2016 Review: Rapid Change Defines China Regulatory Environment

If you missed some of the many significant events in China’s policy and regulatory landscape in 2016, here is your opportunity to catch up on month-by-month developments.

2016 was a very busy year for regulatory activity in China and it was sometimes hard to keep up with all the changes. As an easy reference to some of the major developments and their significance, here is a monthly breakdown of the main changes at the China FDA and other regulatory bodies in this fast-growing market.

January

The CFDA approved 13 new drugs including Johnson & Johnson's Complera/Eviplera (emtricitabine/rilpivirine/tenofovir) and GlaxoSmithKline PLC’s Tivicay (dolutegravir) for HIV, along with Sinovac Biotech Ltd.'s EV71 vaccine. (Also see "Janssen, GSK China HIV Approvals Show Increased Transparency" - Pink Sheet, 22 Jan, 2016.).

Jiangsu People's Hospital in Nanjing, Jiangsu province stirred up unusual ire among pharma companies by requesting a deposit equal to 8% of each drug's annual sales at the hospital. Multinationals voiced strong opposition as they saw it as the latest obstacle to entering the large hospitals market. (Also see "Multinationals Dispute Deposits Demanded By Jiangsu Hospital" - Scrip, 17 Jan, 2016.)

The CFDA expanded overseas pharma manufacturing inspections, planning to conduct 49 such inspections of sites around the world and doubling the overseas procedures figure in just two years. Staying on the right side of regulators means staying on top of local updates, insiders said. (Also see "Understanding Regs Key As CFDA Toughens GMP Enforcement" - Scrip, 28 Jan, 2016.)

February

The CFDA released its annual New Drug Approval report showing a surprisingly lower figure for NDAs during 2015. The agency said it approved a total 241 drugs, the majority of which were generics with abbreviated new drug approvals. In comparison, it granted greenlights to 470 drugs in 2014 and 374 in 2013.

The main reason for the decline, industry sources said, was due to the fact that many NDAs had been withdrawn following the CFDA's clinical data crackdown. (Also see "Withdrawals Slash CFDA’s 2015 Approval Numbers" - Scrip, 28 Feb, 2016.)

On Valentine’s Day, reports of Chinese tourists flocking to Japanese drug stores and clearing out everything from cold remedies to plasters caught the attention of Premier Li Keqiang, who said in a cabinet meeting that stimulating the pharma industry was vitally important to meet health care needs and unleash its growth potential. (Also see "Explosive Buying, Drug Quality And Premier Li" - Scrip, 15 Feb, 2016.)

March

In a blow to multinationals and domestic drug makers alike, the CFDA released Document 51 on Reform Plans for Chemical Drug Registration, stirring up immediate reactions from the industry.

The agency divided drug products into "new drugs" or "generics." For new drugs, only two kinds of products would qualify - new chemical entities or these with improved or new delivery systems, formulations and new indications that had not been marketed inside China and abroad, (Also see "New Strategies Needed As China Shakes Up Drug Class Rules?" - Pink Sheet, 16 Mar, 2016.)

Another blow came when the nation’s health minister, National Health and Family Planning Commissioner Li Bin, announced that China’s first-ever national pilot scheme to negotiate price cuts was ongoing. (Also see "China Aiming To Slash Certain Cancer Drug Prices To Ease Access" - Scrip, 11 Mar, 2016.)

Five drugs were selected for the experiment: Iressa (gefitinib) from AstraZeneca PLC; Tarceva (erlotinib) from Roche; Conmana (icotinib) from Betta Pharmaceuticals Co. Ltd.; Revlimed (lenalidomide) for multiple myeloma from Celgene Corp., and the oral antiviral Viread (tenofovir disoproxil fumarate) for chronic hepatitis B from GlaxoSmithKline PLC.

April

The CFDA released a list of drugs that had been granted accelerated fast-track review status. Out of the nine for hepatitis C, Bristol-Myers Squibb Co. won big with four products, while Gilead Sciences Inc. and AbbVie Inc. each had two on the list. (Also see "China Fast-Tracks Multiple HCV Drugs With Access In Mind" - Scrip, 28 Apr, 2016.)

Meanwhile, a vaccine quality scandal rocked China, causing a lasting interruption to vaccines distribution in a vast market serving millions of newborns each year. Despite multiple arrests, many saw the root causes of the problem remaining. (Also see "China Vaccine Scandal: Hundreds Demoted But Root Causes Remain" - Scrip, 14 Apr, 2016.)

May

The CFDA again stirred up a firestorm by rejecting dozens of NDAs, citing clinical data irregularities and forgeries. Affected firms included Beijing Konruns Pharmaceutical Co. Ltd, Betta Pharmaceuticals Co. Ltd., Zhejiang Baikang Pharma, WuhanTongji Pharma, Shenzhen Neptunus, Shanghai General Pharma and Shanghai Golden (Jinse) Pharma Technology. (Also see "China Probe Reveals Widespread Drug Data Violations At Major Study Centers" - Pink Sheet, 6 May, 2016.)

Nationally known study centers were also found to be performing at less than stellar levels. Multiple data quality issues were discovered at Fudan University Cancer Hospital, PLA General Hospital (301 Hospital), Nanfang Medical University Zhujiang Hospital, Guangzhou Military General Hospital, and Chongqing Cancer Hospital.

June

The National Health and Family Planning Commission released a new decree requesting public hospitals to cut their medical expenditure growth to below 10%, which translated into a nearly 50% reduction within one and half years. (Also see "China Aiming To Slash Hospital Medical Cost Growth By Half" - Scrip, 28 Jun, 2016.)

Furthermore, the shocking “Brexit” vote in the UK result created some jitters in emerging markets including China. While some observers expected to see positive impact and likely winners such as GSK, the effect on product sales across emerging markets was forecast to be more of a mixed bag. (Also see "Brexit Good For UK Firms And Emerging Markets?" - Scrip, 27 Jun, 2016.)

July

The CFDA released a draft Drug Registration Regulation in which many saw weakened rather than strengthened intellectual property rights protection in the world's second-largest pharma market. (Also see "Fast And Furious: Lessons From China FDA's Innovation Push" - Pink Sheet, 5 Jul, 2016.)

The largest setback of the proposed regulation was the lack of patent linkage, a key element to protect intellectual property rights for innovative new drugs, several legal experts pointed out. (Also see "Revised China Drug Regulation Sets Back IPR Protection – Experts" - Pink Sheet, 28 Jul, 2016.)

China’s first long-acting fusion inhibitor to treat HIV inched towards an NDA. Albuvirtide, developed by Nanjing Frontier Biotech Co. Ltd., met its primary endpoints in a Phase III trial conducted in China, setting the stage to compete with products from J&J, GSK/ViiV and Gilead in the nation with fast-growing HIV infections, especially among the young and old. (Also see "China’s First Home Grown Novel HIV Drug Shoots For Prime Time" - Scrip, 21 Jul, 2016.)

August

Beijing marked a renewed push for the government to elevate the status of local health clinics, while discouraging patients to seek routine health services at large hospitals. (Also see "China Expands Grassroots Clinic Prescribing As Cardiovascular Epidemic Looms" - Pink Sheet, 19 Aug, 2016.)

Before the year-end, Beijing decided to add 105 treatments to the shelves of clinics for chronic diseases including hypertension, diabetes, coronary heart disease, and cerebrovascular conditions, which will be either fully or partially reimbursed.

September

A patient death from a rare form of sarcoma caused public uproar and a joint regulatory crackdown on online medical advertisements. (Also see "China Surprises With First CRISPR Trial Despite Regulatory Lag, Concerns" - Scrip, 25 Jul, 2016.)

China's Ministry of Human Resources and Social Security released a draft update to the National Reimbursement Drug List (NRDL), which last updated in 2009.

The goal is to extend reimbursement coverage to drugs with proven clinical benefits and costs, the ministry noted. The update is scheduled to be completed within 2016 and the NRDL will be updated on rolling basis, the authority said. (Also see "Count Me In! China To Update Drug Coverage After Long Wait" - Pink Sheet, 11 Oct, 2016.)

November

As the outcome of the US general election shocked the world, in China regulators wondered whether a key regulatory dialogue would be able to yield results, as president-elect Donald Trump voiced strong words against the country as he prepared to take the power. (Also see "China Keeping Eye On Key Regulatory Dialog After Trump Win" - Scrip, 10 Nov, 2016.)

In a bid to deepen its health care reform program, China said it would soon roll out nationwide the regional “Sanming Model”, with a goal of cutting medical expenditure and improving service quality. The major changes include reducing pharma distribution layers by implementing a “two receipts” mechanism for wholesaler transactions to reduce fraud. The system also routinely monitors drug prices, regulates physicians’ prescriptions, and leverage payer’s roles. (Also see "The ‘Sanming Model’: Bad Omen Or Hope For Pharma In China?" - Pink Sheet, 25 Nov, 2016.)

December

As China increasingly tightened its grip on pharma distribution, direct-to-patient pharmacies gained traction. Many see the model of combining traditional retail pharmacy services with new businesses for patients in search of specialty drugs, including new and less frequently prescribed products, becoming big in China. (Also see "DTP Pharmacies March On In China: Pharma Ignores At Its Own Risk" - Pink Sheet, 9 Dec, 2016.)

From the editors at PharmAsia News.