China’s Standing Committee of the National People’s Congress (NPC), the country’s legislature, will hold a meeting from October 30 to November 4 to review the authorization of the State Council, the central government, to carry out a pilot program that will introduce market authorization holder of drug (MAH) system and reform the drug registration system. On August 9, the State Council issued the Opinions on Reforming Review and Approval Process for Drugs and Medical Devices (RAP Opinions). Since several key reform measures initiated by the RAP Opinions involve amendments to China’s Drug Administration Law, the State Council must receive the authorization of the NPC. If the authorization is approved by the NPC, the reform of China’s RAP will be accelerated.
The direct pressure for reform comes from the very serious backlog for RAP in China. As of August, there was a backlog of 21,000 applications, and large backlogs have appeared repeatedly in the past decade. For example, there was a backlog of 17,000 in 2005 and a backlog of 27,000 in 2008. These backlogs attract more and more criticism, both from companies and patients. Patients, unable to benefit from a new drug, especially those made by foreign companies and that have proven successful and effective in other territories, have suffered. Some patients have to either rely on smuggled drugs or conduct expensive medical tourism. Now, the State Council seems determined to reform the broken RAP system completely, with the following key reforms:
- Give more resources to the regulator, China Food and Drug Administration (CFDA). In China, there are very strict controls on the functioning of each government agency, including staff salaries, and these controls are not adjusted dynamically. This leads to a serious shortage of personnel. Currently, there are only 120 employees in CFDA responsible for the technical review, while it recieves approximate 8,000 to 10,000 applications each year. In order to deal with these problems, RAP Opinions consider giving CFDA more liberty to hire examiners or experts to handle technical reviews, as well as to adjust and increase the registration fees for drugs and devices every five years, to increase CFDA’s funding.
- Launch MAH Pilot Program for Drugs. In the current legal framework, only drug manufacturers are qualified to obtain regulatory approvals, which means R&D institutions and scientific research personnel need to either build a manufacturing line themselves to obtain approvals, which requires great investment, or to transfer their technology to a drug manufacturer. The origin of this rule comes from China’s long tradition of planned economy, during which government regulation of drugs concentrated on their industrial production. Under the new proposed MAH pilot program, both R&D institutions and scientific research personnel can apply for approvals for new drugs. Furthermore, when R&D institutions and scientific research personnel transfer the new drug approval to a drug manufacturer, it will not be necessary to repeat the technical review process.
- Simplify and improve the Review and Approval Process. (1) Companies can arrange parallel clinical studies for new drugs that have not been marketed in other countries, and any qualified clinical data obtained from multicenter clinical studies can be used in the application. (2) Some innovative drugs within a defined scope will get expedited review and approval, and companies will be able to apply for this expedited approvals for much-needed drugs as long as they promise not to charge prices that are higher than those in the drug’s originating country or neighboring comparable markets. (3) The approval processes for drug packaging materials and excipients will be simplified.
Only setting forth some general principles, the RAP Opinions still need more detailed implementation measures, which are expected from the CFDA later. However, since the CFDA lacks the independence its foreign colleagues usually have, it may face some restrictions from other government branches. Whether it will be able to get enough flexibility to recruit qualified staff is also in question.
Apparently aware of these challenges, the State Council requires in the Opinions the establishment of a joint task force amongst the relevant government agencies to guide the reform, and it appointed a new director, Jingquan Bi, to CFDA early this year.
Mr. Bi once served as Deputy Director of the National Development and Reform Commission (NDRC), China’s most powerful Ministry which has a nickname “the little State Council,” and as Deputy Secretary-General of the State Council, who helps the Prime Minister to coordinate several Ministries’ work. His experience, from some pharmaceutical companies’ point of view, may help persuade other Ministries to support this reform.
Considering that NDRC recently deregulated price controls on drugs, and Mr. Bi’s experience in NDRC, this view makes some sense. However, reform on RAP is far more complicated, and its result may largely be determined by how fast the central government will be able to modernize its administrative system on the whole.