In the second of our exclusive articles adapted from the 2021 CPhI Worldwide Annual Report, Nielsen Hobbs of Informa Pharma Intelligence describes how, COVID notwithstanding, the next five years in pharma will likely be governed by the same factors that drove changes during the past five: Brexit, China’s growing influence, and political instability in the US.

The pharma industry is about to find itself in an unrepentantly vulnerable position: Barring any deaths or defections, for the first time ever, the user fee legislation that finances speedy drug reviews by the US Food & Drug Administration will be renewed while Democrats hold the House, Senate and Presidency. The threat of Medicare drug price negotiation legislation remains very real too, but the alignment of the five-year user fee cycle with complete Democratic control of the legislating process illustrates that industry could face both pricing and policy fallout from the 2020 elections.

Of course, the Democrats’ razor-thin majorities and the disposition of the Biden administration suggest that the user fee process, acronymically know as PDUFA, won’t be as bad as industry might fear under a different scenario of Democratic control. Instead, industry’s regulatory and policy challenges over the next five years will likely be driven by the same factors that have marked that past half-decade: Brexit, China’s growing influence, and political instability in the United States.

Getting anything done in the US

“Instability” may seem an odd description of the political situation in the US, given that a major complaint of most stakeholders regardless of affiliation is that it’s nearly impossible to change anything. But this rigidity is a large cause of the political problems in the first place. If current policy reflected public opinion on everything from taxes to immigration to (unfortunately for industry) drug pricing, there would likely be less public rage, more productive discourse, and fewer attempted putsches.

What this means for the user fee debate is that there will be a lot of anti-industry vitriol when the legislation is up for renewal next year, but not much in the way of business-harming policy riders in the bill. Of course, as anyone who has had to deal with a REMS can attest, a determined committee chair can drive significant regulatory changes even if their party only controls one chamber of Congress. And while big changes are not likely in the cards, sponsors would be wise to expect new restrictions on accelerated approval (both in terms of when the confirmatory trials need to start and when they need to finish) as well as new requirements to enrol a more diverse population of patients in any trials.

Working through Brexit, and reimagining Europe

Europe’s parliamentary systems are less sclerotic than the President and Congress structure in the US. There is, though, a brewing post-Brexit rivalry between the EU and the UK, with each aiming to demonstrate they are the more supportive regulator.

Over the next few years, the EU expects to overhaul its pharmaceutical legislative framework and the UK MHRA plans to implement a new Great Britain approval pathway for innovative medicines. The European Commission has drafted a set of proposals for ‘future-proofing’ the regulatory framework to support what it calls patient-centred and needs-driven innovation, including:

• Revising the current system of incentives to promote innovation in drug development;
• Greater transparency of R&D costs;
• Specific incentives to promote the development of new types of antimicrobials;
• Better tracking of drug supplies and shortages;
• More flexibility in data requirements;
• Shorter review timelines; and
• Providing for a single assessment process across the EU member states for active substances used in different generic medicines to facilitate life-cycle management.

And the European landscape will also see a revamped study environment when the Clinical Trials Information System (CTIS) goes live at the beginning of next year. Among other things, the CTIS reforms will offer a harmonized electronic submission and assessment process for trials conducted in multiple EU member states, and greater transparency of trial results. A single application will include the submission to national competent authorities and to the ethics committees for all involved countries.

Numerous companies and industry bodies have highlighted the need for sponsors and CROs to start preparing and training for the introduction of the new system in January 2022. They recommend internal ‘readiness exercises’ to synchronize their processes with the CTIS portal requirements and to find out how the portal interacts with various existing master databases. Organizations will also have to consider the impact of the CTR on their clinical operations, such as anticipating differences in site activation ramp-ups and possible reduction of time between first and last site activations.

The end of the Brexit transition period saw a permanent split between the EMA and the UK Medicines and Healthcare products Regulatory Agency (MHRA). The MHRA is now a freestanding regulatory agency with the ability to set its own regulatory standards. It is no longer a part of the EU drug regulatory network, and its experts no longer attend meetings of the EMA committees. (EU centralized approvals remain valid in Northern Ireland, which is still part of the EU single market for goods.) Temporary provisions have been put in place to allow Great Britain to recognize EU centralized approval recommendations by the EMA’s drug evaluation committee, the CHMP, and marketing authorizations issued by the European Commission. This is known as the ‘Reliance Route.’ After the Reliance Route expires at the end of next year, the Innovative Licensing and Access Pathway (ILAP) is expected to become the main route for filing new innovative medicines in Great Britain over the next few years.

A key part of the ILAP is the award of an ‘innovation passport’ to products judged to be eligible for the pathway. Generally speaking, the product should be intended to treat a life-threatening or seriously debilitating condition, and there should be a significant patient or public health need. It should be an innovative medicine such as a new active substance or biological entity, or a novel drug-device combination, and be under development for a clinically significant new indication or for a rare disease or other special patient population. The innovation passport opens the way to the ‘Target Development Profile,’ a living document that will set out a roadmap for the development of, and patient access to, the new product. The TDP will make use of tools such as continuous benefit-risk assessment and more patient engagement in the development process.

Japan’s identity crisis continues

Like the UK, Japan finds itself a smaller country with a keen interest in remaining a premier destination for pharmaceutical companies. Unlike the UK, though, it can’t claim a Covid vaccine as among its recent achievements, a disappointment that is helping to fuel the drive to shake up Japan’s pharmaceutical regulation and reimbursement.

In many ways, though, industry is looking for a rollback rather than a revolution, especially a restoration of the original price maintenance premium system. Introduced on a trial basis in April 2010, this originally exempted all new drugs from Japan’s regular biennial price cuts until patent expiry, effectively maintaining initial reimbursement prices. However, changes made in April 2018 significantly narrowed the scope for eligibility, limited the premium to only the first three best- or first-in-class products or similar products launched within three years, and adopted a new ‘company scoring’ system to decide eligibility.

In addition, there was a shift towards annual (rather than the regular biennial) regular price revisions based on actual market prices, expanded repricing of big-selling drugs, and the adoption of a trial cost-effectiveness assessment scheme. The first of the ‘off-year’ reductions was implemented this April. Japan’s clinical data requirements and regulatory processes have also come under a renewed spotlight because of the slow approval and roll-out of Covid vaccines, due in part to the need to conduct local studies and go through standard (albeit expedited) regulatory procedures.

China’s big regulatory moves match its growing market

Japan’s neighbour China has developed multiple Covid vaccines (though many have questioned their effectiveness), and those product successes are among the factors contributing to Japan’s crisis. China is no longer an improvized if colossal rival; the country is a fully-fledged pharmaceutical ecosystem, featuring complex financing, development, and now approval, systems that complement its earlier strengths in manufacturing.

That transformation is perhaps illustrated best by the country’s first approval of a cell therapy: Fosun Kite Biotechnology Co Ltd’s CD-19-targeting chimeric antigen receptor T-cell (CAR-T) therapy FKC876, marketed globally as Yescarta (axicabtageneciloleucel), which was cleared in June as a third-line treatment for adult patients with diffuse B-cell lymphoma or relapsed and recurrent B-cell lymphoma.

Yescarta’s approval relied heavily on foreign data and is expected to open the door for more CAR-Ts at a time when the area is fast gaining traction. China is ranked second globally in terms of number of cell therapy studies after only the US, and emerging technologies such as universal CAR-T ‘off-the-shelf’ allogeneic products continue to draw large investment inflow.

To gain its new approval for Yescarta, Fosun-Kite – a joint venture between Kite Pharma (now part of Gilead Sciences) and China’s diversified Fosun group – conducted a bridging study in 2019 in a local patient population in China, although the majority of the data to support regulatory approval, including three-year follow-up study results, came from Kite.

The US firm’s pivotal ZUMA-1 trial enrolled 101 patients with refractory large B-cell lymphoma and showed that after three years, 47% of patients were still alive with a median overall survival of 25.8 months. One of the key considerations for cell therapy approvals in general is durability of response, which is no different in China. The national regulatory agency recently released follow-up study guidelines on gene and cell therapies, under which a five-year study following administration of gene therapies delivered via virus vectors (such as adeno-associated virus) is required.

Manufacturing: redundancies wanted

China has of course been known more as a manufacturing hub than an innovation centre, but the pandemic threatens to upend that status as well. The supply disruptions that accompanied the beginning of the global lockdowns in early 2020 helped fuel nationalist concerns in many countries worried about their reliance on foreign production.

Manufacturing has long been the backwater of the pharmaceutical industry. When it gets high-level attention at all it is seen as the cause of embarrassing recalls, a place to save money, or a way to extend the lifespan of a product through patent litigation. Now, however, it is becoming more of a hot-button political issue. But policy moves to encourage domestic manufacturing in the United States have been fitful at best, and any serious progress will likely be met by countervailing pressures from countries that would be at risk of losing manufacturing. Of course, ending up with more manufacturing overall may not be the worst outcome, as the continued global shortage of Covid vaccine demonstrates. Building surge capacity is a manufacturing policy goal that is unlikely to encounter as much political resistance as re-shoring facilities, but the ultimate success of those efforts is no more certain.

There is clearer reason for optimism about the direction of global regulatory harmonization, though the pace is likely to remain slow. The idea of a global regulatory dossier that exists in the ‘cloud’ seems to be gaining some traction, and certainly could help keep countries on the same page with their drug approvals, at least for product quality. Further acceleration of various aspects of the regulatory review process could occur as a result of lessons learnt from the pandemic. In the CMC area, for example, there could be greater flexibility around stability testing.

As the nitrosamine issue unfolds, industry is finding it very difficult to assess and manage the risks; but on the bright side, there could be lessons to be learnt on how to establish specifications that are truly patient-relevant, which could free the industry from quality thresholds that grow ever tighter as analytical methods become increasingly discerning. The biggest immediate challenge for manufacturers, however, will be seeing how well they have maintained compliance during an inspection hiatus that has lasted over a year but may soon be over as pandemic travel restrictions are expected to ease. That challenge involves some of the questions many of us face in our own lives and jobs as we look towards a post-pandemic future: How well have we maintained what we need to keep, and how well positioned are we to make things better?

The ninth edition of the CPhI Annual Report – a comprehensive report analyzing key trends and innovations in pharma – was commissioned by Informa Markets and will be available for download from www.cphi-online.com during CPhI Worldwide, which is being held at Fiera Milano, Milan, Italy, November 9-11, 2021.