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China’s Drug Discovery Firms Will Soon Be Able To Launch Their Own Medicines

Chinese government’s move is expected to encourage innovation in the pharmaceutical sector

by Jean-François Tremblay
November 12, 2015 | A version of this story appeared in Volume 93, Issue 45

CORRECTION: This story was updated on Nov. 17, 2015, to correct the title of Kuo-Hsi Cheng. He is general manager of ScinoPharm (ChangShu) Pharmaceuticals in China, not vice president of operations at ScinoPharm Taiwan, its parent company.

In a long-awaited move, China’s Food & Drug Administration (CFDA) will accept drug approval applications from the country’s drug discovery firms. So far, only drug manufacturers with plants in China have been permitted to hold the marketing rights to new drugs in the country.

CFDA notes that the system that has been in place in China has discouraged innovation in the pharmaceutical sector and has led to an inefficient allocation of resources.

Under a three-year pilot scheme, the agency will accept applications from research firms from 10 provinces and major cities including Shanghai and Beijing. Many in the industry expect that China will not go back to the old system. These changes will not affect foreign drug firms.

“China is the only place where the manufacturer owns the rights to an active pharmaceutical ingredient,” says Kuo-Hsi Cheng, general manager of ScinoPharm (ChangShu) Pharmaceuticals, the China affiliate of ScinoPharm Taiwan, a producer of active pharmaceutical ingredients.

To avoid ceding the rights to their drugs to third parties, some Chinese drug discovery firms have chosen to go into manufacturing. In August, for example, the Chinese oncology drug firm BeiGene said that it would build a biopharmaceutical plant in Suzhou.

China is currently considering other reforms to further encourage R&D. For instance, CFDA is looking at reducing delays in securing permission to initiate clinical trials. Some companies have had to wait as long as five years, Cheng says.


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