Understanding China’s Access Environment for Orphan Therapies: Advancing Policies and Diagnosis & Treatment Capacities

In our previous installment, we delved into the distinctive characteristics and commercial challenges surrounding rare diseases, highlighting a comprehensive solution framework encompassing public policy, infrastructure development, and funding is essential to address these complex issues. In Part 2 of our series, we turn our focus to the first two dimensions of this solution framework, i.e., China's progress in rare disease policy development and the establishment of diagnosis and treatment capacities.

Supply-Side Policy Incentives

China's late start in the rare disease field is evident in the insufficient supply of drugs compared to the market demand. According to IQVIA calculations, the 121 rare diseases listed in China's First List of Rare Diseases (CLRD) catalog impact approximately 3 million patients in mainland China, which is a mere fraction of the 20 million patients affected by more than 1400 rare diseases according to “China Rare Disease Definition Report 2021."

Furthermore, despite the impressive output of local innovators, there has been a lack of approval for “home-grown” innovative drugs specifically targeting non-cancer rare diseases over the past five years. This stark contrast highlights the significant lag in developing innovative orphan therapies compared to China's pharmaceutical innovation ecosystem.

To bridge this supply gap and address urgent unmet clinical needs, China has implemented a series of policies to expedite regulatory approvals for rare disease drugs already approved overseas. There have also been reductions in value-added taxes for imported orphan products, and efforts are being made to encourage domestic research and development for rare disease treatments.

Accelerating Regulatory Approval for Imported Orphan Drugs

In 2018, the National Medical Products Administration (NMPA) published the "Announcement on Issues Pertaining to the Review and Approval of Overseas New Drugs Urgently Needed in Clinical Settings," which established a dedicated pathway for the review and approval of foreign new drugs addressing urgent clinical needs in China. Since its implementation, NMPA has issued three batches of the List of Clinically Urgently-Needed Drugs Launched Abroad, leading to the approval of 41 orphan drugs.

In 2019, the Drug Administration Law underwent revisions and introduced several new regulations to encourage the research and development of orphan drugs and expedite their approval and availability in China.

Following these developments, in 2020, the revised "Drug Registration Administrative Measures" clearly stated that innovative drugs and improved new drugs for the prevention and treatment of rare diseases, which have significant clinical value, are included in the priority review and approval process. Furthermore, for rare disease drugs already marketed overseas but not yet available in China and urgently needed in clinical settings, the review must be completed within 70 days.

As a result of these efforts, a total of 56 orphan drugs successfully obtained approval in China between 2018 and November 2022, exceeding the total number of orphan drugs approved in the previous decade.

Reducing Value-Added Taxes for Imported Orphan Drugs

Starting in March 2019, the value-added tax (VAT) for 21 imported orphan drugs and four active pharmaceutical ingredients was reduced from 16% to 3%. Subsequently, in October 2020, the list was expanded to include an additional 14 rare disease drugs, 39 anti-cancer drugs, and six pharmaceutical ingredients. As a recent update, the third batch of the list for both anti-cancer and rare disease drugs was issued in December 2022.

Proposal to Extend Marketing Exclusivity Period for Orphan Drugs

In May 2022, NMPA announced a comprehensive draft amendment to the Implementation Regulation of the PRC Drug Administration Law. For the first time, the draft amendment has introduced a marketing exclusivity period for innovative orphan drugs of up to seven years.

Supply-Side Policy Constraints

Implementing these supply-side policy initiatives has significantly improved the regulatory landscape for orphan products approved overseas and urgently needed in China. However, as we will explore in more detail below, the absence of a clear definition for rare diseases continues to impede domestic research and development efforts in the field of orphan therapies.

Additionally, to further strengthen these supply-side policies, it is essential to complement them with demand-side incentives that ensure sufficient market returns for orphan drug manufacturers. As we will delve into in part 3 of our newsletter series, given the limitation of basic medical insurance funds, building a multi-layered financing ecosystem will be key to securing patient access and incentivizing continued investment in the research and development of rare disease therapies.

China’s First List of Rare Diseases

The introduction of China's First List of Rare Diseases in 2018 marked a significant milestone in the country’s efforts to establish a comprehensive national rare disease system. Comprising 121 rare diseases, this catalog has played a pivotal role in guiding various aspects of rare disease management in China.

As a "working definition" of rare diseases in China, the list has had a substantial impact on policy priorities and has contributed to significant advancements in key areas. These include expediting regulatory approvals, enhancing diagnostic and treatment capabilities, and shaping coverage and reimbursement policies within China's basic medical insurance, provincial critical illness insurance/rare disease funds, and city commercial health insurance.

However, relying solely on a disease catalog as a substitute for a formal definition of rare diseases restricts access to therapies for rare diseases not included in the catalog. It's important to note that CLRD currently covers only a fraction of the 20 million rare disease patients in China.

Furthermore, as previously mentioned, China, being a newcomer in the field of rare diseases, has adopted a policy orientation that prioritizes disease areas with high burdens and existing treatments. This priority is evident in the inclusion criteria for the CLRD catalog, which emphasize the presence of "clear diagnostic methods" and "economically affordable treatment or intervention measures" or inclusion in national research projects for diseases lacking effective treatments. These inclusion criteria favor diseases with "existing" or "developing" treatments, potentially discouraging research and development efforts for a significant percentage of rare diseases that currently lack therapeutic solutions.

Additionally, it is worth noting that oncology and infectious diseases are not included in the CLRD.

Advancing Rare Disease Diagnosis and Treatment Capacities

Background on China’s Healthcare Delivery System

The healthcare delivery infrastructure of a country plays a critical role in developing diagnostic and treatment capabilities. In China, income disparities across different regions have led to significant variations in the provision of treatments, the quality of care, and the availability of qualified healthcare professionals throughout the country.

A recent study focused on the quality of primary healthcare in China highlighted that the diagnosis and treatment outcomes for common illnesses such as dysentery, angina, and pulmonary tuberculosis were notably poorer in village and township health centers compared to county hospitals in Western China. Another study investigating the diagnosis and treatment journey of adult Chinese rare disease patients found that approximately 72.97% experienced misdiagnosis, enduring an average wait of 4.30 years and visiting 2.97 hospitals before receiving an accurate diagnosis.

While the government has increased funding and implemented various policies to establish a coordinated and integrated health system centered around primary care, the inadequate compensation of physicians remains a challenge in attracting and retaining qualified healthcare professionals within the primary care system. For example, in 2017, only about 10% of doctors working in China's township health centers had received a formal medical education consisting of five years of medical school.

Given the limited capacity of China's primary healthcare institutions, significant regional disparities in local healthcare delivery systems, and the dispersed rare disease patient population, innovative approaches, and China-specific strategies will be necessary to construct effective referral pathways and accurately identify rare disease patients.

The National Network to Collaborate on Diagnosis and Treatment of Rare Diseases (NCDTRD)

Following the introduction of China's First List of Rare Diseases, the National Network to Collaborate on Diagnosis and Treatment of Rare Diseases was established in February 2019. The primary purpose of this network is to provide a practical mechanism and supportive infrastructure for identifying, diagnosing, and treating rare disease patients.

The NCDTRD consists of 324 hospitals nationwide, carefully selected based on their expertise and experience managing patients with rare diseases. Among these hospitals, one is a leading national institution (Peking Union Medical College Hospital), and 32 are leading provincial institutions.

The key objectives of the NCDTRD include establishing a network for diagnosing and treating rare diseases, creating a comprehensive mechanism for coordination, designating specific hospitals as referral centers within the tiered healthcare system, promoting early detection and diagnosis, and implementing fair and consistent approaches to treating and managing rare diseases.

Specifically, the NCDTRD fulfills six primary functions:

• Coordinated care: The network facilitates timely transfers of complex cases between hospitals and ensures the appropriate allocation of necessary medical resources.
• Development of clinical practice guidelines and referral pathways: An online multidisciplinary team collaborates with primary institutions to bridge the gap in medical knowledge. Member hospitals are responsible for training their medical staff on clinical guidelines to enhance their capacity for diagnosing and treating rare diseases.
• Strengthening quality control: Provincial health authorities oversee the management and evaluation of member hospitals, focusing on safety and multidisciplinary care for rare disease patients.
• Ensuring sufficient orphan drug supplies: Member hospitals are required to include drugs for treating rare diseases in their hospital formularies promptly and monitor the drug supply to meet clinical demand.
• Information Collection. All member hospitals must input data on all rare disease cases into the China Rare Disease Diagnosis and Treatment Service Information System, established in concert with the network.
• Support for translational and clinical research while encouraging international exchange and cooperation.

Establishing such an extensive collaborative network in a country with an evolving healthcare delivery infrastructure is a remarkable challenge. However, progress has been made.

Four years after the establishment of NCDTRD, a study assessed patient access to 79 orphan drugs for diseases covered under the China National Rare Disease List. The study revealed improved availability of these drugs in networked institutions. Specifically, the percentage of surveyed drugs obtainable at the top 30 provincial institutions of the NCDTRD increased by 1.5 times to 41.1% in 2020 compared to the situation in 2017 before the collaborative network was established.

Nevertheless, challenges persist. The same study found seven of the surveyed drugs were unavailable in any of the 30 network institutions, and five of these drugs had been approved for use five years before 2020. Additionally, drugs for "endocrine, nutritional, and metabolic diseases" and "diseases of the nervous system," the two categories with the highest number of approved orphan treatments in China, had the lowest availability in the surveyed hospitals. This indicates a significant delay in accessing orphan drugs at the hospital level.

China’s First Guide for the Diagnosis and Treatment of Rare Diseases

China's First Guide for the Diagnosis and Treatment of Rare Diseases was released in conjunction with establishing the NCDTRD in February 2019. This guide is a comprehensive resource that encompasses definitions of the 121 rare diseases listed in the CLRD catalog, along with information about their causes and recommended diagnosis and treatment procedures.

Considering the limited capacity of China's primary healthcare system, significant disparities in treatment patterns, and varying quality of care across different regions, these guidelines play a vital role in standardizing clinical practices. They also serve as essential training tools for member hospitals within the NCDTRD network, aiming to enhance overall awareness and improve the quality of care for rare diseases.

China's National Rare Disease Registry

The establishment of the National Rare Diseases Registry System of China (NRDRS) in 2016 by Peking Union Medical College Hospital is a vital component of China's rare disease infrastructure to bring together the leading centers of excellence for rare diseases.

The initial phase of registry development has primarily focused on nationwide standardized data collection of rare disease cases. To date, the online registry has accumulated data from 68,137 cases, contributed by 101 collaborating hospitals across 29 regions. This comprehensive dataset covers 188 cohorts and 171 rare diseases.

An interesting finding from the analysis of regional distribution within the NRDRS is that 60% of the cases originated from the more developed and affluent regions in East and North China. This indicates that the local availability of quality care and patients’ financial status significantly influence access to orphan therapies.

The upcoming phase of NRDRS involves supporting clinical research and trials. The registry will prove invaluable for studying the natural history and epidemiology of covered diseases in China and conducting high-quality local trials utilizing the detailed clinical diagnosis and treatment data collected by NRDRS.

This data collection capability will not only strengthen China's domestic research and development efforts in the field of rare diseases but also assist manufacturers in better prioritizing investments in this area. Additionally, it will contribute to building a stronger case for demonstrating the value of products and securing reimbursement.

In the next article, we will focus on China's current financing ecosystem for orphan products.

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