New Trends: Reform to Drugs and Medical Devices in China

China
On 8 October 2017, the General Office of the State Council issued the Opinions on Deepening the Reform of the Evaluation and Approval System and Encouraging the Innovation of Drugs and Medical Devices(“Opinions”). The Opinions stipulate 36 measures covering six topics, among which the most noteworthy 4 topics are “reform of the administration of clinical trials”, “acceleration of the evaluation and approval process”, “implementation of Market Authorization Holder (“MAH”) regime and enhancement of full lifecycle administration” and “promotion of drugs innovation and the development of generic drugs”.

The key measures stipulated by the Opinions include the following:

Topic 1: Reform of the administration of clinical trials

1. Broadening the range of clinical trial institutions and implementing the recordal procedure for clinical trial institutions

First, according to the Opinions,other institutions than medical institutions such as medical research institutions and higher medical education institutions are allowed to carry out clinical trials. Second, a recordal procedure will replace the current approval procedure for clinical trial institutions. 

At present, the draft Management Measures on the Requirements on the Institutions for Clinical Trials for Medical Devices and its Recordal Formalities have already been released for comment on 4 August 2017. These detailed measures applicable to the recordal of clinical trial institutions for both drugs and medical devices are expected to come out in the near future.
   
2. Optimizing the evaluation and approval procedures for clinical trial applications

The Opinions provide that during the evaluation and approval procedures for application of clinical trials, if the competent food and drug administration (“FDA”) does not give any negative opinions or raise any questions or challenges within a prescribed time period, it shall be deemed as having approved such application. During the process of the clinical trials, the registration applicant shall timely report if there is any change in the clinical trial plans, significant pharmaceutical change or non-clinical-research safety issues. The applicant shall also timely revise the clinical trial plans, suspend or terminate the clinical trial in case of any safety risks identified.

This reflects the overall reform principle of the Chinese authorities “easier entry, stricter in-between supervision” in the recent years. Applicants should invest more efforts to monitor the whole process of the clinical trial in order to cope with the possibly enhanced inspections by the competent FDAs.
   
3. Accepting clinical trial data obtained from abroad

The Opinions expressly allow the use of clinical trial data which are obtained from multi-centers abroad and which comply with the relevant drugs and medical devices registration requirements in China. However, for drugs and medical devices to be launched in China for the first time, applicants shall provide the clinical trial data specifically on whether there are any ethnical differences.
   
4. Allowing the conditional use of the drugs and medical devices for clinical trial

The Opinions expressly allow the drugs and medical devices for clinical trial to be used on patients based on the following conditions:
   
  (1) the drugs and medical devices under clinical trial are aimed at treating significantly life-endangering diseases that lack effective treatment methods at the time of the clinical trial;
  (2) the possibility of benefits has been shown after initial observation;
  (3) the ethical requirements have been fulfilled;
  (4) the relevant drug or medical device can only be used on patients in the clinical trial institutions where the clinical trial is carried out; and
  (5) a prior informed consent of the patient has been obtained. In the meantime, the safety data collected from such clinical trial usage is also allowed to be used in the drugs and medical devices registration.

Topic 2: Acceleration of the evaluation and approval process

1. Accelerating the evaluation and approval process to fulfill clinically emergent needs


The Opinions expressly allow the conditional launching on the market of those drugs and medical devices to be used to fulfill emergent needs to ensure the public health as well as those drugs and medical devices that are aimed at treating significantly life-endangering diseases that lack effective treatment methods at the time of clinical trial if the relevant clinical trial indicators in both the early and intermediate stages show effective treatment results and clinical value can be expected.
   
2. Supporting the R&D of drugs and medical devices used for the treatment of rare diseases

The Opinions specifically allow the conditional launching on the market of drugs and medical devices that are used for the treatment of rare diseases and that have already been approved abroad. In addition, applicants for the registration of these drugs and medical devices can also apply for lowered requirements on clinical trials or even be exempted from clinical trials requirements.

In order to implement such measure, a rare disease catalogue and a rare disease patient registration system will be established by the National Health and Family Planning Commission or its entrusted industry (academic) association.
   
3. Implementing stricter evaluation and approval process for injection drugs

According to the Opinions, the evaluation and approval process for injection drugs will become stricter in the following ways:
   
  (1) the change from oral drugs to injection drugs will be strictly controlled, i.e. no approval shall be granted if oral drugs are able to meet clinical needs;
  (2) the change from muscle injection drugs to vein injection drugs will be strictly controlled, i.e. no approval shall be granted if muscle injection drugs are able to meet clinical needs; and
  (3) no approval shall be granted for the inter-change between big dose injection drugs, small dose injection drugs and aseptic powder needle for injection, unless such inter-change shows obvious clinical advantage.
   
Along with the new requirement on the re-evaluation of injection drug as put forward by the Opinions, we understand that injection drugs will face stricter supervision in the future.
   
4. Streamlining the evaluation and approval procedures for drugs, pharmaceutical ingredients, pharmaceutical excipients and packaging materials by implementing an overall evaluation and approval system

Early in 2015, the overall evaluation and approval system was already introduced by the Opinions on the Reform of the Evaluation and Approval Process for Drugs and Medical Devices issued by the State Council and effective from 9 August 2015 (“Guo Fa (2015) No. 44”) in order to simplify the then existing evaluation and approval processes for pharmaceutical excipients and packaging materials.

This time, the Opinions expand the scope of applicability of such overall evaluation and approval system to pharmaceutical ingredients. In other words, the evaluation and approval for a certain drug’s pharmaceutical ingredients, pharmaceutical excipients and packaging materials shall all be carried out together with the evaluation and approval of the relevant drug and no separate approvals will be granted.
   
5. Giving priority to drugs under patent compulsory license during the evaluation and approval process

The Opinions provide that priority shall be given to drugs that are under patent compulsory license during the evaluation and approval process if the public health is being greatly threatened. The Opinions further authorize the National Health and Family Planning Commission together with other relevant departments to release detailed regulations on the circumstances where the public health is greatly threatened as well as on how to initiate patent compulsory license procedures under these circumstances.

Topic 3: Promotion of drugs innovation and the development of generic drugs

1. Establishing a catalogue for drugs that are already launched on the market

According to the Opinions, a catalogue for drugs that have already been launched on the market (“Drug Catalogue”) shall be established by the CFDA. Both new drugs and generic drugs shall be included into such Drug Catalogue, where the nature of such drug (i.e. innovative new drug, modified new drug or generic drug whose quality and effect are consistent with those of originator drug), its active ingredients, specification, dosage form, MAH, the patent obtained as well as the term of clinical trial data protection, etc. shall be specified in such Drug Catalogue. The Drug Catalogue may serve as an official control group in order to help the competent FDAs to facilitate the administration of registration applications of generic drugs.
   
2. Patent term prolongation

According to the Opinions, pilot patent term prolongation shall be carried out on certain new drugs. Such prolongation is aimed at making up the time spent on the clinical trial and the evaluation and approval process of such drug during the patent term. At present, no detailed rules and regulations have been in place yet. It is expected that the Patent Law of the People’s Republic of China will be revised in order to provide sufficient legal basis to put such measure into practice.
   
3. Exploring the establishment of drug patent linkage system

In order to protect the patent owner’s legitimate rights and interests and to lower the risk of patent infringement while at the same time to encourage the development of generic drugs, the establishment of a drug patent linkage system is under exploration.

Under such linkage system, applicants shall specify, during the registration application, the intellectual property (“IP”) right involved and the IP ownership status and shall inform the relevant patent owner of the registration application within a prescribed time period. Technical evaluation shall not be suspended if there is a patent dispute. The competent FDAs shall decide whether to approve the drugs based on a valid court judgment, ruling, or mediation document; they may also choose to approve the drugs in case no valid court judgment, ruling, or mediation document is rendered or obtained within a prescribed time period.

The Opinions also provide that a list of drugs whose patents are terminated or invalidated or whose patent terms have expired and for which no generic drugs have been applied yet shall be issued on a regular basis in order to properly guide the R&D of generic drugs to benefit the public.
   
4. Improving and implementing data protection policy for clinical trial data

According to the Opinions, applicants may apply for the protection of clinical trial data simultaneously when they apply for the registration of drugs. The clinical trial data and other data for innovative new drugs, rare disease drugs, specialized drugs for children, drugs that successfully challenge the existing patent as well as biological products for purpose of innovative treatment will be given a certain period of data protection, if such data are obtained by the applicants independently and have not been disclosed to any third parties. 

According to the Implementation Rules of the Drug Administration Law of the People’s Republic of China, the data protection policy already applies to drugs with innovative chemical ingredientsandwith a protection term of six years. This time the Opinions expand the scope of data protection to certain other drugs but do not make clear the term of protection. We expect that more detailed implementation rules will be promulgated in the near future.
   
5. Encouraging clinical use of new drugs

The Opinions provide that new drugs shall be timely included into the payment under basic medical insurance and also into the scope of centralized procurement plan of public hospitals. 

This measure is aimed at ensuring the commercialization of the new drugs so that the R&D of the new drugs will be further promoted.

Topic 4: Implementation of Market Authorization Holder (“MAH”) regime and enhancement of full lifecycle administration

1. Striving to achieve nationwide implementation of the MAH regime


According to the Opinions, the MAH regime shall become applicable to both drugs and medical devices. According to the Notice of the General Office of the State Council on Issuing the Plan for the Pilot Program of the Regime of the Market Authorization Holder of Drugs issued by the General Office of the State Council and effective from 26 May 2016, the MAH regime is only applicable for certain drugs and in certain regions in China (“Pilot Regime of MAH”). After the issuance of the Opinions, the MAH regime shall also apply to medical devices, i.e. relevant research institutions and researchers will also be allowed to become the MAH of the relevant medical devices.

In addition, the Opinions also make clear that the experience gained from the Pilot Regime of MAH for drugs should be summarized timely so that the Drug Administration Law can be revised in order for the MAH regime to become applicable nationwide for drugs.
   
2. Re-evaluation of injection drugs

According to the Opinions, re-evaluation shall be carried out for injection drugs that have already been launched on the market. It will take around 5 to 10 years to finish all re-evaluation work. For MAH, it shall re-evaluate the safety, effectiveness and quality controllability of injection drugs. After passing the re-evaluation, the MAH may enjoy the same preferential policies as those applicable to generic drugs.
   
3. Regulating drug representatives by establishing a double recordal and registration system

According to the Opinions, a double recordal and registration system shall be established:First, drug MAH shall record its list of drug representatives on a website designated by the competent FDAs; and

Second, the activities of the drug representatives shall also be recorded at the designated department of the medical institution.

Such double recordal and registration system is aimed at preventing drug representatives from conducting illegal activities (such as sales of drugs, misleading doctors to use certain drugs and hiding adverse reaction of a certain drug).

On 22 August 2017, Shanghai FDA published a draft for comment for the registration of drug representatives, which becomes officially the first draft for comment in this regard nationwide. We expect that more regional implementation rules for such registration and recordal system will come out in the near future.

In conclusion, although the Opinions merely provide an official guideline for future developments in drugs and medical devices in China, such Opinions show that the Chinese government has determined to speed up the process of the reform. We expect that more concrete implementation rules will come out in the near future to put the measures into practice.