Introduction

On May 11 and 12 2017 the China Food and Drug Administration (CFDA) issued four new draft policies for public comment, proposing further reforms to the existing drug and medical device regulatory regime. The draft policies aim to:

  • expedite the review and approval of new drug and medical device applications (Circular 52);
  • deregulate the conduct of clinical trials to encourage innovation (Circular 53);
  • enhance post-market supervision throughout a product's lifecycle (Circular 54); and
  • protect innovators' rights (Circular 55).

The CFDA is soliciting public comments until June 10 2017. Further legislative initiatives will be proposed if any part of the draft policies contradicts the existing CFDA regulations. If adopted, the draft policies will likely further streamline and accelerate market access to innovative products and have a far-reaching impact on China's life sciences industry.

Circular 52

Circular 52 proposes the following key measures to expedite the review and approval of new products.

Expedited reviews and approvals for urgently needed therapies Drugs and devices that offer new solutions for treating life-threatening diseases or address critical unmet medical needs can be eligible for conditional approval, as long as early and mid-stage study data indicates their efficacy and predicts their clinical value. Companies receiving conditional approvals must develop a risk management plan and initiate confirmatory post-approval studies as per the requirements in the conditional approvals. Innovative drugs and devices sponsored by the National Science and Technology Major Project will be eligible for expedited review and approval.

Supportive regime for rare disease cures Drugs and devices that offer new solutions for treating rare diseases, if already approved outside China, can be eligible for conditional approval. Companies will be able to complete the necessary clinical study stages after receiving marketing authorisation. The health authorities will publish a catalogue of rare diseases and establish a rare disease patient registry.

Cross-disciplinary and professionalised review system The technical review for new drugs and devices will be led by a team of cross-disciplinary reviewers. Each new drug and device application will be assigned to a dedicated managing reviewer, who will be responsible for scheduling consultation meetings. The CFDA will require consultation meetings at all critical clinical study milestones (ie, before the initiation of Phase I, after the completion of Phase II, before the initiation of Phase III, after the completion of Phase III and before the new drug application (NDA) is made). Consultation meetings with expert panels will also be required to asses important but controversial technical questions. The technical review conclusions will be made public, with the exception of company confidential information.

Market access benefits Hospitals will be encouraged to prioritise their procurement and use of new drugs with definite efficacy and reasonable prices. The government will support the inclusion of innovative drugs in the basic medical insurance scheme and the reimbursable drug list will be updated more frequently.

Circular 53

Circular 53 proposes the following new measures to remove certain government controls over clinical studies of new drugs and devices.

Expansion of clinical study infrastructure At present, hospitals must be certified by the CFDA and the National Health and Family Planning Commission in order to become qualified clinical study sites. The draft policy proposes to revoke the certification system. All medical institutions that have the necessary infrastructure to conduct clinical studies can file for record with the CFDA. The CFDA will supervise clinical study sites through rigorous clinical study audits and will not admit data generated in those studies that fail the audits.

Hospitals, medical research institutions and academic institutions will be incentivised to participate actively in clinical studies and research. The capabilities and quality of clinical studies and research will be considered for hospitals' and physicians' performance reviews and ratings.

Foreign companies and research institutions will be allowed to conduct Phase I new drug clinical trials in China.

Improved ethics committee reviews At present, ethics committee (EC) review and approval is subsequent to the clinical trial authorisation process of the Centre for Drug Evaluation (CDE). According to the proposed policy, companies can apply for EC review and approval parallel to clinical trial applications, provided that the clinical study protocols are approved by the EC before the submission of clinical trial applications.

The proposed policy encourages mutual recognition of EC approvals. In the event of multi-centre studies, the lead site's EC approval can be used as the basis for all EC reviews. The ECs of other participating sites can directly endorse the lead site's EC approval, without repetitive reviews.

In addition to hospital-affiliated ECs, the proposed policy intends to encourage the formation of regional ECs, which will be responsible for:

  • the supervision of clinical studies;
  • the qualification of investigators; and
  • the adjudication of appeals filed by sponsors or investigators.

Streamlined clinical trial approval process Similar to the US investigational new drug mechanism, companies must submit a clinical trial application to the CDE, but need wait only 60 working days before initiating the study, unless the CDE rejects the application or issues a deficiency notice during the 60-day period. For certain high-risk medical devices that are subject to the clinical trial approval process, the CFDA must provide its review opinions within 60 working days from receiving the clinical trial application. Applicants will be automatically approved to conduct trials if the Centre for Medical Device Evaluation (CMDE) does not reject the application or issue a deficiency notice during the 60-day period.

Admission of foreign study data Foreign clinical data can be admitted to support the registration of drugs and medical devices in China if:

  • the trials comply with Chinese regulations;
  • the trials pass the CFDA's on-site audits; and
  • the applicant can provide clinical data to prove that no ethnicity difference affects the product's safety and efficacy.

Expanded access to investigational products Expanded access to investigational products may be allowed in Phase II and Phase III trials where the drug or device:

  • is intended to treat life-threatening diseases with no effective treatments; and
  • shows probable benefits in early studies.

Only a limited number of patients (not exceeding the number of study subjects as per the approved protocol) at each site can have such compassionate use following their informed consent. The safety data generated can be used to support marketing authorisations.

Circular 54

Circular 54 reinforces the CFDA's determination to enhance post-approval enforcement.

Roll out of marketing authorisation holder (MAH) system Since 2015, the MAH system has been piloted in 10 provinces. MAHs must undertake all legal responsibilities for:

  • pre-clinical studies;
  • clinical studies;
  • product manufacturing;
  • the quality of active pharmaceutical ingredients and excipients;
  • distribution;
  • clinical use; and
  • adverse event reporting pertaining to approved drugs.

Contractual research, manufacturing and service organisations that are retained by MAHs must undertake both regulatory responsibilities by law and contractual liabilities. The CFDA is determined to roll out the MAH system nationwide.

Improved adverse event reporting system The CFDA will levy the primary adverse event reporting responsibilities and post-market product evaluation duties on MAHs. The CFDA will severely punish concealment, delayed reporting and misrepresentation.

Introduction of regular and rigorous audits and inspections The CFDA will:

  • further strengthen its data integrity assessment of regulatory dossiers;
  • continue its on-site audits on clinical trials; and
  • take legal action against data forgery (including criminal investigations by the police and prosecutors).

Further, the CFDA and local food and drug administrations will strengthen risk-based, on-site inspections and for-cause inspections for good practice compliance through the product's lifecycle and build a professional team of inspectors through recruiting and training initiatives.

Regulation of promotional activities The CFDA will establish a medical representative registration system, where all drug licence holders will need to register their medical representatives. Medical representatives will be allowed to conduct only academic promotion and technical consultation when interacting with physicians and will be prohibited from engaging in drug sales.

Enhancement of infrastructure for technical reviews The CFDA will procure services from qualified third parties to meet the capacity requirement for drug and device reviews. In addition, the CFDA plans to establish an Electronic Common Technical Document system to standardise the format of electronic submissions of drug and device applications. It aims to create a database of master files for each approved drug and device. Finally, the CFDA will increase its efforts towards achieving the international harmonisation of technical standards and hopes to achieve mutual recognition of review and approval decisions.

Circular 55

Circular 55 proposes to establish a patent linkage system and improve regulatory data protection. It also reiterates the confidentiality obligations of all government employees involved in the review and approval process.

Establishment of patent linkage system Within 20 days after the submission of an NDA application, applicants must submit a statement of patents pertinent to their drugs and either:

  • an affidavit of non-infringement; or
  • a notice to relevant patent holders if the drugs may infringe a patent.

Patent holders can file infringement litigation within 20 days after receiving the notice or upon their knowledge of the CFDA's acceptance of the NDA application and must inform the CDE accordingly. The CFDA can stay an NDA application for up to 24 months from the date of receiving proof of court acceptance of the case, but the CDE can continue its technical review during this period. If the parties settle or a final court decision is issued during the 24-month period, the CFDA can reject or approve the NDA applications based on the settlement agreement or the court decision. If the court fails to issue a judgment after the 24-month period expires, the CFDA can approve the NDA application.

Improvement of regulatory data protection NDA applicants can apply for regulatory data protection along with their submissions. Depending on the degree of novelty and the therapeutic areas, the length of protection will range from one-and-a-half to 10 years, starting from the date of NDA issuance. The CDE will not approve NDAs for the same drugs during the protection period, unless the applicant can prove that it generates its data independently.

Establishment of 'China Orange Book' The CFDA will publish a so-called 'China Orange Book' listing all approved drugs in China. The listing will contain the registration category of the approved drugs and their active ingredients, dosage forms, specifications, MAHs and other regulatory exclusivity entitlements (ie, patents, new drug monitoring periods and regulatory data protection periods).

Comment

These draft CFDA policies introduce fundamental changes to the regulatory paradigm and will considerably reshape the strategies of life sciences companies with regard to China. Companies should review the new policies carefully, propose comments and monitor the legislative progress.

For further information on this topic please contact Katherine Wang at Ropes & Gray LLP by telephone (+86 21 6157 5200) or email (katherine.wang@ropesgray.com). The Ropes & Gray LLP website can be accessed at www.ropesgray.com.

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