My recent article published on FDLI’s Update Magazine:

https://www.fdli.org/2018/04/update-china-breaking-great-wall/ 

On April 26, 2018, China Drug Administration or CDA (formerly China Food and Drug Administration or CFDA) published a draft guidance titled Measures for the Implementation of Data Protection for Pharmaceutical Tests (Interim) (“Draft Guidance”).  This is the first time CDA provides details on how the data exclusivity applies to pre-clinical and clinical data submitted to the agency.  Companies with plans to launch pharmaceutical products in China should carefully review the Draft Guidance and assess its implications.  Comments are due on the Draft Guidance by May 31, 2018.

By way of brief background, before the publication of the Draft Guidance, China already has in place limited data exclusivity for pharmaceuticals.  In particular, as part of its obligations undertaken with its accession to the WTO, China agreed to implement data exclusivity with a term of protection of six years for pharmaceuticals that utilize new chemical entities.  The current Draft Guidance has expanded the scope of the data exclusivity to cover more products including innovative drugs, orphan drugs, pediatric drugs and innovative biological treatment products, as well as drug applications that have successfully challenged a patent.  Notably, the Draft Guidance limits the type of data covered to those pre-clinical and clinical trial data related to drug efficacy, and explicitly excludes data related to drug safety.  The Draft Guidance furthers states that to be protected, the data must meet the following requirements:

• The data are required by the agency as part of the application for obtaining the market authorization;
• The data are not otherwise disclosed to the public prior to the application;
• The data are independently developed without relying on data developed by others or publicly available studies.

For the data exclusivity periods, under the Draft Guidance, generally speaking, six years for innovative drugs approved in China and twelve years for innovative biological treatment products.  The Draft Guidance further provides detailed guidance on how the data exclusive periods are calculated for innovative drugs:

• If the drug application uses data from clinical trials conducted in China, or data developed with multicenter clinical trial in China and the application is either submitted in China (first) or submitted in China concurrently with other countries/regions, six years for innovative drugs and twelve years innovative biological treatment products.
• If the drug application uses data from multicenter clinical trial in China and the drug is already approved in other countries or regions first, the data exclusivity is one to five years depending on the delay.  If the time lapse between the drug’s first approval outside of China and application in China is more than six years, there is no data exclusivity.
• If the drug application uses data from clinical trials conducted outside of China with no Chinese patients, the data exclusivity periods are 25% of the above; if the application is supplemented with clinical trial data in China, 50% of the above.

For orphan drugs and pediatric drugs, the data exclusivity periods are six years.

Under the Draft Guidance, the data exclusivity starts from the date of application approval.  To invoke the data exclusivity, the drug applicants are required to prepare a separate application to CDA along with the new drug application.  While during the data exclusivity periods CDA cannot approve another drug that contains the same active ingredient and the same indications using the protected data, the Draft Guidance also provides a dispute resolution mechanism through which generic drug applicants can challenge the data exclusivity.  The data exclusivity is also revoked if the companies fail to market the products in China within one year after obtaining regulatory approval.

In summary, the Draft Guidance on data exclusivity is clearly aimed at encouraging more global companies to launch innovative drugs in China and also provides incentives for companies to conduct clinical trials in China.  It is somewhat concerning, however, the Draft Guidance seems to be inconsistent with China’s previous commitment with a term of protection of six years for pharmaceuticals that utilize new chemical entities.  In particular, for an innovative drug with clinical trial data outside of China with no Chinese patients, the Draft Guidance would only grant 25% of the six years exclusivity period.  Further, the Draft Guidance fails to clearly define the exceptions to the data exclusivity and the language might be subjected to different interpretations that favor generic drug companies.  For examples, the requirement that the data protected must be required by the agency as part of the drug application may overly restrict the scope of the data that are protected.  It is counter-intuitive that a drug applicant will submit irrelevant data.  As such, it is our view that CDA should either provide further clarification or simply delete this requirement.

On Feb 27th, China Food and Drug Administration (CFDA) published their inspection reports for the following eight international medical device manufacturers under its Medical Device Good Manufacturing Practice:

• Terumo Corporation (Japan)
• Shimadzu Corporation (Japan）
• St. Jude Medical Cardiac Rhythm Management Division (U.S.)
• Covidien LLC (U.S.)
• William A. Cook Australia Pty, Ltd. (Australia)
• 3M Health Care (U.S.)
• NovaBone Products LLC (U.S.)
• Synthes GmbH (Switzerland)

CFDA began to publish these oversea inspection reports on its website starting from November, 2017.  On December 15, 2017, CFDA suspended the import authorization of a medical device due to severe deficiencies observed during an on-site inspection.  The product is HER-2 Test Kit manufactured by Leica Biosystems Newcastle, Ltd (U.K.)

While CFDA had identified cGMP deficiencies in each of the above manufacturers’ practices, and asked these companies to provide a written response (in both English and Chinese) with corrective actions within 50 working days, none of these observations appear to be major or critical deficiencies that warrant follow-up enforcement actions from CFDA.

A closer look at these observations reveals that some of these international companies are either unaware of the Chinese legal requirements for medical device manufacturing or simply assume their quality system will pass muster.  For example, in the inspection report issued to William A. Cook Australia Pty, Ltd., CFDA found that the company did not even reference Chinese Medical Device Good Manufacturing Practice and associated appendices in the manufacturer’s quality handbook.  It is, therefore, prudent for medical device manufacturers to assess whether their current quality system will meet the Chinese legal requirements and document their gap analysis.

CFDA also plans to conduct more oversea inspections of pharmaceutical manufacturers.  According to CFDA’s published work plan, a total of thirty-three oversea pharmaceutical manufacturing sites will be inspected in 2018.

U.S. exporters of dairy products to China are subject to importing country listing requirements for manufacturers or processors as a precondition of market access.  Recently, the U.S. Food and Drug Administration (FDA) has signed a Memorandum of Understanding (MOU) with the Certification and Accreditation Administration of the People’s Republic of China (CNCA), formally establishing a registration process for U.S. food manufacturers who export certain foods to China.  FDA also issued guidance for industry on how to establish and maintain a list of U.S. milk and milk products, infant formula, and formulas for young children manufacturers or processors.

In this memorandum, my team summarizes the key legal requirements for exporting dairy products to China.

“A journey of a thousand miles begins with a single step” (Chinese: 千里之行，始於足下）