JAPAN: NEW GLP UPDATES
In accordance with the new Pharmaceutical Affairs Law (PAL), which went into effect on April 1, 2005, the Ministry of Health, Labor, and Welfare (MHLW) issued an update on Good Laboratory Practice (GLP) in Notification 0331030. This notification clarifies that GLP is applied to non-clinical laboratory studies that determine the safety of medical devices. These studies are limited to the collection and preparation of data concerning biological safety that are performed by using test systems at testing facilities. GLP does not cover quality assurance or sterilization validation studies.

The new GLP clearly outlines the responsibilities of the test facility and necessary personnel. The test facility must first designate the necessary personnel, including the study director and Quality Assurance (QA) director, before beginning the study. In addition, the test facility develops standard operating procedures (SOPs), approves the study protocol, and maintains all study records. The study director must develop the study protocol, ensure that the study is conducted in accordance with the protocol and SOPs, and submit all final reports. The QA manager maintains all of the records for each test conducted at the test facility, and confirms that the information has been generated in accordance with GLP. The QA manager also advises the test facility and study director on quality issues. Finally, it is important that the medical company sponsoring the test be aware that it is responsible for informing the test facility, study director, and QA manager of any updates on GLP compliance.

The new GLP also clarifies the definitions for test articles and control articles. Test articles are defined as any medical devices, raw materials (including chemical or biological substances), extracts, or any product subject to a safety assessment. Control articles refer to any medical devices, raw materials (including chemical or biological substances), extracts, or any product that will be tested in comparison to the test article.

Since the definition of test and control articles in Japan includes extracts, it is desirable for stability studies to also be conducted on any extracts. However, it is generally difficult for the testing facility to conduct this stability study. Therefore, the new GLP states that a stability study on extracts should be conducted only if performing this test is feasible. In contrast, according to U.S. GLP requirements, extracts are not included in the definition of test and control articles. This is one example of how Japanese GLP requirements are actually more detailed than U.S. GLP requirements.

KOREA: MULTINATIONAL DEVICE CLINICAL TRIAL APPROVED
The Korea Food and Drug Administration (KFDA) recently approved the first multinational clinical trial for a medical device. The device, the Nobori drug-eluting stent, is manufactured by the Terumo Corporation, an international medical device company headquartered in Tokyo, Japan. The trial involves 360 study subjects from thirty testing centers located in Europe, Australia, and Asia. Until now, the KFDA had only approved multinational clinical trials for drugs.

The KFDA has been proactively encouraging multinational clinical trials in Korea, and over the last five years, multinational trials (for drugs) have increased dramatically as a result. For example, in 2000, only 5 multinational drug clinical trials were approved by the KFDA, compared to 28 local trials. In 2002, there were 17 multinational drug clinical trials and 38 local trials. However, by 2005, the number of multinational trials surpassed the number of local trials; the KFDA approved 95 multinational drug clinical trials, whereas it approved only 90 local clinical trials. Now that the KFDA has approved the first clinical trial for a medical device, it hopes that the number of multinational clinical studies will continue to increase—for both drugs and devices.

The KFDA hopes that increasing the number of multinational trials will enhance the quality of domestic clinical studies through the introduction of new foreign drug and device technologies. In addition, more multinational trials in Korea will help to develop local expertise in conducting studies that meet international standards. The KFDA hopes that this will demonstrate that Korea’s drug and device industries have reached quality standards similar to those in other advanced countries. In addition, the Korean medical community hopes that this will attract more foreign medical companies to invest in Korea and further develop its medical sector.

INDIA: NEW PHARMACEUTICALS POLICY PROPOSES PRICE CONTROLS
India’s Department of Chemicals and Fertilizers, the administrative ministry for the pharmaceutical industry, recently released a draft of the National Pharmaceuticals Policy 2006. The draft was presented at the first meeting of the Pharmaceutical Advisory Forum on February 11, 2006. The draft Pharmaceuticals Policy focuses mainly on price control issues, but also includes discussion of other new key policy initiatives such as the promotion of generic drugs, as well as ways to strengthen the drug regulatory system.

In order to make drugs more affordable, the Indian government will heighten its monitoring of drug price increases. Currently, the National Pharmaceutical Pricing Authority (NPPA) requires pharmaceutical companies to provide explanations for price increases exceeding 20 percent in one year. Part B of the Pharmaceuticals Policy proposes to establish a pricing policy that would regulate the wholesale and retail prices of branded and generic drugs that are not currently covered under cost-based price control. The current trade margins for price controlled drugs would remain at 8 percent for wholesale and 16 percent for retail. Margins for branded drugs not under cost-based price control would be set at 10 percent (wholesale) and 20 percent (retail). Margins for generic drugs not under price control would be capped at 15 percent (wholesale) and 35 percent (retail).

In addition, the Pharmaceuticals Policy seeks to promote generic drugs and to strengthen the regulatory system. Generic drugs, in some instances, will be eligible for certain incentives such as exemption from price controls and preferential treatment for government purchases. Currently, the majority of the government’s purchases consists of generic drugs but the draft emphasizes that generic drugs should only be selected from pre-approved manufacturers. The central drug authority will have the sole power to approve brands. Foreign drug companies may also encounter difficulties, since the draft policy also proposes that patented drugs will be approved only after price negotiations with the Indian government.

To strengthen India’s regulatory regime, it was suggested that medical devices and dietary supplements be included in the Drug and Cosmetic Act. This would ensure that these products’ quality and prices are monitored on a regular basis.

More updates on the Pharmaceutical Policy are expected to be released in the upcoming months. The next meeting of the Pharmaceutical Advisory Forum is scheduled to take place in May 2006.

PHARMACEUTICAL COMPANIES INVESTING IN R&D TO FACILITATE ENTRY INTO CHINA’S MEDICAL MARKET
Pharmaceutical companies are increasingly making R&D investments in China to facilitate entry into the Chinese drug market. China is already a hot destination for outsourcing manufacturing and clinical research, which offers companies significant cost savings. However, large pharmaceutical companies have begun to realize that developing R&D centers in China may, over the long term, provide them with invaluable inroads into China’s burgeoning pharmaceutical industry. China’s pharmaceutical market is estimated to surpass $25 billion by 2010, the fifth-largest in the world.

In addition to cost savings, outsourcing R&D in China can give pharmaceutical companies increased presence in the China pharmaceutical market, which will in turn help foreign companies begin making valuable business and government contacts. Locating R&D in China also enables companies to be better able to cater to different product preferences or changes in the Chinese market. China also has many talented scientists, chemists, and engineers that can perform research at lower cost than their American counterparts. A typical all-in cost for a chemist in China is about one-tenth of the cost in the U.S.

It is also a good time to invest in R&D in China because the Chinese government is encouraging high-tech R&D, offering many incentives such as tax breaks to foreign companies engaging in these activities. Obviously, there are some risks involved in outsourcing R&D, the most prominent of which is intellectual property (IP) protection. Although in the past the Chinese government has been lax in the enforcement of IP rights, it has made significant improvements since its accession to the WTO. The potential for generating revenues from sales in China’s large pharmaceutical market is also significant enough for many companies to continue making R&D investments in China.