The Impact of Generic Drug Consistency Evaluation Policy on Pharmaceutical Enterprises

Li Siwen ,Yang Yue,2＊

(1.School of Business Administration,Shenyang Pharmaceutical University,Shenyang 110016,China;2.School of Pharmaceutical Sciences,Tsinghua University,Beijing 100084,China)

Abstract Objective To study the impact of consistency evaluation policy on pharmaceutical enterprises from four aspects:reference preparations,evaluation methods,input costs,and market competitions,and government incentives for generic drug manufacturers,so as to put forward relevant suggestions.Methods Literature research method and statistical analysis method were used to provide data support for paper writing,making suggestions,and enhancing the predictability of policy.Results and Conclusion Some pharmaceutical enterprises faced difficulties in obtaining reference preparations,high input costs for exploring evaluation methods,and greater market competition.Consistency evaluation is a key measure to comprehensively improve the quality and efficacy of generic drugs.However,difficulties in obtaining reference preparations,high input costs and complex evaluation methods all affect the enthusiasm of companies.Therefore,national and local regulatory agencies have issued some supporting policies,which should be improved to assist enterprises in conducting consistency evaluations.

Keywords:generic drug;consistency evaluation;pharmaceutical enterprise;incentive policy

Since the consistency evaluation of chemical generic drugs was first proposed in “12th Five-Year Plan of the National Drug Safety”in 2012,related supporting documents on the selection of reference preparations,pharmaceutical research,in vivoresearch,and application materials have been issued[1].And the policy system is gradually improved.Enterprises actively respond to national policies and conduct in-depth comparative studies between generic drugs and reference preparations to achieve pharmaceutical and biological equivalence.According to the statistics of Medical Rubik’s Cube in 2019,the highest cost of consistency evaluation is nearly 40 million yuan,the lowest is about 1.5 million yuan,and the average cost is about 7.6 million yuan,which is equivalent to the input cost of re-developing a generic drug.Generic drugs that fail to pass the consistency evaluation within the prescribed time limit will be cancelled the drug approval number,some drugs will withdraw from the generic drug market,and the industry will face large-scale supplyside reform.Without follow-up incentives and guarantee policies,many enterprises may give up consistency evaluation[2].Since the Beijing Municipal Science and Technology Commission formulated the policy of subsidizing generic drug enterprises that have passed the consistency evaluation in 2016[3],local industry and information bureaus have also begun to introduce some incentives to enhance the enthusiasm of enterprises to carry out the consistency evaluation.

1 Background of the release of the consistency evaluation policy

Drugs contain two indicators:safety and effectiveness[4].When the external attributes such as prescription and dosage form are the same,differences in internal attributes such as manufacturing process will affect the clinical effect.The prescription is easy to copy,but the process and quality standards are difficult to be the same.Therefore,there may be many differences in efficacy between generic drugs and reference preparations[5].Before 2007,the imitation standards for generic drugs in China did not require generic drugs and reference preparations should be the same in the quality and efficacy.So,there was a certain gap between the approved generic drugs and reference preparations in terms of efficacy.After 2007,generic drugs were required to have pharmaceutical and biological equivalence through comprehensive comparison with reference preparations.Therefore,the first batch of consistency evaluation objects is the oral solid preparations of chemical generic drugs approved for marketing before October 1,2007 in the “National Essential Drug List (2012 Edition)”[6].If a generic drug passes the quality and efficacy consistency evaluation,it means that it is no different from the reference preparations,and the public can choose generic drugs that have passed the consistency evaluation with confidence.The United States and Japan are the earliest countries that implemented the consistency evaluation of generic drugs[7].In 1966,the United States began to evaluate the effectiveness of drugs approved from 1 938 to 1 962,and it has not been completed yet[8].During this period,3 443 kinds of drugs completed the final evaluation.Among them,2 225 kinds of drugs were confirmed to be effective;1 051 kinds were withdrawn from the market due to lack of evidence of effectiveness,and another 167 kinds are still pending.Japan began the quality reevaluation project of oral solid preparation generic drugs in 1998.It took 14 years to evaluate 706 chemical drugs,1 362 preparation specifications,and finally passed more than 4 000 approval numbers[9].Carrying out the consistency evaluation can make generic drugs consistent with reference preparations in terms of quality and efficacy.Besides,they can replace reference preparations in clinical practice.It can not only save medical costs,but also improve the quality of Chinese generic drugs and the overall development level of the pharmaceutical industry,which ensures the safety and effectiveness of drug use for the public[10].China is one of the largest countries in the world to produce generic drugs,it is imperative to evaluate the consistency of generic drugs.

2 Policy on consistency evaluation progress

In order to comprehensively improve the quality of generic drugs and realize the clinical substitution of domestic generic drugs to the original drugs,China first proposed the consistency evaluation of the quality and efficacy of generic drugs in 2012.For speeding up the consistency evaluation work,a series of generic drug consistency evaluation policies came into being(Table 1).

Table 1 Relevant policies for consistency evaluation of generic drugs

Continued Table 1

3 Implementation status of consistency evaluation of generic drugs

There are many generic drug manufacturers and varieties in Chinese[12].The first batch of consistency evaluation objects is the oral solid preparations of chemical drugs approved for marketing before October 1,2007,which are in the “National Essential Drug List (2012 Edition)”.In principle,the first round of consistency evaluation had to be completed before the end of 2018.According to statistics from the former China Food and Drug Administration (hereinafter referred to as CFDA),the 289 essential drug varieties involved 17 740 approval document numbers or registration certificate numbers,1 817 domestic manufacturers,and 42 imported drug companies[10].According to statistics from Menet database,as of the end of 2018,a total of 31 products (58 product specifications) in the 289 list had passed (or deemed to have passed) the consistency evaluation,and the consistency evaluation work needs to be continued.

Pharmaceutical manufacturers are the main body to carry out the consistency evaluation of generic drugs.As the scope of consistency evaluation continues to expand,generic drug enterprises in various provinces are facing the challenges of product elimination,competitive market and industrial structure reform.Since the issue of the “Opinions on Conducting the Consistency Evaluation of the Quality and Efficacy of Generic Drugs” in 2016,significant progress has been made in the consistency evaluation of generic drugs.According to statistics,as of August 2020,600 enterprises across China have actively participated in the evaluation,and a total of 533 varieties and 2 319 specifications have been accepted.Among them,Qilu Pharmaceutical Co.,Ltd.has the largest number of applications for consistency evaluation,with a total of 61 supplementary approvals,covering 43 varieties[13].Followed by Sichuan Kelun Pharmaceutical Co.,Ltd.and CSPC Ouyi Pharmaceutical Co.,Ltd.with 42 applications.In addition,drugs that are deemed to pass the consistency evaluation (generic drugs declared for marketing according to the new classification and generic drugs already marketed abroad) also account for a certain proportion.For example,on September 16,2020,the official website of the National Medical Products Administration (hereinafter referred to as NMPA) showed that celecoxib capsules from Qilu Pharmaceutical Co.,Ltd.were approved for marketing and deemed to have passed the consistency evaluation as the new 4 class.According to Insight database statistics,during the two-month period from July 17 to September 11,2020,there were a total of 434 clinical trials published in the Center for Drug Evaluation (hereinafter referred to as CDE),of which 138 were newly declared generic drugs.There were 49 Bioequivalences (Bes) for consistency evaluation.As of September 14,a total of 394 varieties (1 178 product specifications) of 399 enterprises in China had passed the consistency evaluation (including the deemed consistency evaluation).The number of consistency evaluations passed is on the rise year by year.Generic drugs that have passed the consistency evaluation of quality and efficacy will be allowed to participate in the national centralized drug procurement[14].The withdrawal of generic drugs that have not passed the consistency evaluation is also accelerating.For example,many enterprises are producing generic drugs of metformin hydrochloride tablets.As of September 21,2020,only 29 enterprises had passed the consistency evaluation.The other enterprises’ metformin hydrochloride tablets will face the result of withdrawing from the market.

4 Challenges faced by manufacturers

For generic drug manufacturers,passing consistency evaluation is both an opportunity and a challenge.Undoubtedly,consistency evaluation can improve the quality of generic drugs in an all-round way,but it also brings huge pressure to enterprises.Challenges mainly include the difficulty in obtaining reference preparations,complex product evaluation methods,high input costs,and fierce market competition.These challenges make enterprises less motivated to carry out consistency evaluation.

4.1 Hard-to-obtain reference preparations

On December 29,2017,the CDE of CFDA officially released “China Listed Drug Catalog”,and the online version (database) was also launched simultaneously for public inquiries.However,the update of the catalog is slow.The CDE has organized the selection and release of reference preparation catalogs.As of September 7,2020,China had released 34 batches of reference preparation catalogs.Enterprises could file and purchase reference preparations according to the catalog.If they are uncertain or unable to obtain the expected reference preparations,enterprises can apply for the selection process of Chinese reference preparations.If they cannot find or determine the reference preparations,they should carry out clinical effectiveness trials.These procedures will increase the cost and time of the consistency evaluation of generic drugs.Enterprises need to purchase the reference preparations according to the catalog of reference preparations.However,with the localization of reference preparations,the imported original drugs are no longer available in the market.If a generic drug enterprise chooses a localized reference preparation,the original enterprise needs to prove its localized drug has the same efficacy as the original drug,but it is difficult in reality[15].On August 27,2020,the CDE issued the first draft of Catalogs of Chemical Drugs with Clear Clinical Values and Unable to Recommend Reference Preparations,with a total of 117 varieties.The varieties in the catalog no longer need to carry out consistency evaluation.However,enterprises must implement product quality improvement research in accordance with relevant guidelines,declare their products for postmarketing change management,and implement the review time limit for consistency evaluation.This is a channel established for generic drug enterprises to carry out consistency evaluation in the absence of recommended reference preparations.At present,it is only for injections.The Office of Quality and Efficacy Consistency Evaluation of Generic Drugs of the CDE will release such varieties in batches in the future.

4.2 Complex evaluation method

The physiological environment in the human body is complex,and there are many factors that affect drug absorption.BE studies have always been the gold standard for evaluating the quality and efficacy of generic drugs.Except for a few biopharmaceutics classification systems (BCS),class I and class III drugs can be exempted from bioequivalence,most of them need to carry out bioequivalence studies.Besides,many drugs need to do clinical studies because they failed to find the expected reference preparations[16].But BE research also has its limitations,because human testing requires much more money and time thanin vitrotesting.Failure of research will cost the enterprise lots of financial resources,material resources and manpower.It may even cause unnecessary harm to subjects.If researchers can use appropriate dissolution profiles to predict BEin vivo,it will facilitate the development,evaluation and daily supervision of generic drugs,which can reduce the resources wasted due to drug development failures.In the research and development of generic preparations abroad,in vitrotest comparisons are usually used to explore the prescription and process of the reference preparations.After certain information is obtained,the prescription and process are verified and determined through bioequivalence tests[17].At the same time,generic drug enterprise can apply quality by design(QbD) to increase the success rate of bioequivalence trials.Because the original drug enterprise generally discloses the qualitative information of the prescription,the generic drug manufacturers have to obtain quantitative information through their own research and design the production process.The QbD will help the acquisition of relevant information.The U.S.generic drug R&D technical guidelines can be used as a reference for the consistency evaluation of Chinese generic drugs,and it is not necessary to have consistency.At present,generic drug consistency evaluation methods in China are mainly divided into four categories:deemed consistent evaluation,exempt BE test,BE test,and clinical effectiveness test[18].

4.3 High input cost

The consistency evaluation of generic drugs in China follows the international standard,making generic drugs and reference preparations pharmacologically equivalent and bioequivalent,thereby achieving clinical equivalence.Normally,the average chemical drug pharmaceutical index comparison study and the dissolution curve comparison study average 2 million yuan/variety,and the bioequivalence test averages 3 million yuan/variety,plus the related fees of drug registration[6].In addition,the cost of consistency evaluation for each product is mostly more than 5 million yuan.Except for a small number of drugs based on BCS Class I and Class III that can be exempted from bioequivalence test,most generic drugs need to do bioequivalence studies,and even some drugs need to be clinically effective because they cannot find reference preparations.Therefore,the R&D expenses incurred by different products due to different evaluation methods are also inconsistent.After receiving the “Notice of Approval of Supplementary Drug Application” issued by the NMPA,the enterprise will publish an announcement on the homepage of its official website that the product has passed the consistency evaluation of the generic drug.The announcements of some enterprises also show their input costs for the products that have passed the consistency evaluation.According to the information,the cost of the consistency evaluation of some varieties exceeds 10 million (Table 2).

As shown in Table 2,the cost of consistency evaluation may be as high as ten million.The first enterprise to carry out consistency evaluation has no experience to follow,and may invest more costs.For example,Jiangsu Hengrui Medicine Co.,Ltd.’s first generic drug of abiraterone acetate tablets had a consistency evaluation,which cost 39.05 million yuan.It is the product that has the highest consistency evaluation cost.For large generic drug enterprises with many approval numbers,it is obviously unrealistic to pass consistency evaluation for all these products.Therefore,enterprise has to make a choice.Small businesses are under greater pressure and may choose to abandon their products or withdraw from the market.

Table 2 Drugs and enterprises with higher input costs for consistency evaluation

Table 3 Drugs with a large number of enterprises passing the consistency evaluation

4.4 Fierce competition in the market

Generic drugs that have passed the consistency evaluation of can expand their market by entering the “China Listed Drug Catalog” and participating in the centralized procurement to compete with original drugs.On the contrary,if generic drugs cannot pass consistency evaluation,they will not be able to gain market access,facing the risk of being eliminated from the market.

As shown in Table 3,the number of enterprises that have passed the consistency evaluation of multiple varieties exceeds 3.According to the centralized procurement policy,if more than 3 drugs of the same variety have passed the consistency evaluation,products without passing the consistency evaluation will no longer be selected.According to the “Document on National Drug Centralized Procurement” issued by the Joint Procurement Office in July 2020,the maximum number of enterprises of the same product in the procurement product catalog is determined by the actual number of enterprises that meet the qualification of declared product.When the number of enterprises is greater than or equal to 11,they can be shortlisted up to 8.Although there are dozens of enterprises that have passed consistency evaluation for drugs such as amlodipine besylate tablets,they still have to face fierce market competition,which will have an impact on subsequent enterprises to carry out consistency evaluation of the same product.

5 China’s incentive measures for generic drug manufacturers

In the “Opinions of the General Office of the State Council on Carrying out the Consistency Evaluation of the Quality and Efficacy of Generic Drugs (Guobanfa [2016]No.8)” issued on March 5,2016,the General Office of the State Council clarified that drug manufacturers are the main body of consistency evaluation.Based on laws and policies,drug manufacturers should have sufficient freedom to fully mobilize the enthusiasm to carry out consistency evaluation[19].

5.1 Supporting policies for the consistency evaluation of generic drugs

The “Opinions of the General Office of the State Council on Carrying out the Consistency Evaluation of the Quality and Efficacy of Generic Drugs (Guobanfa [2016]No.8)” also proposes several supporting policies and measures.For example,the NMPA will publish a list of drugs that have passed the consistency evaluation.Enterprises can label the consistency evaluation mark on their product manuals and packaging for public reference.Therefore,the public can have confidence to select products that have passed the consistency evaluation.At the same time,it is beneficial to enhance enterprise market influence.In addition,the NMPA will provide medical insurance support for generic drugs that pass the consistency evaluation.The consistency means the generic drugs and their reference preparations have the same quality.In theory,the generic drugs and the original drugs should have the same quality.The medical insurance reimbursement should gradually shift to the generics with the same efficacy.For low-priced drugs,when enterprises invest high costs to improve the quality of drugs,they have good reasons to increase drug prices,which can both ensure corporate profits and the supply of drugs in hospitals.By using generic drugs that have passed the consistency evaluation,hospitals can reduce high-priced original drugs for patients,and the problem of rapid medical insurance expenditures can be alleviated.Therefore,the relevant policies for the consistency evaluation of generic drugs will help realize the joint reform of drug quality and price,and promote the sustainable development of medical care and medical insurance[6].China’s policy to support generic drugs through consistency evaluation has also greatly stimulated enterprises’ enthusiasm for the development of generic drugs.However,these policies need to be continuously improved and eventually become laws and regulations.They can facilitate the formation of a mechanism for the circulation and substitution of generic drugs,so as to achieve the healthy development of the generic drug market[20].

5.2 Other measures taken to assist the consistency evaluation

In addition to the incentive policies issued by the State Council [2016 (No.8)],the central government also assists generic drug enterprises to implement consistency evaluations in many ways.

5.2.1 Assisting enterprises to obtain reference preparations

The NMPA will assist generic drug enterprises to select and obtain corresponding reference preparations.If they cannot purchase suitable reference preparations through market channels,the NMPA can help enterprises obtain reference preparations from the original enterprises through intergovernmental cooperation channels.

5.2.2 Issuing technical guidelines

The NMPA will release technical guidelines for generic drug manufacturers to further standardize the consistency evaluation of generic drugs from the technical level[21].For example,the “Technical Guidelines for the Dissolution Test of Oral Solid Preparations” was released on February 5,2015 to standardize and guide the dissolution of ordinary oral solid preparations.

5.2.3 Adding a column for consistency evaluation

The official website of the NMPA has added a special column for consistency evaluation of generic drugs[22].To better assist generic drug enterprises to carry out consistency evaluation,the Office of Quality and Efficacy Consistency Evaluation of Generic Drugs opened a column for generic drug quality and efficacy consistency evaluation.There are 5 modules in the column,including news updates,policies,regulations and technical guidelines,reference preparations,questions and answers,and information disclosure.Enterprises can get the information they need under the relevant modules.

5.2.4 Deemed to pass the consistency evaluation

For generic drugs that have reached international standards,including those that have been approved for marketing in the European Union,the United States,or Japan or they use the same production line in China as those listed abroad,the quality and efficacy can be guaranteed.After being approved by the consistency evaluation office,they are deemed to have passed the consistency evaluation[23],which does not need to carry out the consistency evaluation anymore.At the same time,generic drugs approved for marketing after the implementation of the new registration classification no longer need to carry out consistency evaluation and they are included in the “China Listed Drug Catalog”as deemed to pass the consistency evaluation.

5.2.5 Giving economic subsidies to some products

Generic drug consistency evaluation is expensive and difficult to achieve.Generic drug enterprises are under tremendous pressure.To improve the overall quality of generic drugs,Chinese government should give pharmaceutical enterprises appropriate financial support.Beijing is the first city to adopt supportive measures.In 2016,the Beijing Municipal Science and Technology Commission collected superior varieties from Beijing generic drug manufacturers to help accelerate the process of consistency evaluation,and each generic drug got a maximum of 3 million[3].From 2017,different local governments have gradually introduced subsidy policies to reward enterprises that pass the consistency evaluation (Table 4).

Table 4 Subsidies for local consistency evaluation

Continued Table 4

6 Summary and suggestions

Generic drugs account for more than 90% of Chinese pharmaceutical market,and the quality and efficacy of generic drugs are closely related to citizen health.For generic drugs,consistency evaluation is the basic qualification for them to enter market.Since 2012,policies related to the consistency evaluation of generic drugs have been continuously issued,and most enterprises have actively participated.As of September 14,2020,a total of 394 varieties (1 178 specifications)of 399 enterprises in China had passed the consistency evaluation (including the deemed consistency evaluation),and the number of generic drugs that pass consistency evaluations is on the rise year by year.Choosing the varieties for consistency evaluation is a strategic issue for pharmaceutical enterprises because it takes a lot of manpower,material,and financial resources.Some varieties need more than tens of millions.The R&D department should interact closely with the marketing department to make decisions.However,high input costs and complex evaluation methods exert a lot of pressure on enterprises.If regulatory agencies do not have follow-up subsidies and guarantee policies,many enterprises may still be on the sidelines,or even give up consistent evaluation and withdraw their products from the market.It is recommended that local regulatory agencies,in accordance with the “Opinions on Reforming and Improving the Policy of Supply Guarantee and Use of Generic Drugs (Guobanfa [2018]No.20)” issued by the General Office of the State Council,release several policies about the consistency evaluation of drugs in procurement,clinical use,and medical insurance as soon as possible.At present,Chongqing,Anhui,Fujian,Zhejiang,Tianjin,Shaanxi,Hebei and other provinces have successively introduced medical insurance payment policies.It is clear that products that pass the consistency evaluation will enjoy the same policies as the original reference preparations when they are purchased in a centralized procurement[24].At the same time,the regulatory agency can provide support in accordance with the development cycle of the project in stages,so that enterprises can get better safeguard.While providing financial support,local regulatory agencies must coordinate and integrate various resources in a timely manner to solve the difficulties and problems encountered by enterprises in the consistency evaluation.Enterprises still need to assume the main responsibility of carrying out the consistency evaluation.In accordance with policies,recommendations,and related technical guidelines,they can conduct in-depth research on generic drugs without passing the consistency evaluation to improve their qualities.