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The Multinational Pharmaceutical Giants’ Query & Changing Chinese Market Regulations

Posted by Labwu

May 6, 2015 9:00:00 AM

pharmaceuticals, featured on www.blog.marketresearch.comChina possesses a large healthcare market that is indispensable for overseas and multinational pharmaceutical companies. In 2014, the total value of drugs in the Chinese healthcare market reached RMB 1332.6 billion (approx. US$214.9 billion). Imported drugs made by overseas and multinational companies accounted for around one-fourth of the Chinese healthcare market.

It is estimated that by 2015, the total value of drugs in the Chinese healthcare market is likely to be more than RMB 1559 billion (approx. US$251.5 billion). The Chinese healthcare market will surpass Japan to become the second largest drug market following the United States.  

However, in the pharmaceutical field, stringent approval for clinical trials and drug application registrations are quietly executing, which pose big challenges to global pharmaceutical companies. What are the big challenges and how do these affect business in China? How do businesses respond to these challenges? Overseas and multinational pharmaceutical companies need to know the answers to these key questions to operate business smoothly in the Chinese market.

What are the big challenges and how do they affect business in China?

In China, there are two kinds of strategies for the application of imported drug registration. The first one is that overseas and multinational pharmaceutical manufacturers conduct the international multi-center clinical trials in China. Once the trials are complete, and the application of imported drug registration pass through the examination and approval of the Chinese FDA, the drug will be granted marketing authorization in China and is marketed on the Chinese market. This is known as the pathway of Multi-Regional Clinical Trials (MRCT).

The alternative is that the overseas and multinational pharmaceutical manufacturer must submit the application for imported drug registration to the Chinese FDA. Once approval is granted by the Chinese FDA, at this point, the separate clinical trial for the imported drug in China can be conducted. When the separate clinical trial is complete, and the results and registration application are passed through the examination and approval of the Chinese FDA, the imported drug will be granted marketing authorization in China and can be promoted on the Chinese market. This is known as as the pathway for application of imported drug registration, also called as “two applications, two approvals.”

However, Chinese Drug Registration Rules (“DRR”) did not stipulate that the international multi-center clinical trials in China is a compulsory condition for application of imported drug registration and also did not stipulate that the data from Multi-Regional Clinical Trials outside China can be used directly as a basis of application for imported drug marketing registration. The vague governance on approval for clinical trials and application of imported drug registration left a loophole. In the past decade, some multinational pharmaceutical companies used direct data from Multi-center Regional Trials outside China as a basis of application for imported drug marketing registration for review at the discretion of Chinese FDA to speed up entry into the Chinese drug market. They were allowed to sell those drugs in China after two steps. First, they were required to get permission to conduct international clinical trials. Then, they submitted data from Multi-Regional Clinical Trials outside China (rather than a local trial that is conducted exclusively within China) for review and got approval to start selling their products in China in a single final step.

How many Chinese patients have been ensured to enroll in a Multi-Regional Clinical Trial outside China?

Some drugs of Multi-Regional Clinical Trials that do not involve trial sites in China may affect Chinese patients differently, because of the discrepancy of race and ethnicity. Only the international multi-center clinical trials, including adequate numbers of Chinese patients, can support approval of application of imported drug registration. Thus, October of 2013, applications for imported drug registration based on the data from Multi-Regional Clinical Trials outside China submitted by some multinational pharmaceutical companies in China encountered re-review. In March 2014, R&D-Base Pharmaceutical Association Committee (RDPAC), one non-profit organization constituted of 39 multinational pharmaceutical companies in China is subordinate to China Association of Enterprises With Foreign Investment, communicated with Chinese FDA. The multinational pharmaceutical companies that encountered re-review were informed that if the data from Multi-Regional Clinical Trials outside China complied with the requirements of approval for clinical trial, the Chinese FDA would agree to let the multinational pharmaceutical companies use the data from Multi-Regional Clinical Trials outside China to make the application of clinical trials for imported drug registration.

This so called "single final step" was split into two parts, with companies asked to submit data once for what is called a clinical trial approval and again for final permission to sell. Multinational pharmaceutical companies operating in China have already felt the sting of tighter regulation enforcement after aggressive investigations pursued allegations of bribery and corruption that resulted in substantial penalties.

According to author Brian Yang in his article “China FDA Review Of Multi-Regional Clinical Trials May Throw Up Domestic Roadblock," new levels have been initiated in the drug approval process "specifically for international companies, and that means delays of perhaps as long as two years for approvals to come through for drugs to be marketed in China, which will be challenge for international companies."

“It is hard to understand from an international perspective that a practice implemented for 12 years was suddenly changed, without notice or a transition period.” Yang's notion is spreading over the mass media on the Internet, and, thus, the query and controversy is continued.

Indeed, the Chinese FDA has begun to implement the tighter regulation enforcement. For the first time in history, the Chinese FDA officially issued a guidance on international multi-center clinical trials of drugs in China on January 30, 2015, which began implementation on March 1, 2015. Now, the Chinese FDA expects to see overseas and multinational pharmaceutical companies conducting international multi-center clinical trials of drugs in China. The Guidance stipulates that for those international multi-center clinical trial data used for application of drug registration in China, the international multi-center clinical trials of drugs must at least involve two countries, including China, and should refer the requirements of this Guidance.

The Guidance also imposes additional requirements:

  1. The overseas applicant must conduct a holistic evaluation of the global clinical trial data set and a trending analysis of the data from trial subjects in Asia and China. When analyzing the Chinese clinical trial data, specifically, the overseas applicant should evaluate whether the enrolled Chinese trial subjects are representative of the relevant patient population in Chinese medical practice.
  2. The overseas applicant must ascertain whether the Chinese trial subject sample size sufficiently supports the conclusion that the trial drug is safe and effective for Chinese patients, and whether the Chinese trial subject sample size meets the statistical requirements and the relevant laws and regulations’ requirements.
  3. The overseas applicant must adhere to internationally accepted GCP principles and ethical standards. They must also allow the Chinese FDA to inspect the trial sites from time to time, which can be any of the onshore or offshore sites involved in the international multi-center clinical trials.

How do you Respond to Challenges?

Over the past decade, overseas and multinational pharmaceutical companies witnessed that China's strategic position in the chains of global drug markets has become increasingly important. So, the multinational pharmaceutical companies have established many R&D centers in Chinese territory. China’s healthcare market is indispensable for overseas and multinational pharmaceutical companies. In light of the current climate, the judicious attitude responding to challenges is to positively be in compliance with the latest Chinese regulations. 

The overseas and multinational pharmaceutical companies and their senior executive officers engaging in regulatory affairs must have a comprehensive and thorough knowledge of the latest Chinese regulations. Only a macro-strategic vision and forward-looking insights can help overseas and multinational companies seize the initiative and reduce the risks. For example, for drug development at the starting point, applying for international multi-center clinical trials in China, let Chinese clinical trial sites join in the global multi-center clinical trials or multi-regional clinical trials to shorten 3 to 4 years of pathway for application of imported drug registration.

For the drugs of multi-regional clinical trials that have been finished, if taking the imported drug approval pathway is viewed as too cumbersome, the overseas and multinational pharmaceutical manufacturers can consider to seek Chinese partners, because the local pharmaceutical companies within China might find a smoother and possibly faster road to approvals. If overseas and multinational pharmaceutical manufacturers license Chinese companies to participate research and trials, they can escape additional delay. The domestic Chinese companies get a boost, and the drugs come to market more quickly ---- both powerful incentives for international companies to find local partners within China.

In conclusion, how to grasp the opportunity to speed up approval of clinical trials and application of imported drug registration in China depends upon your skills of acquiring an essential knowledge of the latest Chinese regulations and in communication with the Chinese regulatory authorities, as well as the agent service companies, including the contract research organizations (international and domestic CROs). The skill and profound vision remain to be grasped for overseas and multinational pharmaceutical companies.

Interested in more insights on the changing Chinese regulations on the pharmaceutical market? Check out Access China's report Latest Regulations on Pharmaceutical International Multi-Center Clinical Trials in China

Latest Regulations on Pharmaceutical  International Multi-Center Clinical Trials in China

Editor's Note:

This post was written by Labwu, Access China Management Consulting Ltd.

About Access China

Access China offers a variety of different types of research, including: the Chinese industry report and market analysis, the Chinese research report of strategic investment, and the consulting services across a variety of Chinese industry sectors, Chinese laws and administrative regulations, licensing, certification concerning trade and strategic investment into China, with a significant capacity for customized work as well as standardized output. 

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Topics: Pharmaceuticals

    

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