China Life Sciences and Healthcare monthly update - March 2019

State Council will deploy further preferential policies for anti-cancer drugs over 2019, 19 February 2019

In an executive meeting on 19 February 2019, the State Council of the People's Republic of China ("State Council") announced that six preferential policies in relation to drugs are going to be deployed over 2019.

1. The National Medical Products Administration ("NMPA") and the National Health Commission ("NHC") will improve the special approval process for new foreign drugs that cater to clinical urgent needs.
2. The NMPA and the NHC will select and publish the second list of urgently-needed drugs that have been marketed in the United States, European Union or Japan but not in China ("List").
3. China will communicate with the relevant producers of the drugs on the List and any other relevant party and encourage them to file applications in China.
4. Chinese authorities will give conditional approval to urgently-needed anti-cancer drugs if they demonstrate efficacy during the early stages of clinical trials and their clinical values are predictable.
5. China will cut the value-added-tax ("VAT") rate in relation to orphan drugs, which will take effect on 1 March 2019. The VAT rate will be cut to 3% and will apply to the manufacture, import, distribution and retail of orphan drugs and active pharmaceutical ingredients. The first list of orphan drugs has been published by the State Taxation Administration and it will be updated from time to time.
6. Chinese authorities will keep supporting the development of domestic anti-cancer drugs by speeding up the approval process.

To read the official minute (in Chinese only), please click here.

State Council releases the Pilot Program for the Centralised Purchase of Drugs, 17 January 2019

As a measure for cutting drug prices, the State Council released the Pilot Program for Centralised Purchase of Drugs ("Pilot Program") on 17 January 2019. The Pilot Program integrates regular drug purchases in 11 cities into one centralised purchase regime. The centralised purchase regime currently covers Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu and Xi'an. According to the State Council, the centralised purchase regime might be extended to other regions in China.

The centralised purchase regime will be held once a year. Before each centralised purchase of drugs, a Joint Purchase Office will publish the generic names of those drugs to be purchased. Pharmaceutical manufacturers can participate in the centralised purchase regime if it has a drug under the relevant generic name being marketed in China and that drug meets the relevant conditions for quality and efficacy. An international pharmaceutical company should authorise a general agent in China to take part in the centralised purchase regime on their behalf.

To learn more about how this centralised purchase regime works and what effect it has to the pharmaceuticals market, please read our previous article here. To read the full text of the Pilot Program (in Chinese only), please click here.

NMPA releases the Administrative Measures for Overseas Inspections of Drugs and Medical Devices, 26 December 2018

According to the Administrative Measures for Overseas Inspections of Drugs and Medical Devices ("Administrative Measures"), the NMPA will now evaluate the risks of a drug or medical device that has been marketed or proposed to be marketed in China by considering complaints, adverse reactions and other factors. If a drug or medical device is determined to be 'risky', the NMPA may conduct an overseas inspection of the research centres and production sites related to the relevant drug or medical device in question. If necessary, the inspection may be extended to production sites, suppliers or other contractual parties in respect of raw materials, excipients and packaging materials.

During the inspection, the NMPA will focus on whether the actual manufacturing processes and the key factors that would affect the product quality conform to the registered information. If any discrepancy is found, the NMPA will require the relevant drug Market Authorisation Holder ("MAH") or medical device registrant to correct it. If the discrepancy is too severe, or the MAH/medical device registrant fails to correct it, the NMPA will hold that the relevant drug or medical device does not meet the requirements. Possible sanctions include, but are not limited to, warning letters, suspension of the drug import filing with customs, suspension of medical device importing, product recalls and the cancellation of import approval.

To read the full text of the Administrative Measures (in Chinese only), please click here.

SAMR solicits comments on the Measures for the Supervision and Administration of Agents of Imported Medical Devices, 24 December 2018

The first draft of the Measures for the Supervision and Administration of Agents of Imported Medical Devices ("Measures") was published on 2 August 2018. The State Administration for Market Regulation ("SAMR") published the second draft of the Measures on 24 December 2018, which was open for public comment before 23 January 2019. Compared to the first draft, the second draft made few changes. The most important changes are summarised below.

1. Conditions for being an agent of imported medical devices ("Agent") Among others, the Agent should have a business office suitable for its agency work and its staff should be reachable. If the Agent engages in Class III medical devices, it should have a computer information management system that meets the requirements on traceability. After the imported medical devices are withdrawn from China, the Agent should have the ability to submit plans for after-sale quality claims and recovery, repair and maintenance, adverse action monitoring and recalls.
2. Registration obligation after the Agent changes If a former Agent quits, the overseas MAH of the medical device should file a new Agent with the NMPA. Under the first draft of the Measures, the authorisation of the new Agent would have to have started from the date upon which the previous authorisation was terminated. However, this requirement for a seamless authorisation term was deleted in the second draft.
3. Annual report of the Agent Under the first draft of the Measures, both the Agent and the overseas medical device MAH would have been required to submit their annual self-examination reports to the authority. The second draft now provides that the overseas medical device MAH is not required to submit this report.
4. Sanctions Under the first draft, if the Agent was not reachable by the authority through their registered contact information, the provincial-level administration for medical products would have been able to suspend the import and distribution of the relevant medical device. The second draft amends this requirement slightly by only allowing the suspension decision to be made by the NMPA.

Authorities suspend research activities in relation to human embryo gene editing and consider sanctions for violation, 29 November 2018

Two authoritative bodies of the PRC, the National Health Commission and the Ministry of Science and Technology, told the Xinhua News Agency that research activities related to human embryo gene editing have been suspended.

A Chinese scientist, Mr. He Jiankui, claimed to have created the two genetically edited babies who were HIV resistant. The Vice Minister of the Ministry of Science and Technology said, "human embryo gene editing for reproductive purposes is explicitly prohibited under PRC law. After a thorough investigation of this incident, the Ministry of Science and Technology will decide the sanctions together with other relevant authorities in accordance with the law and regulations."

To read the full text of the official newsletter (in Chinese only), please click here.