:
Shortly after the issuance of the Innovation Opinion, CFDA issued multiple implementation proposals / reforms
These reforms introduced a fast-track approval process and a potential local-study waiver for products targeting rare diseases or diseases with substantial unmet needs. The review and approval process is much faster and the number of new approvals in China has significantly increased, since 2016.
The Priority Reviews
Over the past years, China has made several efforts to improve the new drug approval process
A steep increase in the new IND and NDA product launches has been seen in China following these reforms.
As an example of fast approval with priority-review status, AstraZeneca submitted its NDA for Tagrisso in early 2017, received approval in March 2017, and had the drug on the market by mid-April of the same year. Tagrisso was approved in China just 15 months after it received US approval—a record for recent years6.
Not only the overseas drugs but also domestic drugs have benefited from the Priority Review Pathway. In 2017, IND for a locally developed Ebola vaccine was approved in record 10 days, although the approval was conditional on a commitment to complete a Phase 3 trial later8. As a direct consequence of these reforms, it’s expected that a significant number of new molecules will reach the market in the next few years, from both multinational corporations and local companies, creating a competitive environment for both development and commercialization
Along with fast approvals, the drug lag in China has reduced significantly. On an average, in 2017 China’s approvals lagged behind the US and EU by 85 and 84 months, respectively; in 2018 the lag shrank to 28 and 31 months respectively9,10
China’s historical delay in drug approvals is diminishing at a fast pace. The country looks toward future with solid objectives for a more accessible and inclusive health care environment. No longer does a local study have to wait until a Phase 2 study outside China concludes. The CFDA’s regulatory reforms, including fast-track approval and a local-study waiver for qualifying products, should be examined and exploited for launch success. Their benefits extend beyond the biopharma manufacturer to China’s enormous population, which awaits the arrival of innovative new drugs.
Although it is challenging to capture the essence of a broad range of market developments in China, this article offers an overview of what we see as several material changes underway in the Chinese pharmaceutical landscape. In line with the Chinese government’s desire to modernize and improve a wide range of regulations, as well as to more closely align with established regulatory systems, these major reforms are expected to have a positive impact on China’s healthcare system, the pharmaceutical industry and patients. The impact of these changes is already starting to become visible and is likely to be heavily tracked and reported over the coming months and years
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