By Scott M. Wheelwright, Cofounder and Principal Consultant, Complya Asia
This article was created from the author's presentation at the 2018 Bioprocessing Asia conference, with GE Healthcare as principal sponsor. The BioProcessing Asia Conference series was created to provide a platform to advance the contribution of bioprocessing sciences towards the development and manufacture of affordable biopharmaceutical products in Asia.
Recent reports about the Chinese pharmaceutical industry estimate its worth at $122.5 billion, making it the world’s second-largest national pharmaceutical market in 2017, with growth anticipated to reach up to $175 billion by 2022.1 Yet, challenges with regulatory policies in China that make entry difficult and costly are causing outside pharma companies to hesitate to expand their global footprint into the country, despite strong government support for innovation. Several scandals have also left a black eye on the country’s promising drug manufacturing industry.
There have been recent regulatory reforms to prevent future incidents as well as reduce regulatory burdens and minimize delays. Understanding what efforts are being made to facilitate market entry is critical for any company considering expansion into this challenging but flourishing area of the pharmaceutical industry.
1. Application Review Changes
From 2007 to 2014, nearly half of drug companies that submitted drug license applications in China waited anywhere from one to five years for approval, with 35 percent waiting six to 10 years and 17 percent over 10 years.2 Beginning in 2015, 600 additional resources were added to the NMPA to reduce the approval timelines as well as assist with a backlog of drug applications. Prior to this, a workforce of 70 reviewers was tasked with an annual load of more than 7,000 drug applications.3
Data on whether the new approval timeline goals were reached is limited; however, it does indicate the reforms, including the hiring of additional resources, has had a positive influence on approval timelines and processes for INDs and new drug applications (NDAs). An article examining three case studies assessing the impact of the regulatory changes found that for NDAs submitted in 2014 through early 2016, it took an average of 21.4 months to obtain approval. 4 However, NDAs submitted after that time (when the changes were implemented) took only an average of 6.8 months.4
A faster review process was also created under the new changes. The agency now must conduct a preliminary review to confirm the content (of both the IND and NDA) is properly formatted within five working days of drug registration application. If the applicant hears nothing, then it is considered accepted. In the case of the IND, the NMPA then has 60 working days to review the application. If no negative or questionable opinions are given, it is considered accepted from the 61st working day and the company may initiate clinical trials.5 For the application for drug marketing license, the NMPA Department of Drug Registration (DDR) has 20 working days to conduct its preliminary review. A second-tier review is a technical evaluation by NMPA CDE, which may take up to 100 working days for new drug and 120 working days for a biosimilar.5
2. Drug Category Changes For Priority Review
The NMPA issued the Work Plan for Reforming Chemical Drugs Registration Classification System in March 2016, which set new registration requirements for drug license applications. Chemical drugs are now classified into five categories:6
The purpose of the new priority review process was to encourage local and international new drug innovation by incentivizing multinational companies to start product development for innovative drugs in China earlier than before. Domestic companies wanting to market a generic drug are now required to demonstrate equivalency in quality and efficacy against the originator drug, even if that drug is marketed in China. Approved priority review requests are allocated resources by the NMPA Center for Drug Evaluation (CDE) and additional channels to facilitate timely feedback from regulators. The goal is to reduce China’s lengthy approval timelines to within six months of the application.
3. Regulatory Changes On INDs Improve China’s Competitiveness
In August 2015, the State Council of the People’s Republic of China made steps toward improving and strengthening regulatory oversight by issuing the Opinions on Deepening the Review and Approval Policies Reform and Encouraging Drug and Medical Device Innovations (later updated in October 2017).7 The document proposed measures to positively impact the regulatory review process for drug and medical devices in China, including the review process for an Investigational New Drug (IND) application.
An IND application is an exemption from the approved marketing application, which is most often required for clinical investigations. Drug manufacturers in the U.S. must wait 30 days after they submit an IND application, so the FDA has time to “review the IND for safety to assure that research subjects will not be subjected to unreasonable risk.”8 Once the 30 days has passed (or after any inquiries from the FDA have been addressed), the company is able to initiate its clinical trials. The process and waiting period are similar in Europe. However, in China, drug manufacturers in the past have had to wait 24 months before they could begin their clinical trials. That requirement put China at a competitive disadvantage, as Chinese clinical testing sites were not included in global trials and application in China came several years after approval in other countries. As part of the regulatory reform movement, an applicant can now start their clinical trial according to the submitted trial design if there is no rejection or other feedback from the reviewer within 60 working days following IND submission.
4. Drug Pricing Negotiations
In February 2017, experts in medicine, pharmacology, health economics, and health policy completed a review of the China National Formulary (CNF) for reimbursable drug use (also known as the National Reimbursement Drug List, or NRDL).9 The CNF, which covers 52 percent of China’s population under the government urban health insurance programs, represents “a list of preferred medicines under certain medical policies within the healthcare system.” A pilot project was then implemented to negotiate drug pricing on 44 innovative but expensive medicines still outside of the formulary. They were selected based on review of market sales data. The government also invited 35 pharma companies to participate in the initial negotiation.
The results of the project were twofold. First, an official definition of an “innovative” medicine in China was created. According to the panel of experts, an innovative medicine is one that has “clearly proven clinical outcomes for urgent unmet medical needs” but is also expensive. Second, agreements were reached for 36 of 44 drugs. Thirty-one of the 36 drugs were Western medicines, of which 22 are imported. These cover important disease areas, such as hematology, cardiology, immunology, neurology, and cancer therapy (including trastuzumab, bevacizumab, nimotuzumab, and rituximab). The result was an average 44 percent decrease in price. Drug pricing negotiations, including expanding the number of drugs included in the review, continue to be an ongoing activity of the Chinese government. 9
5. Accepting Foreign Clinical Trial Data
In October 2017, the NMPA ushered in the next stages of Chinese drug system reform by announcing it plans to allow data from other countries to be used in support of most drug and device market filings in China.10 This is a major breakthrough in China’s regulatory landscape, as the NMPA previously required Phase 3 trials to be conducted in China, regardless of where the product had previously been launched. Drug manufacturers were faced with the risk of having to build a facility for a product before conducting clinical trials within that new facility, which is a cost they could potentially not recover if the drug is not approved. Later, in July 2018, the NMPA issued the Technical Guidelines for The Acceptance of Overseas Clinical Trial Data for Drugs. This document requires applicants to ensure the clinical trial data is authentic, complete, accurate, and traceable. According to the quality of clinical trial data, acceptance is divided into fully accepted, partially accepted, and not accepted.
6. Permission To Use CMOs In China
For the first time, biopharmaceutical development companies have permission to use a contract manufacturing organization (CMO) for production of their commercial drug substance and drug product materials. There were provisions added concerning a Marketing Authorization Holder’s (MAH) rights and obligations, as outlined on Med Device Online11
Although several changes were made, the single-site rule that requires drug substances and drug products be made at the same site is still in effect. That is, for biopharmaceuticals, if a contract facility is used for production, the same site must be used for both drug substance and drug product. Separate sites cannot be used for drug substance and drug product. The MAH rule was set to expire in November 2018, but rather than being made permanent and taking effect nationwide (as was expected), regulators renewed the existing rule for another 12 months. This means only the 10 cities and provinces previously authorized are allowed CMO manufacturing.
With explosive growth in China’s drug market expected over the next several years, these changes will likely have a significant impact on not only the success of the products pursued by drug companies but also on the regulators faced with the daunting task of approving them. In addition, companies expanding their global footprint into China for the first time will set a new precedent for drug development and manufacturing, while existing companies can take advantage of new tools intended to restore the quality of the country’s drug supply and the trust of its patient population.
Scott M. Wheelwright, Ph.D., is cofounder and principal consultant at Complya Asia, a consulting firm located in China that supports companies in Asia with Quality Assurance and cGMP compliance. Dr. Wheelwright served as the founding COO for Innovent, a biopharmaceutical company in China and is founder and president of Strategic Manufacturing Worldwide, Inc., a consulting firm that provides business and technical expertise to biotech and related industries. He has 30 years of hands-on expertise in quality assurance, regulatory, manufacturing and process development and has served as an executive officer in several biotech startups. Dr. Wheelwright has led the development of several products that are now on the market as well as the construction of multiple manufacturing facilities that meet cGMP requirements. His corporate experience includes Abbott, Chiron (now Novartis), and Scios (now J&J). He obtained his PhD degree in chemical engineering from the University of California at Berkeley and performed post-doctoral studies in biophysics at the Max Planck Institute in Germany. He is the author of a book on protein purification and has contributed expertise to other papers on related industry topics.