Localization: China

Localization

30/08/2021

Fangda Partners / China

Want to know more about localization in China? Prepared in association with Fangda Partners, one of China’s most prestigious and well-regarded law firms. This is an extract from The Pharma Legal Handbook: China, which can be purchased here for GBP 99.

1. Are there any rules or regulations requiring and/or encouraging localization in your country? What is the legal framework defining these localization rules and policies?

Yes. The key regulations are the Pharmaceutical Administration Law (药品管理法) and the Regulations for the Implementation of the Drug Administration Law (药品管理法实施条例). There are several announcements or decisions regarding the tariffs and authorization of imported drugs such as the Decision of the NMPA on Matters concerning the Adjustment of the Registration Administration of Imported Drugs (国家食品药品监督管理总局关于调整进口药品注册管理有关事项的决定) (hereinafter referred to as the “Decision”) and the Announcement of the Customs Tariff Commission of the State Council on Reducing the Import Tariffs on Drugs (国务院关税税则委员会关于降低药品进口关税的公告) (hereinafter referred to as the “Tariff Announcement”).

2. Have there been any recent significant changes involving localization rules? If yes, when did they take place and what did they involve?

The NMPA has taken an open attitude towards localization and is encouraging the importation of drugs by simplifying clinical trial requirements and lowering tariffs.

3. Is the process of obtaining a marketing authorization impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

Yes. According to the Decision, there are following simplified requirements:

with respect to a foreign new chemical drug or a foreign innovative biological drug for therapeutic use on which an application for the clinical trial or an application for the market authorization has been filed, the requirements for obtaining the market authorization of the country or region of production at the place where the overseas pharmaceutical production business is located shall be canceled.
where a registration application has been accepted before the issuance of this Decision and the clinical trial requirement of imported drugs is exempted based on the international multi-center clinical trial data, if the requirements of the Measures for the Administration Measures for Drug Registration (药品注册管理办法) and relevant regulations are complied with, the import of the drugs may be directly approved.

4. Is the pricing process for pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

N/A

5. Is the reimbursement of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

Yes. In recent years, more and more imported drugs have been included in the Drug Catalogue (defined in Question 7 of Chapter: Orphan Drugs and Rare Diseases).

6. Is the access to public or public tenders of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?

Yes, given that more imported drugs have been included in the Drug Catalogue, more citizens can afford imported drugs.

7. Are import tariffs, importation and/or exportation permits, trade and/or taxation of pharmaceutical products impacted by localization policies in your country ? If yes, how so?

Yes. For the purposes of reducing the burden of drug expenses on patients, especially cancer patients, and offering them more medication options, since May 1, 2018, the import tariffs on all common medications including anti-cancer drugs, alkaloid drugs with anti-cancer effects, and imported traditional Chinese medicines shall be cancelled, according to the Tariff Announcement.