On April 26, 2018, the China Drug Administration (CDA) released a draft guideline of implementing rules on pharmaceutical data exclusivity for public comments. The draft guideline expands the scope of data protection from innovative drugs to also now cover innovative therapeutic biologics, orphan drugs, pediatric drugs, as well as drug products that have succeeded in a patent challenge (“first generics”). The data exclusivity period is up to six years for innovative new drugs approved in China and up to twelve years for innovative therapeutic biologics. Comments to the guideline are due May 31, 2018.

Prior to publication of the draft guideline, China had limited data exclusivity to only new chemical entities. In May 2017, the CDA published several draft orders, including Order 55, which proposed additional data exclusivity periods for orphan drugs, pediatric drugs, therapeutic biological products and first generics. Order 55 also proposed that the data exclusivity period be available to new drugs filed in China within one year after approval in the EU, US or Japan. The current draft guideline supplements Order 55 and further provides detailed guidance on implementation of the rules.

In particular, the draft guideline limits the types of exclusivity-eligible data to those pre-clinical and clinical trial data related to drug efficacy, and explicitly excludes data related to drug safety. In addition, the following requirements must be met:

1. the data submitted to the agency as a part of the drug application are for the purpose of obtaining a marketing authorization;

2. the data are not otherwise publicly disclosed prior to the drug application submission;

3. the data are independently developed without reliance on any experimental data by others or published research results.

According the draft guideline, the data exclusivity periods are six years for innovative drugs and twelve years for therapeutic biologics if the drug applicant use data from clinical trials conducted in China, or data from an international multicenter clinical trial in China and a drug application is either submitted in China (first) or submitted in China concurrently with other countries/regions. The exclusivity period may be reduced or revoked under any of the following scenarios:

a.When a drug application uses data from an international multicenter clinical trial in China and the drug application filed in China is later than those outside of China, the exclusivity period is 1 to 5 years depending on the delay. When the delay is more than six years, there is no data exclusivity.

b.If the drug application uses data from clinical trials conducted outside of China with no Chinese patients, the data exclusivity period is 25 percent of the above.

c.If the drug application is supplemented with clinical trial data in China, the data exclusivity period is 50 percent of the above.

d.The data exclusivity is revoked if a company fails to bring a drug to market within one year after obtaining regulatory approval.

For orphan drugs and pediatric drugs, the data exclusivity periods are six years, regardless of the source of the data and the timing of the drug application filing.

As a policy matter, this draft guideline clearly aims to encourage drug companies to conduct clinical trials in China. This draft guideline can be seen as part of series of measures being undertaken by the Chinese government to encourage the introduction of innovative medicines into the Chinese market to enhance competition from generic manufactureres and to lower drug price.