By Huang Jianwen King & Wood Mallesons’ Commercial & Regulatory group

On October 10 2017, the China Food and Drug Administration (“CFDA”) issued the Decisions Concerning the Adjustment of Imported Drug Registration (No. 35 Order by CFDA, “Decisions”). This implements the policy of encouraging new drug marketing following the earlier issuances of Opinions on Deepening the Reform of Evaluation and Approval System and Encouraging the Innovation of Drugs and Medical Devices by the General Office of the CPC Central Committee and the General Office of the State Council on October 8. 

The three major issues affected by the Decisions are the following:

Synchronized declarations of research & development for multi-regional clinical trials are permitted

China has issued the test guide for multi-regional clinical trials (“MRCT”) in 2015. However, according to the Measures for the Administration of Drug Registration (“Measures”), drugs in MRCT must have already been registered overseas or have entered phase II or phase III clinical trials. This lags the process of declaration of research & development (“R&D”) of drugs in China, affecting the public access to new drugs. The Decisions stipulate that drugs in MRCT in China are now permitted to launch synchronized phase I clinical trials inside and outside China except for biological products for preventing diseases. This will greatly speed up the process of MRCT and the marketing of imported new drugs in China, which should be beneficial to patients in China, as they would have access to the latest therapeutic drugs as early as possible.  With regard to pharmaceutical companies (especially multinational companies), this would greatly reduce their R&D costs by avoiding repeated clinical trials.

Drugs in MRCT may apply for import marketing registration directly

According to the Measures, the importation of drugs in MRCT shall be conducted in accordance with the import drug registration procedures.  However, with the implementation of the Decisions, drugs in MRCT may apply for import marketing registration directly following the completion of clinical trials, on the premise that all the requirements set by the Measures and other related regulations are met.  The optimization of registration application process changes the relatively independent positions of MRCT declaration and approval in the past, and it would speed up the process of new drug marketing in China.

Removal of certain import drugs’ overseas marketing requirements

According to the Decisions, for new chemical drugs and therapeutic biological innovative drugs which apply for import clinical trial and import marketing in China, the requirement of marketing authorization in the country or region of the foreign pharmaceutical manufacturers will be removed.

Although the Decisions mainly adjust the registration of imported drugs, it will undoubtedly have a significant impact on interested parties in the healthcare industry. The acceptance of overseas clinical trial data and optimization of import marketing procedure will attract more multinational pharmaceutical companies and foreign-invested pharmaceutical companies to enter into the Chinese market, which will put more competitive pressure on domestic pharmaceutical companies.  With the increase in the number of domestic clinical trials and the opening up of synchronized application, domestic hospitals and clinical trial researchers will enjoy more opportunities to engage in the design and discussion of clinical trial protocols from early stage, while facing higher standards of their research capabilities.  In addition, the demand for CROs will increase along with the implementation of new rules, which is a huge opportunity and challenge for the development of CRO industry.

To be more specific, for foreign-invested pharmaceutical companies, main influences made by the Decisions are:

  • Promoting the voice of domestic medical clinical teams in foreign-invested pharmaceutical companies. In the past, due to the slow registration process for imported drugs, domestic medical clinical teams in foreign-invested pharmaceutical companies were in a subordinate position and did not have much voice. However, after the issuance of the Decisions, synchronized declarations of research & development for multi-regional clinical trials are permitted, and drugs in MRCT may apply for import marketing registration directly. Therefore, it is necessary for domestic medical clinical teams in foreign-invested pharmaceutical companies to provide the demand from the market in China when design the protocols of MRCT, and it will promote the voice of domestic medical clinical teams in foreign-invested pharmaceutical companies.
  • Foreign-invested pharmaceutical companies will consider more on the Chinese market in their research & development strategies. The issuance of the Decisions is in favor of transnational pharmaceutical companies in terms of their overall arrangements in both the global market and the Chinese market. In the past, due to the slow registration process for imported drugs and factors such as time cost and profits, the Chinese market was less considered in the research & development of some drugs. However, after the reform of imported drugs registration, foreign-invested pharmaceutical companies will have more incentives to study on the Chinese market, and to put more resources studying Chinese patients, which is good for the research & development of drugs targeting Chinese patients.

In the meantime, the Decisions will influence domestic pharmaceutical companies in the following aspects:

  • Domestic pharmaceutical companies will face stronger competitions and challenges. The issuance of the Decisions sets an equal stage for both domestic and foreign-invested pharmaceutical companies. Domestic pharmaceutical companies will face the challenge from the most advanced technology in the world.
  • Promoting the raising of innovation level in domestic pharmaceutical companies and the development of innovative drugs. After the issuance of the Decisions, facing the competition with transnational pharmaceutical companies, domestic pharmaceutical companies certainly need to increase investment in research & development, and constantly develop innovative drugs with proprietary intellectual property rights.