July 2nd 2021, the Center for Drug Evaluation (CDE) of the National Medical Products Administration in China issued the "Notice on Publicly Soliciting Opinions on the Guiding Principles for Clinical Research and Development of Anti-tumor Drugs Oriented by Clinical Value".
The guidance clearly states that the main purpose of new drug research and developments should be to provide patients with better treatment options. When non-optimal treatments are selected as controls, even if the clinical trial reaches the preset research goals, it cannot indicate that the trial drug can satisfy the clinical patients’ actual need, or unable to prove the value of the drug to patients. Now, when all the pharmaceutical companies re-apply for clinical trials of oncology drugs, they need to conduct a "head-to-head" comparison test, that is, to defeat the best drug that has been approved for this indication.
The market tends to believe that this change will directly reduce the possibility of drugs developed by me-too in the future, thereby affecting the number of new drugs and reducing the number of orders that CXO companies can obtain.
(Note: Me too drugs refer to the molecular structure modification or modification of newly emerging breakthrough new drugs without infringing on the patent rights of others, looking for new drugs that have the same or similar mechanism of action and have certain advantages in therapeutic applications).
In an interview with Sina Pharmaceuticals, Dr. Du Xiangyang, Chief Analyst of Southwest Securities Pharmaceuticals department, shared that “more strict approval conditions for new drugs are conducive to the innovation of the pharmaceutical industry. In the long run, the demand for innovative drug companies is shifting closer to best in class or first in class. At the same time, companies will adjust their original R&D pipelines, eliminate redundant projects or projects with unfavorable drug prospects, and implement resource integration, which requires more R&D investment. Therefore, for leading CXO companies, they can rely on their R&D resources and cost-of-scale advantages to meet the future increased innovation needs of pharmaceutical companies. The improvement of CXO companies' order quality must outweigh the quantity.”
The promulgation of the new regulations objectively promoted the development process of domestic innovative drugs. While the new regulation impacting the CXO industry, it will also greatly improve the past chaos of "valuable clinical resources being occupied" and "limited patients being robbed". Perhaps this industry reshuffle can bring about a healthier and more value creating CXO industry.
In conclusion, the new guidance not only vigorously combats pseudo-innovation, but also further points out the direction for innovative drug companies to develop best in class and first in class.
After all, drug development competition will definitely transform from price competition caused by the proliferation of me-too to quality competition. Therefore, whether it is an innovative pharmaceutical company or a CXO platform, the value of innovation is the future of development.