This article was written by Kim O'Connell and Suzy Madar.
Chinese and Australian businesses looking for overseas opportunities to expand in the healthcare industry should be aware of important regulatory changes that are taking place in both China and Australia.
The healthcare industry in both Australia and China is undergoing significant growth that has been accompanied by rapid regulatory change. Both countries have invested significantly in the industry which increasingly caters for aging populations that provide demand in a rapidly expanding market for prescription and non-prescription medicines. In 2016, the value of Australia's pharmaceutical market increased to US$22 billion, while China's is currently the world's second largest, at US$116.7 billion in 2016.
Growth in the sector has also been accompanied by significant regulatory shifts. Following global trends, regulators in both jurisdictions have become increasingly focused on finding ways to accelerate approvals for important new medications. Chinese regulators have been moving in this direction since 2015 and Australia is in the midst of implementing major reforms.
Accelerating approvals in Australia
Increasing the speed of approvals for important new drugs has been a global regulatory trend in recent years. In Australia, the Therapeutic Goods Administration (TGA), which regulates therapeutic goods including medical devices, prescription medicines, over the counter medicines and some complementary medicines, is in the process of introducing three expedited pathways for drug approvals.
Priority Review pathway
The Priority Review pathway, introduced in July 2017, permits sponsors to proceed under the accelerated review procedure if the application relates to a new medicine or the use of an old medication to treat "a life-threatening or seriously debilitating condition". To take advantage of the expedited review pathway, there must be no alternative treatment on the Australian Register of Therapeutic Goods (ARTG) or "substantial evidence" to demonstrate that the new drug or treatment presents a significant improvement to currently available treatment options.
This new pathway was immediately utilised. In August 2017, Roche Products Pty Ltd was the first applicant to secure priority review designation for both Alecensa, an anaplastic lymphoma kinase (ALK) inhibitor used in the treatment of non-small cell lung cancer and Hemlibra, a prophylactic medication for haemophilia A (congenital factor VIII deficiency). In February 2018 Roche's Alecensa was the first medicine to be registered on the ARTG via the Priority Review Pathway.
Complementing these accelerated reviews is the introduction of 'Provisional Approval' in the Therapeutic Goods Amendment (2017 Measures No 1) Act that amends the Therapeutic Goods Act 1989 (Cth) ('Act') to create a class of "Provisionally registered goods" that will be able to be released to the market on the basis of early clinical data on efficacy, quality and safety.
The maximum provisional registration period is two years, which may be extended by one or two years by application (up to a maximum of two extensions).
New Assessment Pathway for Complementary Medicines
Currently, listed complementary medicines contain lower risk ingredients and are permitted to make lower-level assertions about medicinal capabilities (limited to usefulness in maintaining health and the treatment of non-serious conditions). Registered complementary medicines are considered higher risk on the basis of ingredients or indications.
The Act introduces a new approval pathway that will enable sponsors to apply to list complementary medicines, including vitamins, minerals and nutritional supplements, on the ARTG with higher-level indications than are currently permissible.
Currently, listed complementary medicines are also not assessed prior to listing - listing merely requires an applicant to self-certify the safety and quality of the product. Under the proposed pathway, sponsors will continue to self-assess quality, safety and efficacy, however the TGA will also assess evidence supporting the proposed claims and indications. In all other respects these medicines must meet the current eligibility criteria for listed medicines in relation to manufacturing standards.
China prioritises specific foreign products
In China, where drug approvals generally take longer, there has been a similar regulatory focus on providing mechanisms to permit manufacturers to bring products to market more quickly.
In February 2016, the China Food and Drug Administration (CFDA) issued a notice stating that a priority review pathway would be implemented for certain categories of products including innovative drugs, products in short supply, early generics and drugs used to treat AIDS, tuberculosis, viral hepatitis, rare diseases and cancer. Complementing this, in March 2017, the CFDA issued a draft rule stipulating that foreign drugs will no longer require prior approval from overseas regulators or have to be in second or third phase clinical trials overseas before trials in China are permitted. This is a significant change that will result in drugs being able to be released to the Chinese market much more quickly.
More recently, the Chinese central government released the Draft Administrative Measures for Drug Registration ("Draft DDR") for public consultation. The Draft DDR includes a new Marketing Authorization regime aimed at addressing a shortage of authorised innovative drugs in China that is thought to be due to the fact that Chinese manufacturers have been reluctant to invest in the long approval periods for new drugs and instead have focused on the production of generic drugs.
The Draft DDR also proposes separation of manufacturing and drug licenses that are currently linked so as to permit R&D institutions with limited manufacturing capability to rely on third party manufacturers. The scheme will be open to foreign pharmaceutical companies who appoint a local Chinese entity as an agent responsible for pre-clinical and clinical trials, manufacturing operations, side effects, pricing, labelling and advertising.
Regulatory changes that fast track approvals in both countries and ease restrictions on foreign businesses in China present a significant opportunity for Australian pharmaceutical businesses looking to capitalise on the rapidly expanding markets in China and Australia.
This article was originally published in Volume 28(1) of Australasian Biotechnology (April 2018).