To Jointly Create an Ecosystem for Value-based Medicines · 2016-05-23 · • IMCT data will be accepted to support filing • Pilot MAH scheme • Bio-equivalent testing changed

China Chamber of Commerce for Import & Export of Medicines and Health Products

To Jointly Create an Ecosystem for Value-based Medicines

Xu Ming PhD

Vice President, China Chamber of Commerce for Import & Export ofMedicines & Health Products


Outline

3. To play a more active part as a major supplier----What can China contribute?

2. To create an ecosystem for more value-based medicines

1. To explore the nature of medicines



A public good is a good that is both non-excludable and non-rivalrous in that individuals cannot be effectively excludedfrom use and where use by one individual does not reduceavailability to others.

The consumption of it by one individual does not actually orpotentially reduce the amount available to be consumed byanother individual. It also can be described as somethingthat is useful for the entire population.

Many public goods may at times be subject to excessive useresulting in negative externalities affecting all users.

Are medicines public or private goods?


Public goods may also become subject to restrictions onaccess and may then be considered to be club goods,exclusion mechanisms include copyright, patents, etc.

Club goods are sometimes classified as a subtype of publicgoods that are excludable but non-rivalrous.

James M. Buchanan developed club theory in economics inhis 1965 paper, "An Economic Theory of Clubs". He wrotethat there was an "awesome Samuelson gap between thepurely private and purely public good ".


Are medicines public or private goods?



Pareto efficiency, is a state of allocation of resources in whichit is impossible to make any one individual better off withoutmaking at least one individual worse off.

Can we achieve Pareto efficiency?



The result only holds under the restrictive assumptionsnecessary for the proof: (In the absence of perfectinformation or complete markets, outcomes will genericallybe Pareto inefficient).

Can we achieve Pareto efficiency?

markets exist for all possible goods so there are no externalities;

all markets are in full equilibrium;

markets are perfectly competitive;

transaction costs are negligible;

market participants have perfect information.



Foregone conclusions

A: There is always Pareto improvement in the use of medicines which bear the bear the characteristics of club goods even under a presumed sound healthcare healthcare system.

B: The final "solution" will be normally located at any one of the sub-infinity points sub-infinity points on the Pareto welfare surface short of actually maximizing the maximizing the benefit of all stakeholders.

C: Both invisible hand and visible hand must be used towards the goal to strike a proper goal to strike a proper balance between fairness and efficiency.


Preface

Ecosystem in the Healthcare Sector


patientspatients

governmentgovernment

hospitalshospitals other medical institutions

other medical institutions

healthcare &regulatory

systems

healthcare &regulatory

systemsmedicinesmedicines equipmentequipment diagnosisdiagnosis othersothers

pharma companies

medical device&

Eqipmentcompanies

bio companies CROs

capitalcapital

universities & academic institutions

universities & academic institutions

R&D, production alliance

Products& related services

public & privatepublic & private

Medical treatment



3 major features of the pharmaceutical industry

innovation driven

quality assured

highly regulated


• Evidence-based medicine (EBM) – quantitative patient clinical data solely in treatment setting(not total patient value or societal benefit);

• Value-based medicine (VBM) – quantitative patient clinical data + additional value parameters =quantitated total value and pharmacoeconomic benefit from a patient and societal perspective.

Source: Oncology drug development and value-based medicine, Quintiles


The evolution from evidence-based to value based


Source: Oncology drug development and value-based medicine, Quintiles

The evolving drivers for assessing the “value”of a drug





Innovation of medicines

Access to innovative medicines

be kept?

Can




The development of value -based medicines requires a closer and earlier convergence of all relevant plannings.

Clinical

Societal

Regulatory

Commercial



How different alternatives or priorities should be ranked?

How an appraisal system of medicines or other mechanisms can be devised to maximize the benefits of relevant stakeholders?

How a concerted effort can be made to keep the ecosystem for value-based medicines functioning?


Overview of China’s healthcare industry

187 219 252306 345

442526

654

843

1038

1256

1570

1815

2059

2332

2563

23 26 30 37 4255

67

90

123

152

190

243

288

332

380

411

0

100

200

300

400

500

0

500

1000

1500

2000

2500

3000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Health Care Industrial Output Value（Bn RMB）

Health Care Industrial Output Value（Bn USD）

*Source: MIIT

3. To play a more active part as a major supplier ----What can China contribute?

Around 6,500 pharmaceutical manufacturing companies.

Able to produce 1,500 kinds of APIs and has the biggest production capacity of formulations.


Principles guiding the policies of the Chinese government towards the healthcare industry


• Advancement of technology and upgrading of products;

• Increase of the consolidation rate;

• Policies to encourage the development of international trade and investment;


Prospects of the development of China’s healthcare Industry under the 13th Five-Year Plan


Industrial output 10% Annual Growth Rate

Industrial output 10% Annual Growth Rate

Industrial output 2016 as starting point

￥ 2,900billion / $440billion

Industrial output 2016 as starting point

￥ 2,900billion / $440billion

GOAL


Experience in China’s drug regulation


• New GMP revised based on WHO & EU standard adopted in 2011.

• New GSP adopted in 2013 to achieve all supply chain compliance.

• Drug equivalence evaluation is being implemented.• Drug Administration Law of China is being revised to be more

aligned with international regulatory standards:- Introduction of MAH

- Speeding up of approval drugs and encouragement of IMCT- Introduction of data exclusivity, possibility to join the PIC/S,

ICH, etc.


1

3

4

5

6

7

2

1. Financial support

2. Product marketing

3. Government procurement

4. Registration reform

5. Human resources

Technology innovation

Quality improvement

Upgrading of products

Modern distribution

International cooperation

Further the Healthcare reform

New industrial format

6. Cooperative supervision

Policy support Key targets

Guidance to promote the healthy development of China’s Healthcare Industry


*released by the State Council on 4th March 2016


• Self-audit by applicants

• CROs inspection

①Improve quality of

review and approval process

⑤Increase

transparency of review and

approval process

④Encourage innovation

③Improve quality of generics

②Eliminate

review backlog

Application timeline

Innovator drug application requirement

Generics applicationReduce

nonqualified applications

• Eliminate all backlog by 2016

• Achieve review time target set out in regulation by 2018

• Dedicated innovation drugs review channel

• IMCT data will be accepted to support filing

• Pilot MAH scheme

• Bio-equivalent testing changed from application to notification

• Potentially unified application process

• Enforce originator as reference

5 pillars of reform review and approval

system for drugs and medical devices

Targeted Results



Implications of the policy changes

Internationalized registration and approval

Shortened application timeline

China’s more involvement in IMCT

Internationalized drug manufacturing

Innovation by Chinese companies

Transparent innovation drug application



3.An internationalized player, going global strategy of the Chinese companies

Rapid growth of the international trade in China’s healthcare industry

4.6 5.2 6.7 8.3 9.8

10.9 13.9

16.7 18.7

20.5

28.8

33.4

38.8

43.1

46.2

5.8 7.5

9.4 11.8

15.3

19.2

24.4

31.7 32.0

39.7

44.5

47.9

51.2

55.0 56.4

0

10

20

30

40

50

60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Import(USbn)

Export(Usbn)



3. To play a more active part as a major supplier ----What can China contribute?Imp.&Exp.of Pharmaceuticals between China& EU in 2015

（source: China Customs unit：100 m US dollars，%）

Category

Import and Export Import Export

SurplusYear-on-

year（%）Volume

Year-on-year（%）

Percentage Volume

Year-on-year（%）

Percentage Volume

Year-on-year（%）

Percentage

Pharmaceuticals 235.84 5.89 67.88 161.20 9.30 72.97 74.64 -0.80 58.99 -86.55 -19.82 APIs 96.71 1.21 27.83 32.51 6.45 14.72 64.20 -1.25 50.73 31.69 -8.07 Amino acids and derivatives 6.80 2.64 1.96 3.35 12.51 1.52 3.45 -5.40 2.73 0.11 -84.22 Aminoglycosides 0.35 2.11 0.10 <0.01 41.46 0.00 0.35 2.11 0.28 0.35 2.11 Macrolides antibiotics 0.50 28.22 0.15 <0.01 -29.16 0.00 0.50 29.02 0.40 0.50 29.84 APIs for Respiratory Diseases 0.01 9.45 0.00 <0.01 - 0.00 0.01 9.38 0.01 0.01 9.32 Sulfonamides 0.14 26.82 0.04 <0.01 -25.67 0.00 0.14 26.84 0.11 0.14 26.86 Steroids 2.89 -8.42 0.83 0.28 67.39 0.13 2.61 -12.62 2.06 2.33 -17.32 Antipyretic Analgesics 0.78 -20.98 0.22 0.01 -1.96 0.00 0.77 -21.13 0.61 0.76 -21.28 Lincomycin 0.56 -3.08 0.16 0.00 - 0.00 0.56 -3.08 0.45 0.56 -3.08 Chloramphenicols 0.33 15.35 0.09 <0.01 - 0.00 0.33 15.35 0.26 0.33 15.34 Narcotic APIs 0.07 -16.24 0.02 0.04 -16.52 0.02 0.04 -15.96 0.03 <0.01 -1.46 Other Anti-infectives 2.85 -37.79 0.82 0.61 -70.59 0.28 2.24 -10.34 1.77 1.62 299.67 Other APIs 63.29 -3.90 18.22 20.88 -12.58 9.45 42.42 1.03 33.52 21.54 19.01 Penicillins 1.61 0.76 0.46 <0.01 -99.06 0.00 1.61 1.12 1.27 1.61 1.49 Tetracyclines 1.40 -11.45 0.40 0.07 144.36 0.03 1.33 -14.29 1.05 1.26 -17.23 Cephalosporins 0.83 -2.66 0.24 0.42 -11.96 0.19 0.41 9.39 0.32 -0.02 83.95 Vitamins 7.25 -7.68 2.09 0.49 -22.81 0.22 6.76 -6.34 5.34 6.27 -4.75 APIs for Digestive system 0.1 -14.79 0.03 0.05 -17.82 0.02 0.05 -11.28 0.04 <0.01 59.65 APIs for Cardiovascular system 6.35 4281.28 1.83 6.3 4247.93 2.85 0.05 - 0.04 -6.25 -4214.59 APIs for CNS 0.58 56.99 0.17 <0.01 34.70 0 0.57 57.14 0.45 0.57 57.29

Formulations 100.84 9.19 29.02 95.57 8.66 43.26 5.27 19.76 4.17 -90.3 -8.07 Hormones 22.08 31.86 6.35 20.79 28.42 9.41 1.29 131.71 1.02 -19.49 -24.73 Other Anti-infectives 5.46 4.31 1.57 4.56 -0.21 2.06 0.9 35.54 0.71 -3.67 6.25 Other Formulations 69.93 6.21 20.13 67.43 6.49 30.52 2.5 -0.77 1.97 -64.94 -6.79 Penicillins 0.24 -66.16 0.07 0.12 -78.00 0.05 0.12 -24.85 0.09 <0.01 99.36 Cephalosporins 1.53 -24.36 0.44 1.19 -28.14 0.54 0.34 -6.99 0.27 -0.86 34.03 Vitamins 1.61 -11.30 0.46 1.48 -11.35 0.67 0.13 -10.69 0.1 -1.34 11.42

Bio-chemical drugs 38.29 9.98 11.02 33.12 14.26 14.99 5.17 -11.28 4.09 -27.94 -20.69 Enzymes and Coenzymes 2.48 14.74 0.71 1.59 8.95 0.72 0.88 26.90 0.7 -0.71 7.33 Others 35.81 9.67 10.31 31.52 14.54 14.27 4.29 -16.46 3.39 -27.23 -21.65


International Registration

CEPs （China VS India）

DMFs （China VS India）• 1500+DMFs；• 560+ valid CEP；• WHO PQ:

28APIs, 16FPPs, 3 Vaccines

• 40+ ANDA；• 50+GMPs of

USA, EU, Japan and WHO.



Case study


China Chamber of Commerce for Import & Export of Medicines and Health Products来源：BioSpectrum,2015.9


Year Registered clinical trial worldwide

2000 5635

2001 6984

2002 8573

2003 10237

2004 12024

2005 24931

2006 35862

2007 49260

2008 66280

2009 83436

2010 101172

2011 119402

2012 139042

2013 159488

2014 182773

2015.8 196811

CountryRegistered clinical trial

（as of the end of August 2015）

China 6501

Korea 6483

Chinese Taiwan 4062

Hong Kong 1010

India 2688

Pakistan 310

Bangladesh 202

Cambodia 57

Indonesia 277

Malaysia 780

The Philippines 747

Singapore 1485

Thailand 1760

Australia 4801

New Zealand 1253


In 2014，China’s CRO market amounted to 3.9 billion USD with annual growth rate of 25%。As of April in 2014, there are

550 clinical trial institutes in China.



Determining factors for the process of internationalization

R&D Alliances

Internationalresources

Marketing tactics

Reductionof cost

Legal preparation

Compliance

Global strategy



International Registration


If everyone is moving forward together,then success takes care of itself.

---- Henry Ford


Thank You !

Contact Details:

Dr. Xu MingAdd: 11-12 F, Beijing INN

NO.3, Nanzhuganhutong,Chaoyangmennei St. Dongcheng Dis. , Beijing, China

Tel:0086-10-58036220E-mail: [email protected]

Documents

To Jointly Create an Ecosystem for Value-based Medicines · 2016-05-23 · • IMCT data will be accepted to support filing • Pilot MAH scheme • Bio-equivalent testing changed