Industry Trend Analysis - Drug Approval Timeframes To Be Gradually Alleviated - APR 2017

BMI View : Improvements to China's drug approval process will only materialise over the medium term. While new strategies to enhance the regime have been put in place, including the designation of priority review for 117 products as of 2016, time will be needed for these pathways to be validated and implementation issues to be addressed. The China Food and Drug Administration will also need time to enhance its human resource capacity , which has been a key factor contributing to the drug application backlog.

Reforms to China's drug approval process will gain traction gradually, perpetuating the existing challenges facing multinational drugmakers that are seeking to launch new medicines in the short term. In 2016, the China Food and Drug Administration (CFDA) announced a total of 202 drug approvals. Products that received approval include GlaxoSmithKline's Cerva r ix (human papillomavirus vaccine), the first human papillomavirus vaccine approved in China, and Dainippon Sumitomo Pharma's meropenem. The Center for Drug Evaluation (CDE) has also introduced a priority review system, designating a total of 117 products for the full year of 2016 across 12 batches. Notable products include the range of novel hepatitis C treatments, including Gilead Sciences' Sovaldi (sofosbuvir) and Eli Lilly's Taltz (ixekizumab).

We see greater transparency and the growing use of priority reviews as positive developments for the sale of patented medicines in China. This will also bode well for the commercial prospects of multinational drugmakers. The emphasis on provincial tendering has put downward pressure on off-patent medicines, forcing companies to rely on innovative pharmaceuticals to sustain growth. For example, Novo Nordisk's return to double-digit local currency growth of 12% in China for the full year of 2016 was driven by the performance of modern insulins, and partly aided by a stabilisation of market share and strong underlying insulin market growth. We are forecasting patented pharmaceutical sales in China to rise from CNY169bn (USD25bn) in 2016 to CNY470bn (USD61bn) by 2026, at a compound annual growth rate of 10.0% in local currency terms and 9.3% in US dollar terms.

Drug Approval Regime To Improve
China: New Drugs Approved (LHS) And Drugs Given Priority Review (RHS)
Source: CFDA, CDE, BMI

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