China SFDA Seeks Public Comment On Change To Proposed Definition Of "New" Drugs

Chinese regulators are soliciting a second round of public comment on proposed changes to China's drug registration rules that would narrow the criteria under which a drug could be considered "new."

New drugs are exempt from government price caps, and some companies have avoided the caps by, for example, modifying drugs slightly by altering dosages or means of administration.

China's State Food and Drug Administration published a second draft of the proposed regulations on May 30, and will be collecting comments until June 12. Comments must be submitted in writing to the SFDA's Department of Drug Registration, the agency said.

Under existing regulations, which first went into effect in 2002, a change in dosage or form is enough to qualify a product as a new drug.

"Under the existing regulations, some pharmaceutical companies used the loophole in the law and applied for new drug status after just changing the name of the drug or the dosage," Tao Xiaoquan, a medical lawyer with Nanchang, Jiangxi-based Wanwei Zhongtian law firm, told PharmAsia News. "Then they can set the prices of the new drugs themselves, which results in higher profits."

"It is a main reason why the drug prices haven't been reduced despite dozens of price cap revisions," he said.

In addition, the draft rules would eliminate the "fast track approval" process for certain types of drugs, such as those for AIDS and cancer, Paul Li, an attorney in the San Francisco office of Squire Sanders Legal Counsel Worldwide said in an interview.

"This shows that the SFDA places safety above availability of such new drugs," Li said. However, the proposed rules would still provide for "special review" channels for foreign-made drugs to enter the Chinese market, he said.

"The revised draft is good for multinational pharmaceutical companies," he added. "And it's good for the long-term development of the industry."

According to Rui Guozhong, director of the Beijing-based China Pharmaceutical Science & Technology Industrialization Center, the timing of the draft rules is particularly good for foreign firms.

"With the changing policy environment and the opening market, the foreign pharma companies will steadily increase their market share within the industry," he predicted. In addition, the more stringent requirements for new drug approvals will serve to the benefit of Western firms, which are used to higher standards in their home markets.

"Usually, their rules exceed the present regulation legislation in China," Rui told PharmAsia News.

Decentralization of Power

Under the draft rules, the process for approving new drugs would also become less centralized, SFDA Assistant Commissioner Wu Zhen told state-owned media.

Currently, all new drug approvals are handled by the SFDA itself. Under the revised draft rules, however, the approval for some new medicines would be administered by provincial authorities.

The goal is to improve efficiency, said Rui. But in practice, decentralization may lead to confusion. "It could lead to different standards for drug approvals across the country," he said.

In addition, pharmaceutical companies sometimes play important roles in local economies. "This can make it difficult for local agencies to stay neutral and fair," Rui noted.

-Rachel Liu

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