Through Guo Fa [2015] No. 44 (“the Opinions”), the State Council recently launched a new system for reviewing, examining and approving drugs and medical devices in China. This new system aims to (1) improve the efficiency of the review system; (2) urge the State Food and Drug Administration (“SFDA”) to deal with all unprocessed drug application files by the end of 2016 and process new applications efficiently; (3) improve the quality of generic drugs; (4) encourage the development of innovative drugs; and (5) create a more transparent administration and approval process.

Main issues to reform under the Opinions:

  • Increase standards by launching new drug classifications and definitions

The current legal framework classifies drugs as (i) new drugs and (ii) generic drugs.

The Opinions define “new drugs” as “drugs that have not been marketed anywhere in the world” (as opposed to the mainland Chinese market used before) and categorize them into “innovative new drugs” and “improved forms of new drugs.”

They define “generic drugs” as “drugs with the equivalent quality and efficacy as the original drugs” and establish they must conform to the original drugs.

  • Improve drug clinical trial approvals

Companies can now conduct parallel clinical trials in China for new drugs that have not been marketed in other countries. Any qualified clinical data obtained from international multicenter clinical trials involving a Chinese institution can be used for application purposes.

  • Implement a marketing authorization holder pilot program

To date, only drug manufacturers could obtain regulatory approvals. Under the pilot program, R&D institutions and scientific researchers can apply for approvals for new drugs in their own names. Subsequently, when R&D institutions and scientific research personnel transfer their approval to a drug manufacturer, only an on-site inspection of the manufacturer’s manufacturing process and product testing will have to be carried out, rather than repeating the technical review process as required under the current system.

  • Simplify drug examination, approval and deregistration processes
  • Accelerate approval process for innovative drugs

The Opinions allow certain types of drugs to access the SFDA fast-track examination and approval process, including (1) drugs for HIV, malignant tumors, serious contagious diseases and rare diseases; (2) drugs sponsored by national science and technology grants; (3) innovative drugs and pediatric drugs that are manufactured in China; and (4) innovative drugs using modern formulation technology, applying innovative treatment measures, or having significant treatment advantages.

However, applicants must agree that their prices will not be higher than prices in the country of origin or in any markets comparable to the Chinese market.

  • Reform the approval process for medical devices

Applications for innovative medical devices with patented core technologies and significant clinical value will be reviewed on a fast-track basis, and the SFDA will adapt domestic technical standards to international standards.

The SFDA is expected to enact and issue detailed implementation rules in the near future. The Opinions establish specific measures to achieve the reforms, including amending current legislation, adjusting government charges for drugs and medical devices every five years, recruiting more examiners or experts to handle technical reviews and establishing a joint task force in the relevant government agencies to guide the reform.

Date of issue: August 9, 2015. Effective date: August 9, 2015.