RECENT HEALTHCARE DEVELOPMENTS

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1 NORTH HEAD 诺恒 CHINA HEALTHCARE OUTLOOK A newsletter on regulatory and policy developments of China s healthcare sector Contents Recent healthcare developments 1 RECENT HEALTHCARE DEVELOPMENTS 2018 Issue 1 Recent policy developments show Chinese government s efforts in encouraging pharmaceutical innovation, improving the drug review and approval, and promoting the development of healthcare professionals. Recent noteworthy policy items include: Healthcare in numbers Insight 1-2 Health information in the social media era Policy & regulatory tracker 2-5 China Healthcare Outlook is a North Head publication. If you have questions or wish to receive in-depth policy RECENT analysis, HEALTHCARE please contact us at info@northheadcomms.com. DEVELOPMENTS 1 CFDA and MOST jointly released Guiding Opinions on Strengthening and Promoting Technological Innovation in the Food and Drug Sector The China Fundamental Law on Healthcare and Health Promotion (draft) was released 2018 National Health and Family Planning Conference was Held in Beijing CFDA released Technical Guideline on Innovative Drug Phase I Clinical Trial Application CDE released the 26th list of drugs to be included in priority review State Council released Opinions on Training and Motivation of General Practitioners (GP) HEALTHCARE IN NUMBERS: IT IS EXPECTED THAT FROM 2016 TO 2021, THE CHINESE BIO-PHARMACEUTICALS MARKET WILL CONTINUE A STRONG GROWTH OF 16.4% COMPOUND ANNUAL GROWTH RATE. THE MARKET SIZE WILL REACH BILLION RMB BY INSIGHT: Health-related information in the social media era The phenomenal speed with which one social media post can go viral in China poses fascinating challenges for the healthcare industry. Despite the complexity of healthcare-related topics, it has become clear that when it comes to the dissemination of health-related information on social media, the trusted expert is whomever wins the race to virality. It only takes one individual to spread an idea and generate impact, and some recent some posts have spread in a way that could make a seasoned PR veteran jealous. In healthcare, we have seen doctors and pharmacists who previously worked behind the scenes become online celebrity KOLs with millions of fans. These healthcare KOLs use WeChat or Weibo as a platform for spreading advice to patients and the public. This method has made positive contributions to the dissemination of public health literature, and improved the average citizen s knowledge of public health. Medical professionals whose expertise was previously limited to the hospital can now spread their knowledge, allowing their value to extend to a much wider audience. However, with great power comes great responsibility. Due to the uniquely influential role that medical China Healthcare Outlook 1

2 professionals play in individuals health-related decisions, the messages that these experts choose to share can be incredibly impactful. Recently, several drugs have been questioned or criticized online by healthcare professionals, an issue that has drawn attention not only from the public, but also from drug approval administrators. At its best, this criticism is well-organized and evidence-backed, and could serve as a constructive force, pushing the pharmaceutical industry to rethink products and develop them at a speed that matches the rapid development of science and clinical needs. However, there is also information that is flawed and misleading, which could inhibit patients access to valuable medicines, and betray patients trust in the professionalism of these so-called experts. Business implications In light of these trends, pharmaceutical companies should be proactive in their response, working together with the medical community and regulators to optimize patient benefits, and protecting business interests when a product is in the social media spotlight. There are four aspects worth considering: 1. Ongoing clinical evidence needs to be generated and effectively communicated with doctors and scientific journals. Also, public awareness campaigns for target diseases should be conducted in order to promote public understanding. 2. When incorrect or ungrounded statements spread on social media, a credible source needs to be established by the company in a timely manner. This will better equip the public to objectively consider the accusations, and could drive individuals to consult their physicians if required. 3. Well-trained GR and regulatory teams are an essential channel for companies effective engagement with the authorities and relevant decision-makers. 4. Local evidence should be supplemented by global evidence if needed. International cases, approval status, and clinical studies will assist in facilitating regulators assessment of the situation. It is an unfortunate reality that there will be unfair claims regarding companies products scattered online, but it is important to remember that it is always the responsibility of the company to ensure that its products are well-understood, especially given that people rely on those products for their health. If a company can manage Companies should do their best to manage the situation in order to avoid unnecessary public fear, ensuring that a relatively minor incident does not escalate to a level at which a drug that is valuable to public health is removed from the market. In terms of business, there is no more effective test of a product s robustness than a crisis, a measure that will inevitably be linked to the communication infrastructure and process surrounding the product. For more details on these or other developments, contact: info@northheadcomms.com POLICY & REGULATORY TRACKER Overall policy Senior Chinese Financial Official Liu He Gives Speech at the World Economic Forum 2018 Affirming China s Commitment to Economic Globalization and Domestic Economic Reforms On January 24, at the World Economic Forum (WEF) 2018, LIU He ( 刘鹤 ), a senior Chinese financial official, gave a speech entitled 3 critical battles China is preparing to fight. The speech focused on China s economic plans, reiterating China s commitment to economic globalization and domestic economic reforms. The speech s eponymous critical battles are: 1) financial risk reduction; 2) poverty alleviation; and 3) environmental improvement. CFDA and MOST jointly released Guiding Opinions on Strengthening and Promoting Technological Innovation in the Food and Drug Sector On January 30, the China Food and Drug Administration (CFDA) and Ministry of Science and Technology (MOST) jointly released Guiding Opinions on Strengthening and Promoting Technological Innovation in the Food and Drug Sector, which outlines several tasks such as promoting innovation in the regulatory system and supporting the research and development of innovative drugs, and building cooperative networks. China Healthcare Outlook 2

3 The China Fundamental Law on Healthcare and Health Promotion (draft) was released The China Fundamental Law on Healthcare and Health Promotion (draft) was formulated by the National People s Congress Education, Science, Culture, and Public Health Committee, and was released for public comment on December 29, 2017, on the website of the National People s Congress. The Law mainly covers the guiding principles of the Chinese health and wellness sector, and several measures for health promotion. Specifically, the Law is composed of 10 chapters and 102 articles. Chapter six: drug supply and Chapter seven: funding and reimbursement in particular are closely related to the development of the pharmaceutical industry. underdeveloped regions, developing Chinese traditional drugs, implementing the two-child policy and exploring population strategies. NHFPC released Action Plan for Further Improving Medical Services ( ) On January 4, the NHFPC released the Action Plan for Further Improving Medical Services ( ). As outlined in the Plan, China will innovate in the areas such as innovating emergency services with a focus on treating life-threatening and critical diseases, developing day services (including day surgeries) and increasing medical service efficiency, providing pharmacy services within Tier III hospitals, which mainly refers to guiding patients on drug use. The Second Meeting of the Central Leading Group for Comprehensively Deepening Reforms Focuses on Generic Drugs On January 23, 2018, President Xi hosted the second meeting of Central Leading Group for Comprehensively Deepening Reform. The meeting had a broad discussion on several topics, of which the topic that has most direct impact in pharmaceutical sector is to further reform and improve the supply and the use of generic drugs. More precisely, the meeting calls for promoting the R&D of generic drugs, with a focus on drugs with large clinical demand, drugs targeting critical contagious diseases and rare diseases, and pediatric drugs. In addition, the meeting calls for enhancing generic drugs efficacy, as well as securing adequate supply of them National Health and Family Planning Conference was Held in Beijing On January 4, the 2018 National Health and Family Planning Conference was held in Beijing. At the conference, the National Health and Family Planning Commission (NHFPC) Minister Li Bin delivered a work report and summarized last year s achievements in the areas of health and family planning. Premier Li Keqiang called for further development in the areas such as leveraging health-related projects in Pharmaceuticals MIIT released Notice on Organizing Base Construction for Centralized Production of Drugs in Short Supply On February 1, the Ministry of Industry and Information Technology (MIIT), the NHFPC, the National Development and Reform Commission (NDRC), and the CFDA jointly released Notice on Organizing Base Construction for Centralized Production of Drugs in Short Supply. The policy aims to motivate companies and utilize current industry resources to support the continuous supply of drugs that are currently in short supply. Additionally, the plan aims to take advantage of scale effect, achieving centralized production and stable supply of 100 kinds of drugs in short supply by the year China Healthcare Outlook 3

4 CFDA released Administrative Measures on Information Disclosure of Drug Review and Approval for the Public for public comment On January 18, the CFDA released Administrative Measures on Information Disclosure of Drug Review and Approval for the Public for public comment. The document applies to information disclosure of the full process of drug registration application, including acceptance, review, and approval of drug registration applications, review process and approval. CFDA released Technical Guideline on Innovative Drug Phase I Clinical Trial Application On January 25, the CFDA released Technical Guideline on Innovative Drug Phase I Clinical Trial Application. The Guideline aims to aid companies in navigating the application process and preparing application materials, which should ultimately enhance the efficiency of the review process. The document states that applicants may apply for a pre-application meeting with the CDE. CFDA announced adoption of five ICH guidelines On January 25, the CFDA announced adoption of five ICH guidelines. For example, starting from February 1, 2018, the registration applications of Class 1 and Class 5.1 chemical drugs, Class 1 treatment biological products, and Class 1 prevention biological products shall be in accordance with M4: The Common Technical Document (CTD), and starting from July 1, 2018, the reporting of post-approval adverse drug reaction shall be in accordance with E2D: Post- Approval Safety Data Management: Definitions and Standards for Expedited Reporting. CDE released the 1st list of Patent-Expired, Terminated, or Invalidated Drugs without Generic Application On January 29, the Center for Drug Evaluation (CDE) released the 1st list of Patent-Expired, Terminated, or Invalidated Drugs without Generic Application, which is aimed at incentivizing the production of generic drugs and enhancing patients timely access to drugs. The list includes nine imported drugs targeting indications including actinic keratosis, gaucher disease, and influenza virus infections. On October 20, 2017, the CDE released an opinion-seeking document for the list, which originally included 10 drugs. In comparison with the previous list, the one drug removed by the CDE is Tavaborole, which is produced by Anacor and targets onychomycosis. CDE released the 26th list of drugs to be included in priority review On January 29, the CDE released the 26th list of drugs to be included in priority review. The list of 23 drugs includes six innovative drug applications for clinical trials (applied for by Pfizer, Roche, and four domestic companies), as well as five innovative drug applications for registration, including AstraZeneca s Lynparza and four drugs produced by domestic companies as national critical projects. CFDA released Measures of Drug Inspection for public comment On January 5, the CFDA released Measures of Drug Inspection for public comment. The document applies to all kinds of drug inspection during the development and production process, including regular inspection as well as drug spot checks. The document covers scope and frequency of inspection, as well as responsibilities of the companies being inspected. CFDA released Good Drug Data Management Practice for public comment On January 5, the CFDA released Good Drug Data Management Practice for public comment. In last August, the CFDA released an opinion-seeking document, thus the latest document was revised based on the public input that was collected in August. The two documents basically contain the same content, highlighting quality control and data requirements. CFDA released the preliminary version of Catalog of Approved Drugs in China On January 4, the CFDA released the preliminary version of the Catalog of Approved Drugs in China Healthcare Outlook 4

5 China. The Catalog currently incorporates 131 drugs, including nine domestic innovative drugs that were approved under previous registration standards, 98 imported original drugs, 10 drugs that were approved under new registration standards, and 13 generic drugs that have successfully completed consistency evaluation. According to the announcement, the CFDA will adjust the Catalog dynamically and publish updates on an online database. age (60), and the fact that the announcement did not mention his next appointment, it is expected that Mr. Jin has retired. His replacement has not yet been announced. Personnel Changes Sun Xianze will no longer hold the position of CFDA Vice Minister On February 5, the State Council announced that CFDA Vice Minister Sun Xianze will no longer hold his position of CFDA Vice Minister. Given that Mr. Sun has met the retirement age (61), and that no replacement has been mentioned, it is highly likely that he has retired. Since Sun has been elected as the Chinese Pharmaceutical Association CPA s Chairman of the Board of Directors in December 2017, he is expected to serve at the CPA in the future, with a potential focus on academic communication in the areas of pharmaceutical science and technology. Jin Xiaotao will no longer hold the position of NHFPC Vice Minister On January 10, the State Council announced the latest personnel changes within the central government. According to these changes, NHFPC Vice Minister Jin Xiaotao will no longer hold his position. Given that Mr. Jin has met the retirement Hospitals State Council released Opinions on Training and Motivation of General Practitioners (GP) On January 24, the State Council released Opinions on Training and Motivation of General Practitioners (GP), as a follow-up policy to Healthy China The Opinions aims to have two to three qualified GPs for every 10,000 rural and urban residents by 2020, and aims to increase that number to five qualified GPs by The document introduces several concrete measures, including strengthening GP education in medical universities, improving the salary system for GPs, and encouraging the investment of social capital in GP clinics. About us North Head is a strategic communications and public affairs consultancy that tracks developments related to the healthcare sector in China. To receive future issues of this newsletter or obtain more information and analysis on the healthcare policy and regulatory landscape in China, please send an to info@northheadcomms.com Strategic counselor to Shenzhen CCPIT Strategic counselor to Global Times Scan the QR code to download our ios app, Portal to China 1105 Full Tower, No. 9 Dongsanhuan Middle Road, Chaoyang District, Beijing Phone: info@northheadcomms.com China Healthcare Outlook 5