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Clinical trials in China spike as generic makers work toward deadline

The number of clinical trial applications approved by the China Food and Drug Administration in 2016 was up nearly six times year over year.

But that spurt may be short-lived, say industry experts.

The rise in the number of clinical trial applications was mainly due to generic drugs needing to run bioequivalence tests, said Tony Ren, vice president of China healthcare and pharmaceutical at research and brokerage firm Kim Eng Securities (Hong Kong) Ltd.

In March 2016, the State Council issued guidance on the approval process for generic drugs. The policy requires generics to undergo a bioequivalence test — which would prove they are just as good as the original — before they can be approved for the market.

The rule also applies to generics that had been approved earlier and listed on the 2012 national essential drugs list.

Manufacturers of these approved generics have until end 2018 to complete the test.

"In the past, [generic drugs] didn't have a very rigid bioequivalence requirement," said Joe Jin, a partner at global consultancy Roland Berger, who focuses on the China healthcare sector.

But now the government requires every chemical product to pass the test by the end of 2018. This includes the generics that had been approved earlier, he said.

Even traditional Chinese drugs, which are not considered chemical products, need to run post-marketing evaluation studies.

If the generic makers do not complete the test by end 2018, they would not be allowed to re-register.

So drug manufacturers have been rushing to apply for clinical trials, Jin said.

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Beijing's increased emphasis on following international clinical trial standards may also be encouraging more innovative drugmakers to conduct studies in the country.

In May, the China FDA reaffirmed its plans to accept overseas clinical trial data.

Earlier, it took around seven to eight years or even longer to market a new drug in China. "But under the new regulations, if it's a truly innovative product and the clinical trial has been conducted under a multi-center, multi-country [setting], time to market could be shortened to three to four years," said Jin.

In addition to accepting overseas data, the government also scrapped the need for clinical trial institutions, such as hospitals, to get approval from the China FDA before they could start a trial.

Now, the institutions only need to register the trial on their website.

The regulation changed an approval process to a filing process, which increased China's overall capacity to conduct clinical trials, said Jin.

However, the cost of compliance may be too high for some.

Smaller companies are likely to struggle to find additional funds and staff needed for the bioequivalence tests and good manufacturing practice standards.

"Not everyone can afford the expensive bioequivalence test, and many smaller manufacturers cannot withstand the rigid GMP monitoring process," said Jin.

In 2016, the number of drug makers and active pharmaceutical ingredients manufacturers in China fell to 4,176 from 5,056, according to CFDA data.

A recent CFDA report also showed that most drug manufacturers and distributors fell short of the manufacturing standards.

The government wants to consolidate the market as there are too many small- to mid-sized manufacturers making poor quality products, said Jin.