Asia Regulatory Roundup: CFDA Builds Priority Review Pathway for Drug Approvals (1 March 2016)

Welcome to our Asia Regulatory Roundup, our weekly overview of the top regulatory news in Asia.

CFDA Creates Priority Review Pathway for Cancer, Rare Disease Drugs

The China Food and Drug Administration (CFDA) is creating a priority review pathway to cut the time it takes for some drugs to come to market. CFDA is aiming the initiative at products to treat certain significant illnesses and those that use advanced technology to deliver clear therapeutic benefits.

In the proposal, CFDA details the criteria by which it will assess the clinical value of a product and, by extension, its suitability for inclusion in the priority review program. As well as considerations such as the use of advanced technology, the list of criteria includes the seven groups of patients CFDA is trying to serve through the fast-track scheme. Cancer, rare diseases, AIDS, tuberculosis and viral hepatitis are the five diseases being prioritized by CFDA. The other classes of drugs in line to receive priority review are those aimed at pediatric and elderly patients. 

Products that fit into the priority review categories will benefit from shortened regulatory timelines throughout the development and approval processes. CFDA has committed in writing to handling various steps of the processes within a certain timeframe, theoretically giving applicants far greater visibility into how long they will have to wait for a decision. Each of the timeframes is measured in days, with the single longest step taking 90 days. CFDA has given itself as few as five days to carry out certain tasks. 

The regulator is to implement the tightened timeline alongside a more flexible approach to certain aspects of the research and submission process. In rare diseases, for example, CFDA is open to firms running very small trials, an essential allowance given the tiny patient populations associated with some conditions. CFDA will review the requirements for rare disease drugs based on the size of the patient population and level of unmet need in China. The regulator is to take a similarly flexible approach to breakthrough drugs, giving conditional approval to those that are significant advances.

If the priority review process works as envisioned by CFDA, it will free a subset of products from the slow, onerous pathway drugs traditionally follow in China and cut the time it takes for patients to get access to therapies that cater to major unmet needs. Yet, in focusing its attention on products that are in some way exceptional, the scheme falls short of being a fix for the time-consuming, opaque primary process that has attracted the criticism of drugmakers. 

CFDA Statement (Chinese), Reuters

Indian Budget Overlooks API Manufacturer tax Structure Complaints

The Indian government has opted against changing the tax structure covering active pharmaceutical ingredient (API) manufacturers and importers in its budget for 2016. Some observers had expected Finance Minister Arun Jaitley to revise the tax code to boost the competitiveness of local producers and ultimately lower the cost of finished products.

Critics of the current situation note that, with the excise duty rate for APIs being more than double that of finished products, there is an accumulation of unused Cenvat credit, a scheme that allows manufacturers to offset taxes paid on raw materials. By cutting the rate of tax paid on APIs to 6%, the same rate that already applies to finished products, the government could have ended the issue, dubbed the “inverted tax structure,” while simultaneously advancing its initiative to support local raw material manufacturers.

However, despite India making no pharmaceutical raw ingredient tax reforms during 2015, which it termed the “Year of APIs,” Jaitley has overlooked the subject in the budget for this year. Faced with this snub and other perceived shortcomings of the 2016 budget, the industry sees the proposals as a letdown. “For [the] pharmaceutical sector the budget is slightly disappointing. The major setback is withdrawal of tax deduction on research and development expenses,” Murtaza Khorakiwala, managing director of Wockhardt, told Business Standard.

Today, companies in India receive a 200% tax reduction on R&D expenses. This is being withdrawn in stages. At the start of the 2017-18 financial year, the tax reduction will fall to 150%. The rate will fall again in 2020, bottoming out at 100%. For Wockhardt, which spent Rs 489 crore ($71.9 million) on research in the most recent financial year, the reduction of the tax break represents a significant blow. In compensation, the government is offering a scheme reminiscent of the United Kingdom’s patent box. Jaitley is setting the tax on sales from patents developed and registered in India at 10%.

Jaitley’s Speech, Business Standard

Malaysia Clarifies Responsible Person Criteria in Declaration of Conformity Guidance

The Medical Device Authority (MDA) of Malaysia has posted guidance on declaration of conformity, the process through which manufacturers confirm their products comply with all applicable Essential Principles of Safety and Performance.

Emergo, a medical device consultancy, highlighted an explanation of who is eligible to handle filings for establishment licensing and medical device registration as being among the more notable topics described in the guidance. Each establishment must name an employee as its “responsible person” and give them the power to perform these tasks and manage other legal responsibilities covered by Act 737 and related pieces of legislation. MDA expects a very senior member of an organization, such as the CEO, managing director or general manager, to take on the role of responsible person.

MDA wants the declaration of conformity to be signed by someone of similar status. For Malaysian manufacturers, a signature from the person responsible for the declaration or another member of senior management is acceptable. The situation for foreign manufacturers is slightly different. When receiving declarations from overseas medical device companies, MDA will only accept the signature of someone from the upper echelons of the business, such as the proprietor, CEO, president or managing director.

The publication of the guidance continues the expansion of the documentation covering the medical device sector in Malaysia. Late last year, MDA released a related document covering conformity assessment bodies. In the months prior to that, MDA published medical device documents about good distribution practices and field corrective actions.

Guidance, Emergo

Japan Starts Consultation on Medical Equipment Good Review Practices

The Pharmaceuticals and Medical Devices Agency (PMDA) of Japan is seeking feedback on proposed changes to medical equipment good review practices (GRPs). PMDA has used the text to set out its expectations regarding the content and formatting of filings related to medical devices.

Under the terms of the draft guidance, submissions must meet the formatting requirements set out in the Summary Technical Documentation, a standardized approach created by the Global Harmonization Task Force (GHTF). GHTF, which is now known as the International Medical Device Regulators Forum (IMDRF), created the format to standardize filings around the world.

As well as setting out these broad terms, the GRP document goes into specifics, such as the need for filings to describe the natural history of the disease being targeted by the medical device. PMDA has given the industry until 22 March to comment on the draft.

PMDA Notice (Japanese)

Other News:

CFDA has released a document to explain its approach to complaint management. The document, which was released days before CFDA began enforcing its revised approach to whistleblowers, sets out the sort of information the regulator will need from complainants to assess the validity of their claims. CFDA Notice (Chinese)