China Life Sciences & Healthcare Monthly Update – Summer 2018

The State Council announces further favourable policies for the drug industry, 20 June

In an executive meeting on 20 June 2018, the State Council of the People’s Republic of China (“State Council”) announced several favourable policies for the drug industry, including accelerating the registration process for new drugs which have been marketed overseas, measures regarding listing and pricing of anti-cancer drugs and ensuring the supply of drugs.

The key points of the policies are summarised below:

1. Accelerating the registration process of new overseas marketed drugs
   • The marketing registration requirements for orphan drugs and certain drugs for preventing and treating severe life-threatening diseases will be simplified. All research materials obtained abroad can be submitted for market authorisation. The authority should make their decision within 3 months for orphan drug applications and within 6 months for applications for drugs for preventing and treating severe life-threatening diseases.
   • For the import action of chemical drugs, pre-registration verification will change to the supervision of post-marketing sampling. This sampling will also not be a condition for the inspection of imports.
2. Taking measures to reduce anti-cancer drug prices
   • Local governments should apply a specific bidding and procurement regime for anti-cancer drugs that are listed in the National Drug Catalogue for Basic Medical Insurance, Work-Related Injury Insurance and Maternity Insurance (2017 Edition) (“Catalogue”).
   • For anti-cancer drugs not listed in the Catalogue, there will be an acceleration of the negotiation process to add these drugs into the Catalogue.
   • There will be a pilot of a national drug collective procurement regime, which aims to significantly reduce drug prices.
3. Strengthening the monitoring and early warning systems of drugs in short supply

• A recording system will be established to list manufacturers who have ceased making drugs in short supply and the corresponding Active Pharmaceutical Ingredients of these drugs. The aim is to increase the storage of these drugs to ensure their accessibility for all patients.

Although the practical details of the policies are yet to be seen, these favourable policies indicate a lot of commercial opportunities and benefits for both domestic and overseas pharmaceutical enterprises.

To read the full text of State Council’s announcement, please click here (in Chinese only).

The National Health Commission issued new requirements on medical institutions and healthcare professionals, 15 June

The National Health Commission (“NHC”) of the People’s Republic of China issued the Circular on Further Reforming and Improving the Examination and Approval of Medical Institutions and Physicians (“Circular”) on 15 June 2018. The Circular released further restrictions in the healthcare sector. In particular, the Circular simplifies several of the registration processes for medical institutions and healthcare professionals.

The key points of the Circular are summarized below:

• Electronic registration for medical institutions and healthcare professionals, including physicians and nurses will be fully implemented by June 2018.
• Permitting the commissioning of third parties to provide certain medical services. Medical institutions may commission independent third parties (e.g. medical laboratories, pathology diagnosis centres, medical imaging diagnostic centres, medical disinfection supply centres or other qualified medical institutions) to provide corresponding medical services, including medical tests, pathology examinations, medical imaging and the supply of medical disinfection equipment, provided that the medical institution can ensure the safety and quality of the medical services.
• Regulating the naming of profitable medical institutions. Profitable medical institutions should comply with all the applicable naming rules related to companies, individual businesses and medical institutions.
• Simplifying the registration application materials for medical institutions. Application documents that are required without legal grounds or those that can be obtained from other official sources will not be required. In addition, a capital verification certificate for the registration of a medical institution will no longer be required. However, the applicant shall be responsible for the truth of the registered capital.
• Certain medical institutions’ certificates for establishment approval and practising approval will be merged into one certificate. For the registration of medical institutions, the healthcare authorities will not issue a Medical Institution Establishment Approval, but will only issue a Medical Institution Practising Licence. However, this rule does not apply to tertiary hospitals, tertiary maternity and child health hospitals, emergency centres, first aid stations, clinical trial centres, Sino-foreign joint venture medical institutions or medical institutions solely invested in by a person or entity from Taiwan/Hong Kong/Macau.

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

Priority approvals for orphan drugs and urgently-needed drugs, 23 May

The China National Drug Administration (“CNDA”) and four other authorities published the first list of rare diseases (Guo Wei Yi Fa [2018] No.10) on 11 May 2018. The Local Food and Drug Administration (“FDA”) will refer to this list to determine if a drug qualifies as an orphan drug.

In addition, the CNDA and the National Health Commission issued the Announcement on Optimizing the Evaluation and Approval of Drug Registration (“Announcement”) on 23 May 2018. According to the Announcement, the CNDA will give priority approval to orphan drugs and drugs for severe life-threatening diseases without effective treatment measures. If these drugs have been marketed outside China and no racial differences have been proved, the clinical trial data obtained overseas may be used directly for marketing registration.

In addition, the Prioritised Evaluation and Approval also applies to certain drugs of significant clinical value or of great clinical advantage in the treatment of certain diseases.

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

The China National Drug Administration seeks comments for drug test data protection regime, 26 April

In recent months, several important policies been issued to encourage drug innovation. In particular a data protection regime is to be established in China. On the evening of 26 April 2018, the newly re-organized China National Drug Administration issued for public comment the draft Implementation Measures for Protecting Drug Test Data (“Measures”).

According to the Measures, the data protection regime will be applicable for 1) innovative drugs 2) innovative treatment bio-products 3) drugs for rare diseases 4) specific drugs for children 5) drugs that succeed in challenging a patent.

A 6 year protection term will be given to innovative drugs, drugs for rare diseases, and drugs for children. A 12 year protection term will be given to innovative treatment bio-products.

The 6 or 12 years’ protection term will apply to imported drugs that have clinical trials or international multi-centre clinical trials conducted in China and who apply for registration in China first or at the same time as they apply for registration in other countries. However, if the drug registration is applied in China later than in other countries, the protection term will be decreased depending on the seriousness of the delay. If the overseas clinical trial data used for drug registration is lacking in Chinese patient data, only 25% of the above mentioned protection term will be given to the drug. If Chinese patient data has been added, the drug can receive 50% of the above mentioned term.

During the protection term, the drug authority will not approve registration applications for the same kind of drugs filed by other parties, unless the data protection rights holder or market authorisation holder agrees, or unless the other parties achieved their data independently.

The Measures also provide the procedures for applying for the data protection term and filing for an objection or cancellation of an authorised application for a data protection term.

Please click here to read the full text of the Decision (in Chinese only).

The State Council announces preferential policies for imported drugs, 12 April

In an executive meeting of the State Council on 12 April 2018, the Premier, Li Keqiang, announced several preferential policies for imported drugs:

• Reducing the import tariffs of anti-cancer drugs and alkaloids to zero. A catalogue of 28 drugs that will benefit was published on 23 April. This will take effect from 1 May 2018.
• Decreasing the prices of imported innovative drugs and urgently-needed anti-cancer drugs, by using methods such as government procurement and cross-border e-commerce.
• Simplifying the registration process for imported innovative drugs by changing the approval regime for clinical trials into an implied permission regime.
• Giving up to a 6 year data protection period to innovative chemical drugs (during which the authority will not approve the marketing of drugs in the same category); and giving up to a 5 year patent term extension to innovative drugs that apply for marketing in China and overseas simultaneously.
• Strengthening the supervision of overseas manufacturing factories, and cracking down on the manufacturing and distribution of counterfeit drugs.

Most of these policies are not yet reflected in effective laws or regulations. We expect more practical measures in the near future.

Please click here to read the State Council’s briefing (in Chinese only).