Chinese gov't outlines changes to import tariff, clinical trial applications, IP protection

By Melissa Fassbender contact

- Last updated on GMT

(Image: Getty/Evgeny Gromov)
(Image: Getty/Evgeny Gromov)
Significant regulatory changes by the Chinese government will accelerate drug development timelines and positively affect sponsors’ bottom line, says CRO.

The Chinese Premier Li Keqiang announced several developments​ during an executive meeting of the State Council of the People's Republic of China last month.

Of the highlighted developments, plans include those “to enhance quality supervision,​” establish “intensified on-site inspection of foreign drugs’ production,” ​and double down on counterfeit drugs, according to the release from the State Council.

Reduced tax burden

The government also committed to reducing the import tariff to zero for all "common drugs,"​ including anticancer drugs, alkaloids with anticancer effects, and imported patented Chinese medicines. Additionally, it will “greatly reduce”​ the tax burden of value-added tax (VAT) as it relates to the production and import of anti-cancer drugs.

“Overall these changes are very positive and are in contrast to the tariff bans in other areas that are affecting the USA and China,”​ said Philip Gregory, managing director, China, of George Clinical, a clinical research organization (CRO) based in Asia-Pacific.

Reducing the import tariff for common drugs to zero should also reduce import costs for drugs manufactured overseas and make import of those agents easier into China, he told us. The changes could allow manufacturers to reduce the prices of such drugs in the China market, in some circumstances.

Clinical trial applications

Clinical trial applications should also “be deemed automatically approved over a certain period of time”​ in a move “to accelerate the pace of new drugs entering the market,”​ according to the State Council.

The process is expected to be similar to the US Food and Drug Administration’s (FDA) investigational new drug (IND) mechanism. While changes have not yet been implemented, Gregory said draft proposals to improve application submission “have set out a radical change to the process.”

As part of this, ethics committees will become “central to the approval process,”​ said Gregory. Once an application is approved by ethics, the CFDA – or a new regulatory agency – will have 60 working days to issue further questions, he explained.

“If no questions are received then the trial may proceed,”​ Gregory added. “This will shorten the approval process to 4-5 months.”

Changes to the clinical trial application process – as well as the tariff reductions – will have a “positive impact on a sponsor's bottom line,”​ according to the CRO.

Intellectual property

The Chinese government has also made changes to strengthen the protection of a sponsor's intellectual property rights by setting the maximum data protection period for new chemical drugs to six years.

For drugs entering the market in both China and globally, the patent protection period is set at a maximum of 5 years.

Gregory explained: “IP protection is seen as being very important and the Chinese Government wants to strengthen the protection granted by law, thus encouraging overseas companies to develop their drugs earlier for the China market, without concerns about loss of IP in the short term.”

Last year, the CFDA also announced plans to accept clinical trial data from other countries​ and become a full regulatory member of the ICH​.

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