The China Food and Drug Administration has issued two drafts proposing amendments to the national drug registration and contract manufacturing rules that could potentially have significant impact on the pharmaceutical industry and on contact manufacturing organisations.
IHS Global Insight perspective | |
Significance | The draft amendments to the Drug Registration Regulations (DRR) include a number of proposals that will ease generic filings in China, such as the addition of a "Bolar Exemption" that permits the review and approval of generic filings for research purposes prior to patent expiry of the originator product. |
Implications | For contact manufacturing organisations, the draft amendments throw up new barriers, prohibiting a broad range of products from contract manufacturing, but delegating approval responsibilities to provincial-level food and drug administrations. |
Outlook | On the positive side, the draft changes to the DRR make Investigational New Drug approvals transferrable, and introduce a degree of flexibility to the clinical trial process not possible under current rules. |
DRR amendments
The China Food and Drug Administration (CFDA)'s draft amendments to the Drug Registration Regulations (DRR) were issued on 13 November, with comments from stakeholders sought until 13 December. For a link to the notification (in Chinese), see here. The key proposals include:
- Bolar Exemption: The deletion of Article 19 from the current DRR that requires the CFDA to accept generic filings no earlier than two years prior to expiration of the innovative drug, and does not permit market approvals for generics prior to patent expiry. As highlighted by Sidley Austin legal practice, the CFDA states that the deletion is made in order to be in line with Article 69 of China's Patent Law, which contains a clause similar to the Bolar Exemption – permitting the CFDA to accept, review and approve generic applications prior to patent expiry for research purposes, upon receipt of a non-infringement affidavit from the filing party.
- New drug registrations: The draft amendment adds a clause permitting a supplementary application to be filed with the CFDA, prior to Phase III trial commencement for pharmaceutical or biological products, in case of changes to: the holder of the Investigational New Drug (IND; or Clinical Trial Application) approval, manufacturing process, formulation, specification, or manufacturing site. The companies must file a supplementary application with supporting documents and study data to the CFDA for approval of such changes.
- Administrative exclusivity: Under current rules, the DRR grants five years of administrative exclusivity (or New Drug Monitoring Period) to locally made drugs where they are the first to gain marketing approval; filings from other manufacturers for the same active pharmaceutical ingredient (API) can only be continued if clinical trials have been initiated. The draft amendments propose allowing follow-on submissions whenever an IND has been filed prior to the start of the administrative exclusivity period, and for those products that qualify for marketing approval they are also granted five years' administrative exclusivity. Where a foreign drug gains import approval, the CFDA may continue to approve other filings made prior to that approval, or these may be withdrawn and re-filed as generics.
Contract manufacturing amendments
The proposed draft amendments to China's contract manufacturing rules for pharmaceutical and biological products were issued on 8 November, with feedback sought until 8 December. For a link to the notification, in Chinese, see here. The key highlights are summarised below, as outlined in a briefing from Ropes & Gray law practice.
- Approval authority delegated to provincial FDAs (PFDAs): The draft amendment proposes delegating approval for review and approval of contract manufacturing organisation (CMO) activities to the PFDA in the province where the outsourcing manufacturer is located, with pre-approval from the contract manufacturer's PFDA required if not located in the same province.
- Greater barriers for CMOs: More product categories are to be barred from contract manufacturing; the amendments expand the list of banned products from vaccines and blood products alone to include narcotic drugs, psychotropic drugs, pharmaceutical precursor chemicals, and their drug preparations, biological products, biochemical multi-component drugs, TCM injections, and drug substances.
- On-site inspections: The PFDAs will also carry out mandatory on-site inspections of contract manufacturing facilities, technology level, quality management, and consistency of product standards, as well as paper-based reviews.
Outlook and implications
The CFDA has issued its first major proposals since being rebranded (from the State Food and Drug Administration) and granted independent status from under the Ministry of Health in March this year (see China: 18 April 2013: CFDA's new ministerial status to see reforms including greater role for provinces in approvals). The DRR, first issued in 2007, is the key piece of legislation setting out the registration process for pharmaceutical and biological products in China, and industry will be closely watching for the final version of the amendments when released, likely within the first half of 2014 – although the review process for both documents is unlikely to lead to drastic alterations.
The proposed changes to the DRR in relation to the Bolar Exemption are along the lines of those seen in developed markets including the United States – where it is also known as the Hatch-Waxman Exemption – but the concern for innovative companies in China is that implementation of this exemption will be imbalanced, and undermine patents in China. Unlike the US Hatch-Waxman Act, China's patent laws do not include terms allowing patent linkage or extending patent terms. The relaxation of rules relating to the administrative exclusivity period are also in favour of generic firms.
On the positive side, the changes to the rules relating to new drug registrations would appear to signal more flexibility on the part of the CFDA to accept amendments to IND applications, where currently the IND process is reset if changes are made, leading to long delays in the development process.
For CMOs, the amendments to the contract manufacturing regulations are of significant concern, and could put a dampener on the industry at a time when there have been significant investments in anticipation of future expansion from domestic and foreign companies. Boehringer Ingelheim (Germany), Innovent, WuXi Apptec (both China), and JHL Biotech (Taiwan) are among the firms to have made recent investments in biologic CMO facilities over the last year (see Germany - China: 7 June 2013: Boehringer Ingelheim invests USD45 mil. in Chinese CMO biologics plant). The implications are somewhat unclear at present, but may mean that instead of turning to CMOs for local production, foreign firms will be obliged to continue to import, or to out-license manufacturing rights to local firms. Conversely, the delegation of responsibilities to PFDAs should introduce a more flexible approval environment that allows more rapid approvals at the provincial level, rather than all applications going through the central office.
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