Significant reform to encourage the innovation of drugs and medical devices

Following the publication of various draft proposals to stimulate innovation of drugs and medical devices by the China Food and Drug Administration (“CFDA”) in May, the State Council finally published the "Opinions on Deepening Regulatory Reforms to Encourage Drug and Medical Device Innovation" (the “Opinions”) on 8 October 2017. The Opinions which take effect upon publication are largely similar to the previous draft proposals.

We summarise below the key regulations:

1. Simplifying the Clinical Trials Regime There will be a new recording regime for clinical trial sites. Clinical trial sites that already have qualified clinical trial conditions do not require approval provided that they are registered with the CFDA’s designated website. Clinical trial sites are required to establish an ethics committee to review and supervise clinical trial projects. Clinical trial proposals should be submitted to the ethics committee prior to the evaluation authority. Clinical data developed overseas may be used for product registration, provided that the data complies with the relevant registration requirements. A first time registrant should provide data and study results demonstrating racial diversity. CFDA also provides new flexibility in relation to drugs and medical devices used to treat life-threatening diseases.
2. Accelerating the Review and Approval Process The review and approval processes for treatments with significant clinical needs will be accelerated. Drugs and medical devices for rare diseases will enjoy a simplified review and approval process, and may receive exemptions from clinical trials and be pre-approved with conditions. The National Health and Family Planning Commission will publish a Catalogue of Rare Diseases and implement a registration system for patients with rare diseases. The Opinions also outline a priority review and approval system for drugs based on patent compulsory licensing.
3. Strengthening the Protection of Intellectual Property Rights Approved innovative drugs and drugs which passed the evaluation of quality and efficacy would be included in the Marketed Drug Catalogue. The catalogue will contain details such as the active ingredients, dosage forms, specifications, Market Approval Holders and exclusive rights. CFDA aims to establish a patent linkage regime for drug registration. When submitting an application for drug registration, the applicant should submit a statement regarding relevant patent rights related to the drug and notify the patent holder within the defined term. The Opinions further offer a pilot program which provides compensatory patent term extension to selected new drugs that suffered lengthy delays during the review and approval process. Applicants for drug market registration may submit a trial data protection application when they apply for registration. During the protection period, the evaluation authority will not approve applications for the same type of drug filed by others.
4. Other measures CFDA aims to fully implement the Market Authorisation Holders system. MAHs are responsible for preclinical research, clinical trials, manufacturing, quality control of raw material, distribution, and reporting of adverse drug reactions. Medical representatives are prohibited from any sales-related responsibilities and should be registered on CFDA’s designed website. CFDA aims to enhance the technical review and protect confidentiality. The State Council also urges all relevant departments to fully understand the importance of the reform and to embrace the reform.

The finalisation of the various draft policies is highly welcomed by the market. The Opinions address many of the key concerns of multinational companies, such as lengthy approval process, intellectual property rights infringements, and the validity of overseas trial data. This policy streamlines the management of clinical trials and is expected to stimulate competition within the industry.