Authorization Holder Scheme To Shake Up China R&D, Drug Production
This article was originally published in SRA
When a roomful of attendees at the annual ChinaTrials meeting, held Nov. 4 in Beijing, voted that a planned marketing authorization holder (MAH) system would be the single development likely to have the most impact on the pharma industry, few predicted that the scheme would come true just hours later.
The MAH plan was chosen by 38% of the attendees at the meeting as the top issue, overtaking even regulatory reforms and accelerated new drug approvals.
Later that day, China's National Congress voted to allow the State Council to start MAH pilots in 10 provinces - Beijing, Shanghai, Jiangsu, Zhejiang, Guangdong, Shandong, Tianjin, Hebei, Sichuan and Fujian.
The decision marks an important new step in China's push to stimulate new drug innovation and commercialization, given that it will open the way for non-manufacturers to apply for product approvals.
Currently, the country's Drug Administration Law allows only drug manufacturers to apply for and obtain drug registrations. The new rule will allow other applicants, such as researchers and academic institutions, to apply for and obtain drug approvals, becoming market authorization holders.
The holders can then choose to set up their own manufacturing sites for the product, or to contract out manufacturing to other entities. The MAH holders will also be able to commercialize products using their own brand and bear corresponding responsibilities for this.
The separation of drug manufacturing from registration will have three main benefits, pointed out Xu Jinghe, the China Food and Drug Administration's legal office director, in a Nov. 4 press briefing.
Expected Benefits
The MAH mechanism will firstly incentivize new drug research and development, help to effectively allocate resources and improve efficiency, and finally serve to emphasize the holder's responsibility in ensuring drug quality, Xu said.
Jiangsu, Zhejiang, Shandong and Sichuan provinces were selected for the pilot scheme due to having the highest numbers of new drug applications in China, Xu explained. Shanghai, Fujian and Guangdong were chosen for being free trade zone pilot provinces, while Beijing, Tianjin and Hebei form the integrated capital regional coordination zone.
The MAH system is expected to bring some much-needed cheer to an industry sector that has been plagued by a slowing economy, mounting price pressures, the lingering compliance crackdown and poor quality issues.
Foreign companies eyeing entry to the China market but wary of the need for large capital investment in a manufacturing site can also now breathe a little easier.
But perhaps most notably, allowing researchers to obtain approvals for new drugs is likely to spur a new wave of innovation in the pharma sector.
The pilots will run for three years and the CFDA will issue detailed implementation plans, said the agency, which submitted the plan to get approval for the MAH scheme in August.
Where Responsibility Lies
But there are a number of remaining issues, one of which is who should take responsibility when the holder and manufacturer are different entities and things go wrong?
Given that drug quality and safety issues have long been prominent in China, leading to frequent exposures of substandard manufacturing and the use of low-grade or toxic ingredients, many are concerned about the formal designation of responsibility under the MAH plan.
But according to China's new rule, authorization holders will be held responsible for post-marketing surveillance, adverse event monitoring and product re-evaluation, as well as any required product recalls.
And if an actual manufacturer is found to be responsible for the adverse effects of a product, holders will be able to require compensation from the maker, noted the CFDA.
Indeed, the majority of participants in the ChinaTrials meeting believed that both holders and manufacturers should be responsible if found to be at fault.
CMC Market To Grow
The MAH rollout will spur growth in the contract manufacturing market, especially for quality firms with a good reputation, insiders say.
China already has the talent, infrastructure and cost advantage in production and many multinationals already choose the country as a site for drug manufacturing. The sector has already been growing at more than 10% and is expected to grow by around 17% from 2012-17 to reach $5bn.
Some companies including Boehringer Ingelheim GMBH and Lonza Group Ltd are already positioning themselves as contract manufacturing organizations.
Meanwhile, contract research organization WuXi AppTec Inc is also looking to expand its commercial scale manufacturing facility that will quintuple its capacity and be a key growth driver for the firm.
This article has also been published in PharmaAsia News. Scrip Regulatory Affairs brings selected complementary coverage from our sister publications to our subscribers.