Writing exclusively for PharmaBoardroom, Song Ruilin of the China Pharmaceutical Innovation and Research Development Association (PhIRDA) outlines some of the key improvements and optimisations in the regulatory landscape for pharmaceutical innovation in China. Professor Song also notes the major impact that Chinese innovation is having on global R&D pipelines and therefore on global health, noting that the country is today an indispensable link in the global pharmaceutical innovation chain.

The strategic position of pharmaceutical innovation in China is increasingly prominent

In 2015, China presented its Healthy China plan and made the institutional adjustments necessary to better ensure its increasingly ageing citizens’ health, starting with the Integrated Plan and the Comprehensive Strategy. Under the continuous guidance of the Healthy China initiative and the Innovation-driven Development Strategy,  China’s pharmaceutical innovation has moved to a new level.

In 2023 the Central Economic Work Conference emphasized a focus on economic development as a central task and boosting development as the primary mission, gradually turning the blueprint for Chinese modernization into a reality. In addition, it proposed an inclusive market, boosting the confidence of market players, and enhancing the consistency of macro policy orientation. On March 5, 2024, the Second Session of the 14th National People’s Congress opened and the term “innovative drug” appeared in the Government Work Report for the first time, further elevating the importance of developing China’s pharmaceutical industry.

The review and approval system is constantly being improved, promoting regulatory efficiency

The reform of China’s regulatory system, initiated in 2015, has significantly improved drug reviews and approvals in China. The Drug Administration Law announced in 2019 has also reinforced the reform of the system from a legal perspective, laying the legal groundwork for building a full lifecycle drug review system.

In 2020, China’s National Medical Products Administration (NMPA) built an accelerated review channel for innovative drugs through priority review and conditional approvals, greatly improving the efficiency of innovative drug reviews and providing a vehicle for accelerating research and development (R&D). In 2022, the overall completion rate of drug registration applications reached 99.80 percent and the overall completion rate of review for new drug applications (NDA) and new drugs of foreign origin urgently needed in clinical settings was 98.59 percent and 100 percent respectively.

From an international perspective, the efficiency of the review and approval processes in China is gradually approaching that of the United States. According to statistics relating to the review time of approved products in China and the United States over the past six years, although the review time in China is longer than that of the United States, the average time gap is gradually narrowing. Over the past two years, the average time gap for product review and approval between the two countries has been about 100 natural days.

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Data source: CDE and FDA official websites, Pharmacodia database, and statistics by iMeta

The intellectual property protection system is gradually improving, laying the foundation for an innovative drugs market

It is a well-known fact that developing innovative drugs is a long-term endeavour that implies big investments and high risk. Thus a return period has to be established through intellectual property protection to encourage further innovation. The protection of drug patents in China was initiated in 1992. Over the past two years, with the new revision of the Patent Law and the release of supporting regulatory documents, the intellectual property system for drugs in China has seen several essential improvements.

In 2017, China explicitly proposed that it would explore the creation of a drug patent linkage system. With the formal implementation of the fourth revision of the Patent Law in June 2021, the Supreme People’s Court, the National Medical Products Administration (NMPA), and the China National Intellectual Property Administration (CNIPA) have successively issued supporting systems. The Measures for the Implementation of the Mechanism for Early Settlement of Drug Patent Disputes was officially released on July 4, 2021, formally establishing China’s drug patent linkage system, which not only draws on international experience, but also on specifically Chinese scenarios.

China’s basic research and transformation capabilities are at the global forefront

According to the Nature Index, compared to 2015, the number of top life sciences research institutions and medical research institutions in China increased by 25 and 31 in 2023 respectively, second only to the United States, demonstrating that China’s basic R&D capabilities in cutting-edge technology fields are rapidly increasing. Among the top ten global state-of-the-art technology fields, the average ratio of publicly disclosed patents between China and the United States is 8 to10 with China accounting for an average of 4.3 out of the global top 20 R&D institutions.

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Note: This ranking is based on research results selected by an independent group of leading scientists in their respective fields based on an institution’s publication output in 82 journals such as Nature and Science.

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The scale of innovative R&D is growing rapidly, with a level of quality that stands the global test

Catalyzed by the acceleration of reviews and approvals as well as the capital market, Chinese pharmaceutical companies have entered the fast lane of innovative R&D. According to statistics from IQVIA, the rate of contribution to the global R&D pipeline by Chinese pharmaceutical companies increased from 4 percent in 2013 to 28 percent in 2023. The rate of contribution to global R&D by Chinese pharmaceutical firms has surpassed that of Europe, and is second only to the United States.

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Data source: Statistics from IQVIA and iMeta

 

While the scale of R&D is growing rapidly, the quality of innovative R&D in China is also standing the test. In 2022, the Centre for Food and Drug Inspection within the NMPA completed 215 clinical trial inspections for new drug registrations, with a pass rate of 99.07 percent. The quality of new drugs researched and developed in China is also impressive. According to statistics relating to FDA inspections conducted from 2022 to the present, China has a higher pass rate in both manufacturing and clinical trial inspections than the United States.

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China’s innovation standards align with international standards

In terms of R&D standards, since joining the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) in 2017, China has gone from being a creator of global standards to an executor. Currently, the conversion rate of ICH guidelines in China has reached 100 percent. In terms of manufacturing standards, the NMPA officially applied for the Pharmaceutical Inspection Co-operation Scheme (PIC/S) on November 8, 2023, which is an important means for China to conduct drug inspections following international standards and an important foundation for achieving international mutual recognition. It also marks a major step towards China’s internationalization in pharmaceutical manufacturing.

Moreover, the incorporation of global standards has internationalized Chinese R&D. The number of international multi-regional clinical trials conducted by Chinese pharmaceutical firms has increased 8.5 times in five years to 110 by 2022 (see Figure 1-2-6), covering more than 50 countries.

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Supported by the internationalization of standards and R&D, China’s pharmaceutical innovation capabilities have gradually gained global recognition with the number of licensing deals reaching new highs.

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China has become an integral part of the global pharmaceutical innovation ecosystem

With the continuous development of science and technology, cross integration of disciplines, and the widespread knowledge of disease pathologies, all of the low-hanging fruit of pharmaceutical innovation has gradually been picked, resulting in a further increase in the difficulty and risk of new drug R&D endeavours. According to statistics, the global success rate of new drug R&D is gradually decreasing, with a comprehensive success rate of 6.3 percent in 2022. The decrease in the success rate of new drug R&D and the gradual extension of the R&D cycle have led to a lower input-output ratio for new drug development efforts worldwide. As a result, global pharma companies are increasingly looking for ways to further R&D through cooperation.

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Pharmaceutical innovation is typically driven by marginal revolutions. New technologies and targets are often explored by small organizations such as biotechs, while large companies are more willing to seek cooperation through mergers and acquisitions (M&A) with biotechs after the latter make R&D progress. However, biotech companies often lack the ability to incubate an innovative therapy and rely heavily on the R&D capabilities of outside firms.

With the increasing internationalization of China’s R&D standards, Chinese enterprises have achieved a new height of cooperation and participation in global R&D. A number of CXO enterprises in China provide high-quality R&D services for global pharmaceutical innovation at highly competitive costs. The BioSecure Act recently brought forward by the United States is not only a restriction on China’s contract research industry, but also to furthering innovation from biotech companies in the United States.

In addition to global co-operation at the R&D stage, mutual support in the pharmaceutical market has become an indispensable part of developing the global industry. Many multinationals have been exploring the Chinese market for years and several have witnessed a constantly increasing proportion of revenues stemming from the Chinese market, and a higher growth rate of operating revenue from the Chinese market than from the global market.

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The Chinese government is striving to contribute to global health

Guided by national strategies, the Chinese government has always been committed to promoting the development of global pharmaceutical innovation. While meeting the growing needs of domestic patients, the Chinese government hopes to make further contributions to the global pharmaceutical and health industry. China’s pharmaceutical innovation stands to benefit countries around the world, and the Chinese government along with the country’s life sciences companies are making joint efforts to promote it.  China has long advocated for the creation of a new type of global development partnership that would be more balanced in order to share both difficulties and responsibilities, so as to enhance the common interests of humanity.