On July 27, in an effort to reinforce the management and use of pharmaceutical products in many fields, the National Healthcare Commission (NHC) issued the Notice on Further Strengthening Medication Safety Management and Improving the Level of Rational Medication. This notice put special emphasis on pediatric and oncology drugs.
This notice proposed the removal of two limits imposed by the Prescription Management Measures including – 1. the total number of drug specifications hospitals can buy, and 2. the two-specifications-for-one-variety rule. Specifically, according to these measures, hospitals are only allowed to purchase two specifications of a drug under one generic name. Top-tier hospitals are also only allowed to carry fewer than 1,500 drug specifications if they do not want their performance evaluation to be negatively affected. Up until now, if hospitals bought drugs with specifications for pediatric use, this would take up a significant portion of their quota – thus making hospitals more hesitant to buy pediatric drugs.
As a result of these two restrictions, both domestic and foreign drug manufacturers are not incentivized to invest in the R&D of pediatric drugs, which has led to the current insufficient supply of pediatric drugs in China. If the two restrictions above are lifted, there will be more incentives for drug companies to develop and commercialize pediatric drugs.
In addition, the notice also highlights oncology drugs as an important objective. According to this notice, more R&D resources should be invested in developing cancer drugs. In March this year, China implemented its first off-label drug use law, which enabled physicians to prescribe drugs for indications that are not listed on the package insert, but have been backed by scientific evidence. The introduction of off-label usage of cancer drugs means there are more opportunities for drug makers as their drugs can now be used by a larger number of Chinese patients.