Boao Lecheng: A new foreign investment hub for medical institutions

By Huang Peng and Weng Tiantian, East & Concord Partners
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Due to their considerable scope of the market and comprehensive support facilities, first-tier cities in mainland China such as Beijing, Shanghai and Guangzhou have consistently been preferred destinations for foreign investors to establish or acquire medical institutions. However, the Hainan Boao Lecheng International Medical Tourism Pilot Zone has attracted the attention of many foreign investors on the strength of its policy advantages.

Many internationally renowned medical institutions have established their presence in this zone, including: Raffles, Singapore’s top private integrated medical group; Brigham and Women’s Hospital (BWH), one of the main teaching hospitals of Harvard Medical School; and a medical examination centre created by a Japanese medical family with more than 700 years of history.

RISE OF THE ZONE

Huang Peng, East & Concord Partners
Huang Peng
Partner
East & Concord Partners

The State Council approved the establishment of the zone on 28 February 2013. The zone enjoys unique policies for permitting medical institutions established there to import and use innovative pharmaceuticals and medical devices approved for marketing in the US, EU, Japan and other countries or regions as clinically urgent pharmaceuticals and medical devices (licensed items) before getting approval and registration in China. It enables domestic patients to benefit from the world’s most advanced pharmaceutical and medical device treatment without leaving the country.

Since 2020, the National Medical Products Administration has issued a series of regulations relating to real-world evidence (RWE). As the only RWE pilot in China, the zone can convert clinical data from licensed items used here into RWE for registration and approval in China. Therefore, medical institutions in the zone, as the source holders of clinical treatment data, have an additional advantage in negotiations with international pharmaceutical and medical device manufacturers that intend to apply for registration and permits in China.

Based on the two above-mentioned special policies, medical institutions invested in and established or acquired by foreign investors in the zone can be attractive to patients in need from across the country. Clinical data generated during treatment can bring additional benefits to the medical structure. The zone has thus become a rising hub for foreign investment in medical institutions in China.

IMPORT OF LICENSED ITEMS

In April 2019 and June 2020, the Hainan Provincial People’s Government issued the Provisional Regulations for the Administration of the Import of Clinically Urgent Pharmaceuticals in the Hainan Boao Lecheng International Medical Tourism Pilot Zone, and the Provisional Regulations for the Administration of the Import of Clinically Urgent Medical Devices into the Hainan Boao Lecheng International Medical Tourism Pilot Zone, respectively.

These provisions permitted medical institutions in the zone to import, for clinical urgency, pharmaceuticals and medical devices that have been approved in other countries or regions, but have not yet been approved in China, and that have no substitutes, as well as that have been approved for markets abroad, but no products of the same variety have been approved for registration in China.

THE RWD SYSTEM

(1) Definitions relating to real-world data (RWD). Real-word data refers to routinely collected data regarding patient health status and/or healthcare delivery. RWD that meets applicability serves as the basis for generating RWE, and can be routinely collected from various sources including patient health status, healthcare services and traditional clinical trials.

Weng Tiantian, East & Concord Partners
Weng Tiantian
Associate
East & Concord Partners

Real-world research/study (RWR/RWS) is used to obtain clinical evidence of a medical product’s usage value and potential benefits or risks by analysing the RWD.

Real-world evidence (RWE) refers to clinical evidence regarding the usage and potential benefits or risks of a medical product derived from a careful and complete analysis of RWD, including prospective or retrospective observational studies, pragmatic trials and other interventional studies.

(2) Scope of RWE application. The applications of RWE to support pharmaceutical regulatory decision-making include providing evidence of efficacy and safety for new pharmaceuticals’ registration and marketing, and a basis for specification changes of already marketed pharmaceuticals, as well as data and evidence of human trial experience and clinical R&D, famous traditional Chinese medicine practitioners’ prescriptions, and traditional Chinese medical institutions’ preparations for post-marketing re-evaluation of pharmaceuticals.

Common circumstances in which RWE is used for clinical evaluation of medical devices include providing clinical evidence to support product registration under the same kind of clinical evaluation system, as a supplement to existing evidence to support modifications of the scope of application, indications, contra-indications and post-market surveillance.

RWE ASSISTS PHARMA IMPORTS

The licensed item import policy allows domestic patients to benefit from global innovative pharmaceutical and medical device treatment at the earliest instance. Additionally, the RWE generated during the clinical treatment can accelerate the registration and marketing of global medical innovations in China. Under China’s current pharmaceutical and medical device registration system, the introduction of global medical innovations usually involves a complex approval process that can take up to five years.

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However, with the support of RWE, the process of approval and filing can be greatly accelerated. For example, the registration of Allergan’s Glaucoma Drainage Tube was reviewed and approved by the National Medical Products Administration on 26 March 2020, making it the first medical device approved for marketing in China based on RWD collected within the country, and the process taking less than five months. By the end of July 2022, nine international innovative pharmaceutical and medical device products have been approved for marketing via the zone.

As the source of RWD, foreign medical institutions in the zone can also use their accumulated data as a bargaining chip with foreign pharmaceutical manufacturers to secure more favourable commercial terms.

Huang Peng is a partner and Weng Tiantian is an associate at East & Concord Partners

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