Health & Beauty

Recently, the "Regulations for the Implementation of the Drug Administration Law of the People's Republic of China (Draft for Comments)" (hereinafter referred to as the "Draft for Comments") issued by the State Food and Drug Administration completed the solicitation of comments. The "Draft for Comments" released this time has strengthened the supervision of drug online sales in a targeted manner, and the "third-party platform provider shall not directly participate in drug online sales activities" mentioned in it has attracted widespread attention in the industry.

Whether the platform can sell drugs attracts heated discussions

In recent years, under the influence of national policies and the new crown pneumonia epidemic, the "Internet + medical and health" industry has ushered in explosive growth, and the online drug sales market has also pressed the "accelerator button". Some research institutions estimate that the scale of China's pharmaceutical e-commerce market will reach 226 billion yuan in 2021, and the market may reach 1.2 trillion yuan by 2030.

During this process, the scale of the pharmaceutical retail market of third-party platforms continues to expand, and it is imperative to clarify relevant management obligations. To this end, the "Draft for Comments" specifically makes the following provisions: "Providers of third-party platforms for online drug transactions shall file with the drug regulatory department of the people's government of the province, autonomous region, and municipality directly under the Central Government where they are located"; "Providers of third-party platforms shall establish online drug sales Quality management system, set up special institutions, and staff with pharmacy technicians and other related professionals”, etc.

It is worth noting that the provision in the "Draft for Comments" that "third-party platform providers shall not directly participate in online drug sales activities" has sparked heated discussions: "Can third-party platforms sell drugs?" "Can't online platforms sell drugs? "For a while, various speculations and discussions were raised on the Internet, and even the stock prices of online sales platform companies were affected.

Since the development of pharmaceutical e-commerce, it has occupied an important position in the pharmaceutical retail market. In 2021, online drug sales have exceeded the 200 billion yuan mark, and pharmaceutical e-commerce has become the fourth largest retail terminal; among them, the scale of self-operated business income of large pharmaceutical e-commerce companies has reached 10 billion yuan. At the same time, pharmaceutical e-commerce has brought a lot of convenience for residents to purchase medicines. Relying on the "self-operated + platform" model, residents can purchase medicines based on dimensions such as drug prices and delivery timeliness.

For this reason, the industry generally believes that most of the current pharmaceutical e-commerce is a "self-operated + third-party platform" model. The implementation of the new policy will have a significant impact on this sales model, and will also cause many challenges and uncertainties in the relevant market supervision and law enforcement work. . But at the same time, the "Draft for Comments" also clarifies the principle that pharmaceutical e-commerce needs to distinguish itself as a platform operator and as an online drug seller. This means that pharmaceutical e-commerce companies are either purely a third-party platform, or they can concentrate on self-operated drug business.

"Actually, the policy direction of the draft is very obvious, that is, a third-party online drug sales platform cannot be both an athlete and a referee. However, we cannot simply understand that such a regulation means that Internet platforms are not allowed to sell drugs." Zhongnan Qi Jiangang, a professor at the University of Economics and Law, said.

According to Qi Jiangang's analysis, my country's pharmaceutical e-commerce currently has two mainstream businesses: self-operated and platform business. Self-operated business refers to selling medicines, health products and health consumer goods through self-operated supply chain system; platform business refers to building an online sales platform, using the advantages of traffic entrance to attract merchants to settle in, and charging commissions through services such as technology and operation. The self-operated business of pharmaceutical e-commerce is essentially the online sales of pharmaceuticals by pharmaceutical companies, which is in line with the "Draft for Comments". It's just that this kind of self-operated business is a "own pharmacy" entering the "own platform" to sell drugs. Does this belong to the platform's "direct" participation in online drug sales? This requires further interpretation by the relevant functional departments and the specific operating rules of the market supervision department.

Inclusive and prudent in supervision

The "Draft for Comment" strengthens the supervision of the whole process of drug reproduction, operation and use, especially in improving the drug innovation system and approval system, showing sufficient "innovativeness". Article 9 of the "Draft for Comments" stipulates that the state improves the drug innovation system, supports basic research, applied research and original innovation of drugs, supports clinical value-oriented drug innovation, supports enterprises to adopt advanced technology and equipment to improve the level of drug safety, and in science and technology Support in project establishment, financing, credit, bidding procurement, price payment, medical insurance, etc. Support enterprises to set up or jointly set up research and development institutions, encourage enterprises to cooperate with colleges and universities, scientific research institutes, medical institutions, etc. to carry out research and innovation of drugs, strengthen the protection of drug intellectual property rights, and improve the ability of independent innovation of drugs.

With regard to speeding up the marketing channel, the "Draft for Comments" proposes that the State Council's drug regulatory department should establish a breakthrough therapy drug, conditional approval for marketing, priority review approval and special approval system to encourage drug R&D innovation and shorten the drug R&D and review process. The drug regulatory department of the State Council shall clarify the scope, procedures, support policies and other requirements, and support the accelerated listing of qualified drugs.

The "Draft for Comments" also strengthens the supervision, innovation and protection of children's medicines, and stipulates that the first new varieties, dosage forms and specifications for children to be marketed will be given a market exclusivity period. The "Draft for Comments" proposes that the state encourages the development and innovation of children's medicines, supports drug marketing authorization holders to develop new varieties, new dosage forms, and new specifications of children's medicines that meet the physiological characteristics of children, and gives priority review to children's medicines approval.

Song Hualin, a professor at Nankai University Law School, said that in the supervision of drug production, the "Draft for Comment" strengthens the management of material management, overseas production, and entrusted review, and strengthens the management of the processing of Chinese medicinal materials and the production of Chinese herbal decoction pieces; In 2016, the classification management system for prescription drugs and non-prescription drugs, the drug transportation and distribution system were clarified, and the management of drug online sales was further standardized. At the practical level, the "Draft for Comments" has improved the connection with the Administrative Punishment Law and the Administrative Compulsory Law, including clarifying the different situations of heavier punishment, lighter punishment, no punishment, and exemption from punishment, as well as discretion and execution in administrative punishment. These measures and practices further reflect the principle of inclusiveness and prudence in drug regulation.

Encourage the development of drugs for rare diseases

In terms of rare diseases, the "Draft for Comments" proposes that the state encourages the development and innovation of drugs for rare diseases, supports drug marketing license holders to develop drugs for rare diseases, and encourages the development of new indications for rare diseases for drugs already on the market. Drugs for rare diseases that are urgently needed in the clinic will be given priority review and approval. During the period of drug development and registration application, strengthen communication with sponsors, promote the accelerated listing of drugs for rare diseases, and meet the clinical drug needs of patients with rare diseases. The "Draft for Comments" specifically proposes that for new drugs for rare diseases approved for marketing, under the condition that the drug marketing license holder promises to ensure the supply of the drug, a market exclusivity period of up to 7 years will be granted, during which the same variety will not be approved for marketing. If the drug marketing authorization holder fails to fulfill the supply guarantee commitment, the market exclusivity period shall be terminated.

Regarding the development of generic drugs, the "Draft for Comments" also brings "bonus", proposing that the state encourages the development of generic drugs, and grants a market exclusivity period to the first chemical generic drug that successfully challenges patents and is approved for marketing. The drug regulatory department of the State Council will no longer approve the marketing of the same variety of generic drugs within 12 months from the date of approval of the drug, except for the successful joint challenge of the patent. The term of market exclusivity shall not exceed the term of the original patent right of the challenged drug.

In recent years, my country has made great progress in the field of innovative drugs. In 2021, the State Food and Drug Administration approved a total of 83 new drugs, including 51 domestic new drugs, showing an explosive growth over the previous year. As more companies increase new drug R&D and investment, the importance of intellectual property protection in drug R&D has become increasingly prominent, and the matching drug trial data protection system needs to be improved urgently.

Song Hualin believes that during the drug marketing review process, the drug marketing license applicant and the relevant patentee or related stakeholders may have disputes over the patent rights related to the drug applied for registration. The revised Patent Law in 2020 stipulated the drug patent link system for the first time. The State Food and Drug Administration and the State Intellectual Property Office issued the "Implementation Measures for the Early Resolution Mechanism of Drug Patent Disputes (Trial)" in July 2021. The "Draft for Comments" intends to systematically stipulate the drug patent link system for the first time in administrative regulations. The system design of drug intellectual property protection, focusing on the balance of interests between original drug companies and generic drug companies, not only protects the legitimate rights and interests of drug patentees , to encourage the research and development of new drugs, but also to promote the development of high-level generic drugs.