Small step in drug approval heralds big changes afoot

Almost everyone notices the big changes that visibly alter lifestyles－like the launch of the first smartphones, or the World Wide Web－but almost nobody notices the small, incremental developments that make those big changes possible.

One of those little-noticed changes happened in the last week of December, in China's pharmaceutical industry. Hidden behind news of ongoing trade negotiations and the latest economic data was an announcement that a little-known drug used to treat anemia in dialysis patients had received a marketing green light in China.

Of most significance was not the "what"－a first marketing approval for a new drug－but the "where": In China.

For the first time ever, a pair of international companies applied to market a new and innovative drug in China, before anywhere else. The traditional approach is for companies to apply for approval from one of a handful of regulators in developed markets, such as the United States or Canada, Europe, Japan or Australia. The information gathered for clinical trials in those markets is then used to develop trials or apply for approval elsewhere.

The need for new trials and the fact that the drug approval process was often repetitive meant it has traditionally taken much longer to get the newest and most innovative drugs to Chinese patients than to those in other markets.

In December, however, global pharmaceutical companies Fibro-Gen and AstraZeneca got a green light from China's National Medical Products Administration to market roxadustat in China. The two companies applied for approval in China first. And the approval means Chinese patients should have access to the drug before patients elsewhere.

This is a significant development.

Roxadustat is the first break in the dam. Other companies and more drugs are certain to follow the same route, particularly considering the size of China's pharmaceutical market and its importance to the global pharma industry.

The always present but ever elusive goal for pharma companies is to develop a blockbuster drug. For companies that strike it rich, so to speak, and manage to develop a blockbuster drug, the payout can be huge.

It costs, on average, about a billion US dollars to develop a new drug. But also, on average, only about one in 10 new drugs that companies start working on ever make it to market. That means that it costs about $10 billion in total research and development spending to get a new drug to market.

It is now entirely possible for a drug to become a blockbuster through China sales alone.

And, as the December approval of roxadustat shows, it is getting easier to bring drugs to the Chinese market or even to use the Chinese market as the launchpad into the global market.

The National Medical Products Administration, which took over the mantle from the China Food and Drug Administration last year, has quickly moved to introduce changes to speed up drug approvals.

The largest pharma companies have long looked to China for growth. It is impossible to find an international company without a research center or distribution strategy for the Chinese market. Virtually all companies want to get into China but have been unwilling to pay the high cost of entry or endure long waiting times, and change is underway on both counts.

Few outside the industry have noticed the changes. They are, after all, quite technical and nuanced. And yet they may be the biggest thing to happen to the global pharmaceutical and healthcare industry in decades. The December approval is the latest sign of big changes afoot.

The author is managing director at Bahati Ltd, a media and editorial services consultancy in Hong Kong. The views do not necessarily reflect those of China Daily.