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European Pharmaceutical Contractor

The China Proposition


Albert Liou at PAREXEL International offers some insights into the key benefits that China offers for conducting clinical trials


China not only has the largest population in the world but also one of the fastest growing pharmaceutical markets. Experts have projected that China will soon be the world’s fifth largest market, advancing from eleventh in 2000. Since China entered the World Trade Organization in 2001, intellectual property issues have improved tremendously. The following are some of the key benefits that China can offer in terms of conducting clinical trials:

  • Patients who are not on competing medications are easier to access in China, thus providing the most efficient study subject enrolment environment. Additionally, there is a great market potential in China, due to its large population 
  • There are unique gene pools among the Chinese population, which are beneficial to pharmacogenomic studies 
  • There is a high prevalence of gastrointestinal cancers, hepatitis, nasopharyngeal cancers, and neural tube defects, as well as non-smokers with EGFR mutation 
  • Significant savings on overall clinical trial cost can be realised, since the cost of conducting trials in China can be one third of that in the US 
  • Chinese investigators are well educated and motivated to participate in clinical trials
  • Government institutes and CRO services are now expanding into GLP level preclinical labs and full-scale clinical trials 
Despite the overwhelming number of benefits of the market, there are some drawbacks that may need to be taken into consideration when conducting drug development activities: 
  • Regulatory lead time can take from 7 to 12 months in obtaining IND and CTA approvals 
  • Challenges can be encountered while communicating with partners in China 
  • Factors such as a lack of transparency, or government interference with the intent to protect the Chinese domestic industry can also be problematic 
  • Samples, especially blood samples, are difficult to export 
  • There are insufficient numbers of accredited sites and investigators for clinical trials 
  • There is limited experienced talent within the country with knowledge of both local and international practice

Moreover, the Chinese Government aims to make China the world’s R&D hub and they have created several initiatives to encourage global companies to set up R&D centres in pursuit of this goal. As a result, within recent years more than 20 global biopharmaceutical companies have established R&D centres or laboratories in China. This trend will only increase in the near future. Recent progress includes the signing of a tripartite MOU agreement with Japan and Korea on a joint collaboration to explore the potential of ethnic similarity with an end goal of mutual acceptance of clinical data in the future. This effort should greatly facilitate the conduct of simultaneous global and regional developments. Additionally, the establishment of the US FDA will increase the communication between the mutual authorities to drive the improvement of Chinese regulations.

EXPLORING THE BENEFITS

Incentive programmes for foreign companies in establishing R&D centres in China include tax exemption on qualified technology transfer, technology development and related technical consulting and services. Companies that are qualified for the High New Technology Enterprises (HNTE) can benefit from a 15 per cent deduction on their Corporate Income Tax (CIT), as well as two years of full tax exemptions followed by three years of 50 per cent tax exemptions if they were to establish R&D facilities in one of the six major economic zones of Shenzhen, Zhuhai, Shantou, Xiamen, Hainan and Shanghai Pudong New Area. In addition, companies would receive an extra 50 per cent expense deduction for any R&D expenses incurred by development of technology or product, personnel salary, and so on.

Regulation has always been a key consideration for global pharmaceutical companies when constructing their operational development plans as well as their site selections. The current China regulation has an emphasis on encouraging drug innovation. The China regulatory authority, the State Food and Drug Administration (SFDA), issued a special review and approval procedure in January 2009 to encourage the development of innovative drugs. The SFDA will establish the IND mechanism through a stepwise approach. Highlights of this approach include:

  • Innovative drug registration application is subject to this new regulation
  • The review timeline is 80 working days for an IND application, shortened from the original timeline by 10 working days
  • Multiple communication channels with CDE
  • Various fast tracks for data supplementation during review procedures
  • Risk management mechanism for Special Review and approval

DEVELOPING R&D

The SFDA has published a batch of Chinese translations of FDA guidelines on the CDE website; in the near future, more FDA and EMEA guidelines will be translated and published. Currently, there are 56 guidelines for drug R&D in China. The SFDA expects to transform these foreign guidelines to Chinese local guidelines. Furthermore, the SFDA published a draft guideline for EC review of clinical trials for comments.

During the China-Japan-Korea Clinical Trial Symposium, which was conducted on 17th December 2009 in Beijing, the SFDA shared some of its short- and midterm visions for the future. In the short term, the focus is to aggressively participate in global clinical trials to expedite the establishment of regulation strategies. Goals include further streamlining current trial approval time, expanding clinical trial sample import and export criteria, establishing ethics committees, and increasing the quality and number of qualified clinical trial centres.

In the mid-term, the focus will be on encouraging pharmaceutical companies in developing R&D capabilities and developing relevant regulations to facilitate the establishment of an international standard addressing a new drug R&D platform and system. This effort will include establishing new drug IND and NDA approvals, building out standard SAE reporting procedures, establishing a mechanism for tax revenue and pricing policy, and inspiring Chinese companies and investigators to be more involved in global research and development of new drugs.

CONCLUSION

Over the years, the Chinese authorities and the SFDA have demonstrated progressive improvements through regulatory reforms and aggressive campaigns to increase the number of new drug development activities in the country. China’s healthcare industry is growing at a combined annual growth rate of over 20 per cent, and China is poised to become one of the world’s dominant players due to its exponential growth and market potential. From the prospect of its market outlook, it is anticipated that by 2013, China will become the third largest pharmaceutical market, with an estimated value of $78 billion, immediately behind the US and Japanese markets.

With China’s projected growth as a biopharmaceutical end market, and given the challenges and opportunities outlined in navigating this emerging country for clinical development, it is clear that biopharmaceutical companies will need to have access to experienced partners with country-based regulatory and clinical operations, local know-how, and expertise in global and regional clinical trials. Ultimately, larger and more complex global development programmes have created opportunities to partner to bring more innovation to study design and execution, as well as determining ways to bring cost and time efficiencies to the process through global development strategies.


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Albert Liou serves as Corporate Vice President and General Manager for PAREXEL International in Asia Pacific, and is responsible for the overall business and operations for the region. Before joining PAREXEL, Albert founded APEX International Clinical Research, a long-term alliance partner, which PAREXEL acquired in 2007. Albert now oversees PAREXEL’s 17 locations throughout the Asia Pacific region, including China, focusing on furthering the company's long-term commitment to providing a high level of standardisation and quality clinical development services in these geographies.
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