HONG KONG – As it works to clear out a long-standing backlog while strengthening the country's regulatory environment, the CFDA processed twice as many applications last year.

In an annual report on drug reviews it released this month, the CFDA said the combination of stricter requirements – particularly for clinical trials – and faster approvals are helping the industry morph.

"In 2015, the CFDA deepened the reforms of the reviewing system, enhanced the administration of the review process and cleared the drug backlog, increasing the efficiency of the reviews while ensuring the high quality," the agency reported.

At the end of 2014, the CFDA's Center for Drug Evaluation had a backlog of 18,597 applications. That's when it prioritized an effort by clearing up applications of uneven quality.

"This is positive news for big pharmaceutical companies," Serena Shao, A China health care analyst at investment firm CLSA told BioWorld Asia. "A listed company told me that they used to wait for one to two years for their applications to be proceeded, but now it only takes about six months."

The CFDA hired 51 contract reviewers to add some bench strength to the evaluation teams that are led by senior reviewers. The reviewing team undertook special projects reviewing applications of bioequivalence tests for generics and verification clinical trial applications of Class III new drugs.

In 2015, the CFDA received 8,211 registration applications: 561 from biologics, 358 from traditional Chinese medicine (TCM) and 7,201 from chemical drugs. The number is smaller than the 8,868 applications filed in 2014, including 454 biologics, 495 TCM and 7,829 chemical drug applications. The CFDA gave the green light to launch 25 biological drugs, 76 TCM and 241 chemical drugs.

"The number of received applications has decreased compared with 2014, but it's still at a high level," said the CFDA. "Chemical drugs and TCM had seen fewer applications but not biologics."

The CFDA processed 9,601 registration applications in 2015 including 4,676 clinical trial approvals and 391 marketing approvals. The number is 1,390 more than the applications it received during the year, which made it possible to further cut down on the backlog.

For biological products, the CFDA received 57 preventive investigational new drug (IND) applications, eight preventive new drug applications (NDA), 175 therapeutic IND applications, 27 therapeutic NDAs, 283 supplementary applications, 10 import re-resignation applications and six re-examination applications. Among these applications, the CFDA only approved two thirds of them, denied 81 and 86 were withdrawn.

The regulatory changes have had an impact on an industry that has also been affected by a series of other issues.

"Apart from the capital's influence on the stock market, China's pharmaceutical industry has been affected by some internal factors," said Shao. "One is the pressure of drug pricing. The other one is from the CFDA's new and stricter regulations."

Quality control hits hard

Since July, the CFDA has been promoting examination and self-examination of clinical trial data for integrity and authenticity. Many drug applications were either withdrawn by companies or rejected by the CFDA. Among the 1,622 items involved in the current crop of clinical data inspections, some 1, 178 were withdrawn.

"The CFDA is very serious about the quality of clinical trial data," said Shao. "About 80 percent of small drug makers had to withdraw their registration application because of this, and they had to do it all over again which could be costly and may be reflected on drug prices."

This is resulting in a more visible polarization in the industry. Smaller companies that can't guarantee good clinical results are facing more challenges and are becoming targets of M&A deals from bigger companies.

"The performance of the Chinese pharmaceutical industry will be bipolar," said Shao. "Big companies with quality systems and rich pipelines that can yield marketed products in the next two years will be winners."

"They have sufficient funds, and have the M&A opportunities that smaller and weaker companies will provide," she added.

Some of the key biologic approvals, for clinical trial or marketing, last year include an Ebola vaccine, a live attenuated oral poliomyelitis vaccine for the prevention of type I and III polio, enterovirus E71 inactivated vaccine developed by the Institute of Medical Biology of the Chinese Academy of Medical Sciences, orphan drugs acid alpha-glucosidase injection and aspartate pasireotide injection for the treatment of Pompe disease and Cushing's syndrome, axitinib for renal cell carcinoma patients and bevacizumab injection for the treatment of non-small cell lung cancer.

The CFDA also re-classified chemical drugs for registration purposes this month, moving them into five categories:

  • • novel drugs not marketed anywhere;
  • • improved drugs not marketed anywhere;
  • • novel drugs reference products marketed outside of China but no domestic products approved;
  • • generics of marketed drugs in China; and
  • • foreign drugs applying for market approval in China.

The reforms reclassify "new" drugs as drugs never before marketed anywhere in the world. Under the previous classification, the term "new" applied to drugs never before marketed in China.

The most important change is the categorization of class II and III chemicals which give clear definition and scope for new and improved drug forms and generic drugs that will need shorter time on clinical. This could encourage more domestic companies to develop such products. More detailed requirements are to be released and the influence on companies is yet to be seen.

"The ongoing drug approval reform may transform the competitive landscape of pharmaceutical companies in China. Currently, the government demonstrates a clear resolution to foster indigenous innovation and improve the quality of domestic players," said Katherine Wang, partner at Ropes & Gray. /p>