China Regulations Tracker: Jan 2021

Writer: Minhua Chu

Editor: Howard Fields

The most important regulation issued in the first month of 2021 is about volume-based procurement (VBP) for drugs. The State Council issued the document, also called “No.2 Document” because it is the second one issued this year by General Office of the State Council of China.

Issuance of the document indicated that the Chinese government has officially normalized and institutionalized the drug VBP.

One of the biggest highlights of the document is that it clarified the VBP scope: drugs that get generic quality consistency evaluation (GQCE) approval are given priority, and the focus is on the drugs on the National Reimbursement Drug List (NRDL), those with heavy use and a high procurement amount. The procurement then gradually covers more drugs considered necessary for clinical use and of reliable quality.

The VBP also includes the drugs that do not get GQCE approval, along with traditional Chinese medicines (TCM) and biological products.

Previously, whether biosimilars would be included in the VBP had been a key concern for companies with innovative drugs, especially those developing antibodies.  Now, the answer is clear. At a State Council policy briefing meeting on Jan. 29, Mr. Chen Jinfu, deputy director of the National Healthcare Security Administration (NHSA), said, There is no doubt that biosimilars will be included in the VBP.

In addition, the competition rules part of the document states, explore putting different generic drugs with similar indications or clinical efficacy into one group for the VBP. Obviously, the clause is for biological products and TCM. It seems that not only the biosimilars with the same generic name are to be included in the VBP, it also is to include those with the same target and/or mechanism, and for which similar indications are likely to be combined to compete in the future.