China plans to streamline the approval procedure for innovative treatments targeting "major diseases" – as well as indications included in the national key technologies research and development (R&D) programme – as growth in the pharmaceutical sector slows.
IHS Life Sciences perspective | |
Implications | China's pharmaceutical sector faces a turning point this year, with annual growth expected to slow to around 10%. This compares with growth rates of 20% in 2012, 18% in 2013, and 13% in 2014, in part due to China's slowing overall economic growth. |
Outlook | According to local media reports, the next step by the authorities is expected to be a significant acceleration in the review and marketing-approval procedures for a number of innovative treatments, as part of major national science and technology projects, and national pharmaceutical R&D programmes. |
China plans to streamline the approval procedure for innovative treatments targeting "major diseases" –as well as indications included in the national key-technologies research and development (R&D) programme – as growth in the pharmaceutical sector slows, according to the Economic Information Daily.
Quoting executives and officials at the China Pharmaceutical Industry Development Summit in Xiamen, Fujian province, China's pharmaceutical sector is seen as facing a turning point this year – with annual growth expected to slow to around 10%. This compares with growth rates of 20% in 2012, 18% in 2013, and 13% in 2014, in part due to China's slowing overall economic growth, according to the China Pharmaceutical Enterprise Management Association.
However, innovative drugs and China's biotechnology sector are expected to continue to benefit from steady demand, as well as favourable government policies in the long-term. In particular, China's ageing population is expected to boost demand for treatments for chronic diseases, including cancer, cerebrovascular disease, heart disease, hypertension, and diabetes. The proportion of China's elderly population (aged 60 years and above) grew to 14.9% in 2015, compared with 7.5% in 1950, according to the source. In addition, China is expected to place greater emphasis on "Made in China" pharmaceuticals as a key area of strategic development.
However, there remains a gap between domestic and overseas drug-R&D, and drug approval levels. China has currently approved approximately 165,000 treatments, more than 95% of which are generics – with innovative drugs making up less than 1% of the remainder.
In addition, China's drug-approval process for innovative treatments remains lengthy in comparison with overseas markets: in China, it can take 18 months to receive feedback following submission of clinical-application materials, compared with five days in Australia and the United States; three months in the European Union; one month in South Korea; one to two months in Singapore; two months in Brazil; and four to nine months in Mexico.
Outlook and implications
Despite these challenges, concerns voiced by multinational pharmaceutical companies have apparently drawn the attention of China's State Council, which is expected to make an improved approval-process of innovative treatments a key pillar of healthcare reform. Local media reports state that the next step by the authorities is expected to be a significant acceleration in the review and marketing-approval procedures for a number of innovative treatments, as part of major national science and technology projects, and national pharmaceutical R&D programmes. The innovative treatments deemed of national importance are expected to include targeted small-molecule drugs, monoclonal antibody immunity, and monoclonal antibodies. Although China is aiming to increase its small number of firms focusing on R&D for innovative pharmaceuticals, this development is expected to principally benefit foreign pharmaceutical companies.
In the longer term, China's promotion of home-grown innovative treatments is expected to present increasing competition for multinational pharma, with a handful of companies already reaching international prominence (see China: 3 September 2015: Hutchison China Meditech states fruquintinib achieved primary endpoint in limited trial). At the same time, China is expected to continue to increase the stringency of its marketing-approval applications review, which will likely focus mainly on domestic manufacturers, rather than multinational firms with more experience of clinical-trial data preparation; however, this campaign may also result in increased red tape for multinational pharma.