POSITION | HEALTH CARE | CHINA
Sino-EU and Sino-German Cooperation in Health
How to Unleash the Health Care Sector’s Full Potential for Health and Wealth Digital version
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V.19.22.07 Position | Health Care | China Contents Sino-EU and Sino-German Cooperation in Health
Contents
Key Recommendations...... 4
Introduction...... 6
The Chinese health care sector and China’s response to the society megatrends...... 8
01 China’s health care sector and health care economy...... 9 02 How China is responding to the three megatrends: health in all policies...... 11
Recommendations for action...... 14
01 Set the agenda in Berlin and Brussels: We need health in all policies...... 15 02 Enhance competitiveness of health care industries in Europe and Germany...... 17 03 Promote innovation and improve knowledge transfer in health...... 19 04 Advance digital health care in Europe and Germany ...... 20 05 Advance global health ...... 22 06 Intensify dialogue on IPR in health care ...... 32 07 Cooperate on regulatory policies...... 35 08 Conduct reimbursement and health technology assessments (HTA)...... 39 09 Open markets for public procurement...... 42 10 Cooperation in commercial medical insurance...... 45 11 Cooperation in the digitalization of health...... 47
Imprint...... 50
3 Position | Health Care | China Key Recommendations Sino-EU and Sino-German Cooperation in Health
Key Recommendations
The health sector is increasingly becoming a focus of and the long-term budget for 2021–2027 now aiming political and public attention, and not only since SARS- to invest in a green, innovative, and digital future, the CoV-2 and COVID-19. Megatrends such as an aging health care sector can help to realize these endeavors. society, a growing number of diseases including cardi- ovascular disease, cancer, and diabetes, and the need to China can also benefit from products and services ensure the long-term financial sustainability of health offered by European health companies and the Chi- care systems have made it urgent for the international nese government, even before COVID-19, had set the community and policy makers to act. All United Nations target to strengthen its health care system. Now in times member states have placed such important social needs with and after the COVID-19 crisis, the government at the core of the global sustainability agenda and made also plans to invest and shape the health care sector- health the number three goal of all the UN Sustainable both, to ensure even better health care coverage for its Development Goals. people and also to mitigate recession. European com- panies are not only willing to participate in the Chinese Moreover, the health sector has always been an impor- market but also to improve the health and wellbeing tant economic driver. Europe’s health care industries of the Chinese people. To enhance the benefits of this are crucial contributors to health, innovation, and pro- cooperation, some essential preconditions must be met ductivity. The industries’ investments in research and and further developed by policy makers. production lead to highly paid employment for highly skilled professionals, sophisticated products, and tax In order for the German health industry to maintain revenues. In 2018 in Germany, for example, the health its competitiveness and unleash its full potential, it is sector was responsible for 12 percent of gross value therefore making an appeal for a suitable framework of added and employed over seven million people1. Its open markets based on the principles of a “level play- capacity for innovation has created novel preventive, ing field” and mutual benefit. In concrete terms, the diagnostic, and treatment options for patients, and German industry is calling for German and European generated for society above average growth rates of decision-makers to put health care high on the political 5.2 percent2. In some fields, up to 13 percent of compa- agenda as they redefine their own health and industry nies’ turnover is reinvested in innovation3. Thus, invest- strategies, help to mitigate the recession after COVID- ments in the health care sector can also help to mit- 19, shape the multilateral agenda, and negotiate with igate the global recession, that after COVID-19 and China. The industry asks the decision-makers to do so alone for the EU economy is considered to contract by highlighting the following topics. by 8.3 percent in 20204. With the EU recovery fund
1 Federal Ministry for Economic Affairs and Energy, Gesundheitswirtschaft – Fakten & Zahlen, 03.2019, p. 4,
4 Position | Health Care | China Sino-EU and Sino-German Cooperation in Health
Federation of German Industries (BDI) – German Health Alliance (GHA) recommendations
EU health policy concerns cross-industry interests and society as a 1 whole. It therefore needs to be high on the EU’s political agenda.
Health care innovation and digitalization can help improve patient access while creating new opportu- nities for outpatient, inpatient, and nursing care. Digitalization in health care is increasing the degree of interdependence between its different sectors (pharmaceutical, medical technology, biotechnology, IT ser- vices, and insurers). Thus, the health care sector needs to be perceived as a cross-industry endeavor rather than being looked at in silos.
The COVID-19 pandemic response has shown we can only be strong when governments, industry, and other actors work together. It also has made clear our need to stimulate the economy to mitigate reces- sion and thus ensure the health and wealth of society. A German and EU-wide “health in all policies” must reflect this approach. In the area of international health policy, Berlin and Brussels should upgrade health policy in Germany and the EU, further promote global health policy, and initiate a structured dia- logue with the People’s Republic of China. The aim of this dialogue should be to identify and remove bar- riers to trade and investment and to expand these efforts by promoting collaboration in selected fields.
To remain competitive, the health care sector in Germany and the 2 EU needs to do more to promote digitalization and innovation.
The European Commission’s EU recovery plan, the EU’s 2021–2027 budget, and the EU4Health pro-gram are welcome initiatives. They now need to be well equipped with budget lines, further detailed and con- nected to existing strategies. The European Commission’s AI strategy needs to place greater emphasis on the health care sector. The process of creating an EU health data space and establishing a single Euro- pean health market should be accelerated. Efforts to promote research should also be increased, includ- ing better support for start-ups and a more attractive framework for venture capital.
Access to key export and investment markets, such as China, 3 needs to be secured and designed to be innovation friendly
In particular, more innovation-friendly policies need to be secured in public procurement policies. It is important to avoid promoting market access asymmetries. In the health care sector, too, there is a need to ensure a level playing field. Good progress has been made in reforming health-related intellectual prop- erty protection in China, but there is still work to do with regard to promoting the enforcement of intel- lectual property rights safeguards. In the area of procurement, competition is still distorted by mandatory localization rules, and procurement criteria tend to emphasize price over quality and innovation.
An EU-China structured dialogue on health-related market access 4 topics should be supplemented by cooperation in the field of health.
Potential areas for cooperation include digitalization, harmonizing approval processes, establishing and developing innovation-friendly cost/benefit analysis procedures, and promoting personalized medicine. European and Chinese capabilities in these areas are highly complementary.
The EU and China need to work together to promote health through 5 multilateral forums such as WHO, the G20, and the WTO
Multilateral cooperation in this area can help provide strong momentum and direction. The key topics here are strengthening health systems, universal health coverage, pandemic prevention and response, open borders and international supply chains, digital health, and development cooperation on health.
5 Position | Health Care | China Introduction Sino-EU and Sino-German Cooperation in Health
Introduction
Forecasts indicate China’s health care market will be Therefore, the dynamics of the Chinese health care mar- worth USD 2.4 trillion by 20305, with double digit growth ket and the competition between the European health rates expected6. China’s large population of 1.4 billion industry and Chinese companies should be taken into people, its growing health care market, and Chinese gov- consideration with regard to current reviews of inter- ernment commitments and activities in the health care nal and external policies, the COVID-19 recovery funds sector make China a primary market for health care - being set up by the European Commission (EC), and and one of the most dynamic. The Chinese government similar reviews at a national level. In a globalized world, is supporting this growth through its strategic industrial health should not only be promoted in all policies and and social policies, with Made in China 2025 and Healthy at all levels in the EU’s single market and in its external China 2030 as the most prominent examples. Develop- policy. It also should be embedded in a coherent global ing homegrown high-tech industries, creating national framework. In the coming years there will be a chance and international champions and to position China as a to make considerable progress in multilateral forums on globally competitive powerhouse in high-tech industries health and trade and in bilateral relations with China. is a high priority for the Chinese government.7 A further To ensure the European health care industry remains goal is to improve the social security system. The Chi- in a strong position in the future, the Federation of Ger- nese government sees both as crucial for guaranteeing man Industries (BDI) and the German Health Alliance economic and social cohesion and for ending rural pov- (GHA) call on decision-makers in Berlin and Brussels to erty.8 In the eyes of EU companies, these policies create take a proactive approach to health policy, both domes- great opportunities but also several challenges for the tically and in bilateral cooperation with China. EU health care industry.
5 “China’s health service industry to reach 16 trillion yuan by 2030”, in China Daily, 15.08.2017,
6 Position | Health Care | China Introduction Sino-EU and Sino-German Cooperation in Health
Germany and the EU: Valuable part- generates growth and tax contributions. Health care is ners for global health high-tech. The European health care industry contrib- utes to this growth in innovative, knowledge-based, and The German health care industry makes an important cross-industry sectors such as medical technology, phar- contribution in Germany, Europe, and around the world maceuticals, biotechnology solutions, digital technol- by enabling high-quality health care for patients and ogies, diagnostics, insurance, and education. German society. On average, the German health care indus- and European health care companies today also pro- try invests about 6 billion Euro in research and devel- vide various products and services aimed at meeting opment, leading to new and innovative products and demand in the health care system in China’s large and services and triggering an economic footprint of about growing market. Chinese patients benefit from inno- 11 billion Euro.9 The health care industry is an impor- vative German and European therapeutic, diagnostic, tant economic driver. The German health care industry and rehabilitative medical devices, assistive technology contributes 12 percent of Germany’s economic growth.10 and medicines, hospital management, other health care One in eight jobs11 are in the health care sector—and and nursing services, and research collaborations. These even one in six jobs, according to a broader definition12. activities and investments provide China with high-qual- In the EU and in EU Member States, the health care ity employment opportunities, health care innovation, industry provides jobs for highly qualified people and and tax revenues.
9 Federal Ministry for Economic Affairs and Energy, Gesundheitswirtschaft – Fakten & Zahlen, 03.2019, pp. 39,
7 The Chinese health care sector and China’s response to the society megatrends
Aging Society Rising Middle Class Digitalization
8 China’s health care sector and health care economy 01 Market Overview health care market will be worth USD 2.4 trillion by 203020, with double digit growth rates expected21. China’s enormous health care market continues to expand, driven by an aging population, changing con- Health Care Spending: In 2014, health care expend- sumer habits, increasing urbanization, and economic iture as a share of GDP was 5.6 percent22 and by growth. Roughly 15 percent of China’s population is 2020, China’s healthcare spending is expected to currently aged 60 or older, a number that is expected to account for 6.5 to 7 percent of its total GDP23 while reach 37 percent by 205013. It is expected that one-quar- the economy still grew by 6.1 percent before the ter of the country’s population will be 65 or older by COVID-19 crisis24., In 2017, Chinese domestic gen- 2050, and that half will be 45 or older14. The health care eral government health expenditure per capita was system is not yet prepared for the additional burden this equivalent to USD 44025 compared to an average of will bring, particularly regarding non-communicable dis- over USD 5,200 in the world’s eighth largest health eases (NCDs) and chronic diseases such as cancer and care markets.26 Analysts estimate that health care cardiovascular disease. In 2014, about 87 percent of all expenditures in China could reach USD 1 trillion as premature deaths were caused by NCDs15. By 2016, early as 2020, as China converges with health care the percentage had already increased to 89 percent16. spending patterns in developed markets.27 According to a World Bank report from 2011, the num- ber of NCD cases among Chinese people over 40 will Health Care Spending Growth: Since 2003, health double or even triple over the next two decades until care expenditure has grown by 20 percent annu- 203017. Naturally, COVID-19 has brought about addi- ally in China28. Roughly 36 percent of all health tional challenges for the handling of pandemic response care spending is in the form of out-of-pocket and infectious diseases. And indirectly, the pandemic expenses29. In the long term, China’s growing pros- also entailed negative consequences for the manage- perity and aging population are expected to lead to ment of chronic disease, the monitoring and treatment a 10–15 percent increase in the rate of health care of chronic disease patients18. growth.30 How COVID-19 will influence health care spending remains to be seen. The SARS epidemic in Health care expenditure data 2003 had triggered meaningful government reforms and investments. Market Size: China is the second largest health care market in the world, with total health care spending of 20 USD 558 billion in 201619. Forecasts indicate China’s China Daily, according to the Chinese National Health and Family Planning Commission, “China’s health service industry to reach 16 trillion yuan by 2030,” Aug 15, 2017 21 The Economist: Navigating through China's evolving healthcare market: Healthcare 2020 https://www.eiu.com/public/topical_report. aspx?campaignid=Chinahealthcare2020 (accessed 21.07.2020). 22 Ulrike Reisach, Das Gesundheitswesen in China, Berlin 2017, pp. 21. 23 Healthcare reforms underscore market growth in The China Briefing < https:// 13 Ulrike Reisach, Das Gesundheitswesen in China, Berlin 2017, pp. 8. www.china-briefing.com/news/healthcare-reforms-underscore-market- growth-china/> (accessed 21.07.2020). 14 EY, The rise of private health insurance in China, 2016, p. 5,
The Chinese health care system China’s public social health-care sys- tem has three levels of funding China’s central government is responsible for national health legislation, health policy, and health adminis- So far, the public health-care system has provided for tration. Every citizen is entitled to receive basic health differentiated health care coverage depending on the care services31. Local governments (provinces, prefec- place of residence (rural/urban) and employment sta- tures, cities, counties, or towns) are responsible for pro- tus. In concrete terms, this included: viding them. Health authorities include the National Health Commission (NHC) and local Health Commis- . Urban Employee Basic Medical Insurance (UEBMI) sions, which are responsible for organizing and deliv- funded by both the employer and the employee ering health care, and for supervising providers. Over (the latter with yearly contributions equivalent to the past two decades, China has undergone reforms EUR 90–220)) aimed at improving access to health care through infra- structure investment, insurance reform, and expansion . Urban Resident Basic Medical Insurance (URBMI) of the private hospitals and health facilities market32. funded by both the state and the resident (the latter with yearly contributions equivalent to EUR 19–90) Health insurance . The new Rural Cooperative Medical Scheme More than 95 percent of the Chinese population bene- (NRCMS) funded by the state and the rural resi- fits from basic health care coverage33. But financial cov- dent (the latter with yearly contributions equivalent erage is still quite low and patients in 2017 still paid to EUR 19–50 but depending on relative levels of 36.1 percent of health care costs themselves on aver- wealth and prosperity in the different regions) 35. age34. Costs of assistive treatments in particular (such as prosthetics) are not reimbursed by national health In addition, there is a supplemental level—with critical insurance and have to be covered by out-of-pocket pay- illness insurance (CII) to reduce citizens’ health care ments in most cases. Health insurance is also provided expenditure.36 Starting in 2018, however, the Chinese by employers. Many Chinese companies offer group government announced that a unified health insurance health insurance to attract and retain their employees. scheme would be implemented for all urban and rural The Chinese government has continuously increased residents, with equal payments by 2019-202037. The Chi- financial coverage in recent years, but it still faces nese government is offering incentives to attract private ever-growing demand for better health care from the foreign companies to enter the health insurance market. rising middle class.
31 The Commonwealth Fund, International Health Care Systems Profiles – China, 35 Ulrike Reisach, Das Gesundheitswesen in China, Berlin 2017, pp. 20-21.
10 How China is responding to the three megatrends: health in all policies 02 China is responding to three dominant megatrends by on how to advance health services and meet the needs trying to meet the needs of its aging society and rising of an aging society and a growing middle class. middle class as well as to fully leverage the opportunities offered by digitalization. It has been doing this through China: Ambitious policies for challenging a number of wide-ranging industry and social reforms megatrends and has a successful track record: In the past two dec- ades China has expanded accessibility to health insur- Chinese government policies such as Healthy China ance, with coverage for over 95 percent of the popula- 2030 and Made in China 2025 aim to tackle three meg- tion38. And over the last three decades it has succeeded atrends, which are having significant impact on various in lifting 600 million people out of poverty39. In the last areas of health care: ten years it has steadily increased total expenditures on health. In 2017, China’s total health expenditures 1 An aging population reached about 5.2 percent of GDP, compared to under four percent of GDP in 200640, while China´s overall The aging of China’s population is making non-com- GDP increased almost fivefold within the same time41. municable diseases (NCDs) such as diabetes, stroke, And China’s government is determined to continue this and cancer more prevalent. It also is causing increased progress. Recognizing health’s effect on social and eco- demand for prevention, better diagnostics and treat- nomic development, President Xi Jinping has placed it ment, rehabilitation and care, and nursing services for at the heart of policymaking. To this end, the govern- the elderly. ment has set up industrial and social policies under 42 Made in China 2025 (MIC 2025) and Healthy China 2 Digitalization 2030 (HC 2030)43, and today these programs are guid- ing all health care-related decision-making in China. Digitalization has started to penetrate and shape all With MIC 2025, China is pushing its independent tech- levels of health care, and it will continue to do so. The nology development. It also is opening up for cooper- use of health registries and information systems, artifi- ation, and it has triggered reforms to improve the busi- cial intelligence (AI), and other approaches to process ness environment. Within these policies, China has also health data has the potential to improve various stages set out concrete measures to tackle the increasing can- of the patients’ journey and make evidence-based and cer burden caused by an aging demographic. China has cost-effective decisions about interventions. set up action programs in areas such as digitalization and AI. These programs are promoting concrete ideas 3 The rising middle class
The increasing disposable income available to Chi- na’s growing middle class is likely to lead to increased 38 Zhang, Yan et al., National Health Insurance Development in China from 2004 to 2011: Coverage versus Benefits., Ed. Yue Wang. PLoS ONE 10.5 (2015): demand for health care services and financial cover- e0124995. PMC.
11 Position | Health Care | China How China is responding to the three megatrends: health in all Sino-EU and Sino-German Cooperation in Health policies
1. Key strategic policies: Made in China 2025 Health-related factors that influence this concept and Healthy China 2030 include health literacy, diet, regular activities for phys- ical fitness, tobacco use, mental health, and environmen- MIC 2025 is in part a response by the Chinese govern- tal health. Life-long health interventions target women, ment to the country’s slowing economic growth. The ini- children, adolescents, workers, primary and middle tiative aims to ensure growth by (further) expanding Chi- school students, and senior citizens. Communicable and na’s high-technology industries and reducing dependency non-communicable diseases alike are on China’s radar, on foreign technologies. Specifically, MIC 2025 identifies with cardiovascular disease, cancer, chronic respiratory key industries in which China should achieve world lead- disease, and diabetes management47 assigned special ership in innovation or be at the forefront by 202545. importance. Specific action plans containing detailed These industries include information technology, the goals and actions have been released. These include pharmaceutical sector, robotics, medicines, and medical the Healthy China Action Plan 2019–2030 programs48 devices. Consequently, the Chinese government has (and for upgrading equipment and improving treatment at should have) a strong interest in establishing not only regional hospitals, supporting e-health and care for the an innovation-friendly environment in the health care elderly, and prevention. sector, but also related legislation in areas such as IPR. The MIC guidelines therefore aim to ensure an innova- Policies for an aging society: How Healthy tion-driven basis, quality first, green development, struc- China 2030 is tackling NCDs and cancer tural reorganization, and talent-orientation. However, the degree to which foreign companies will be able to benefit As in Europe, the increase of NCDs such as cancer, from MIC 2025 remains to be seen. There are still doubts diabetes, and cardiovascular disease is a major chal- in this regard because the domestic and global market lenge that impacts the health and financial well-being shares defined in MIC would also have to be realized of the Chinese population. This is one consequence of at the expense of foreign companies, i.e., German and China’s aging demographic. These diseases are already European. The initiative’s aim to foster domestic inno- contributing to rising health care costs and will do so vation and reduce dependency on foreign technologies increasingly in the future.49 A joint report by the World presents a challenge to the Chinese government’s stated Bank and the Chinese government found that with- goal of promoting open and equal market conditions. HC out reform, health spending would increase to USD 2030 describes how industrial and social reforms should 2.5 trillion by 2035, up from USD 543.5 billion in 201450. be integrated into all legislation that is relevant for the This will increase health expenditure from 5.3 percent health care sector. It defines how health services and of GDP in 2015 to 9.1 percent of GDP in 2035.51 HC financial coverage should improve nationwide, particu- 2030 therefore includes specific oncology strategies, larly in rural areas. It has triggered a wholesale institu- which include promoting cancer research and devel- tional reshuffle, capacity building, and numerous legisla- opment, reducing customs duties for oncology drugs, tive proposals. HC 2030 outlines four specific strategies: and better reimbursement52. The Healthy China action
Controlling major risk factors, increasing the capacity of health services, expanding the health care industry, and continuously improving the health care system. These 47 David Lee, “China unveils largest public health plan in history”, in strategies are based on four core principles: health as a China Daily, 17.07.2019,
12 Position | Health Care | China How China is responding to the three megatrends: health in all Sino-EU and Sino-German Cooperation in Health policies
plan defines additional action points53. These include development. It will further research and develop- promoting early screening and treatment, developing ment of flexible, wearable, and biologically compati- diagnosis and treatment criteria for common cancers, ble monitoring systems. It also will lead to advances implementing health care practitioner training and edu- in human-computer collaboration in intelligent clini- cation, establishing a comprehensive clinical evaluation cal diagnosis and treatment programs to achieve image system for cancer medicines, and incorporating eligible recognition, pathology classification, and intelligent medicines into the national reimbursement drug list. multi-consultation. AI will make possible large-scale Additionally, HC 2030 aims at reducing the imbalance genome recognition, proteomics (large-scale studies of between rural and urban health care coverage, and the proteins), metabolomics (chemical processes involving action plan´s goal is to strengthen diagnostic and medi- metabolites, the small molecule substrates, intermedi- cal assistance for cancer patients in rural areas. ates and products of metabolism), and research and development of new drugs. Intelligent monitoring, pre- 2. Digitalization and artificial intelligence in vention, and control in the event of epidemics should health care also be improved by AI. Finally, AI will also enhance intelligent health management and care, e.g., in insti- MIC 2025 aims to promote innovation and digitaliza- tutions and equipment for home care. tion of the industry. It has been followed by specific action plans with regard to the internet and Big Data Funding strategies to promote AI in all indus- in 2015, a development plan for the robotics industry tries and in the health field in 2016, and a three-year action plan for the internet and AI in May 2016. In April 2019, the Chinese gov- Funding and incentives from both the government and ernment also announced plans for a Digital Silk Road multi-channel private investments are at the heart of and is thus engaging in strategic technological develop- China’s AI strategy for all key industries57. Financial ment and competition.54 More specifically with regard support is to be increased, and leading enterprises will to health care, the Chinese State Council published a be encouraged to contribute to AI development funds. national strategy for artificial intelligence entitled the One important funding program is 1+N, which includes “New Generation Artificial Intelligence Development R&D project funding, investment in start-ups, and devel- Plan”55 in July 2017. These guidelines expand the gov- opment of AI technologies and talent. The project is set ernment’s efforts to achieve high technology leadership up jointly with the five national AI champions Baidu, as part of MIC 2025 and are aimed at making China Alibaba, Tencent, iFLYTEK, and SenseTime. There a global leader in AI by 2030. They will not only ena- also is clearly a dimension beyond China’s borders— ble a more technically sophisticated and efficient econ- leading Chinese AI companies are being encouraged omy, but also help build a society with the safeguards to explore investment options abroad. Services will be and convenience related to AI, particularly in educa- established that pursue overseas mergers and acquisi- tion and health care56. tions, equity investment, venture capital, and establish- ment of overseas R&D centers. Conversely, foreign AI More specifically, AI will be used in all corners of the companies and research institutions will be encouraged health care systems, e.g., to create intelligent medi- to set up R&D centers in China, and collaboration will cal care through innovations such as smart hospital be encouraged. In addition to the national program, construction and surgical robots and for research and 1+N is also replicated at the local and provincial lev- els (direct-administered municipalities), for example in 53 LexisNexis, Outline of the Plan for "Healthy China 2030",
13 Position | Health Care | China How China is responding to the three megatrends: health in all policies Sino-EU and Sino-German Cooperation in Health
Recommendations for action
Competitiveness Innovation Digitalzation
14 Set the agenda in Berlin and Brussels: We need health in all policies 01 China’s approach to health and the health care sector Welcome EU initiatives now need to is largely holistic and more structurally integrated than be embedded in innovation-friendly was the case in the EU until only very recently. Now policy environment the European Commission has proposed its EU long- term budget for 2021–2027. The Multiannual Financial The health care industry welcomes the European Com- Framework (MFF) legislation empowers the EU recov- mission´s proposals and the EU Member States´ govern- ery plan58, including the EU4Health program promoting ments´ approval of the Coronavirus recovery fund59. It the health and prosperity of EU citizens in an integrated urges policymakers in Berlin and Brussels to now not approach. These are welcome initiatives that now need only strive to uphold those values and achievements to be well equipped with budget lines, further detailed within the EU, but it also calls on all European legisla- and connected to existing strategies. In China, the view tors and governments to support this budget and proac- that an integrated health policy approach is beneficial tively examine and ensure that all possible measures to for the country’s health, wealth, and social stability was advance health in all policies and create the most inno- evident throughout Healthy China 2030 and Made in vation-friendly environment possible are being taken. China 2025. Of course, challenges remain in China with regard to raising health care coverage nationwide for Concretely, it seems very unfortunate that EU Mem- all citizens, but tremendous progress has been made in ber States slashed down the EU Commissions´ budget China´s health care system particularly in the last three line proposals for health and innovation to such a large years. By contrast, EU countries had already been enjoy- extent. Also highly needed funds for digitalization were ing an overall high level of health-care coverage for dec- not accorded. According to first sources in the time ades. High standards of health and financial well-be- of writing, the EU4Health budget proposal was cut ing have characterized Europe’s image for a long time: down from originally 9.3 billion Euro to 1.7 billion Europe has excelled at providing a solid social security Euro, thus an 84 percent cut compared to the original system, including excellent health services. It has led EU Commission proposal from May 2020. Addition- the way in advancing innovation and high technology. ally, the Horizon Europe program is cut in both the However, until very recently the EU and most of its MFF and Next Generation EU (NGEU) instrument, member states had not yet set up pro-active and holis- decreased to €75.9 billion in the MFF, €80.9 billion tic health policies to sufficiently secure these standards. with the NGEU “boost”. This means a -14 percent cut Fortunately, that now seems to have changed with the compared to the Commission May 2020 proposal and recently proposed EU recovery fund and EU4Health even more than 30 percent less than what the EU par- programs that are part of the EU’s COVID-19 pandemic liament had previously asked for to ensure a globally response. Their three pillars are aimed at creating a competitive EU economy60. green, digital, and resilient Europe and assign a key role to the health care sector.
59 European Council, Council Conclusions of EU Summit on EU Coronavirus Recovery Fund 21 July 2020,
15 Position | Health Care | China Set the agenda in Berlin and Brussels: We need health in all policies Sino-EU and Sino-German Cooperation in Health
EU Funds need to be used wisely use their high data protection standards as a competitive and effectively advantage, rather than viewing it as a hindrance com- pared to China and the United States. Citizens rely on In times of highly needed investment to improve health policy makers to protect their data while allowing digi- care, uphold competitiveness in high tech industries tal innovation to flourish. Data governance should allow and mitigate recession, it is crucial to quickly accord for appropriate and safe use of data at scale, to enable the overall budget lines by national legislators and then critical insights and accelerate innovation in order to use the fund wisely and even more effectively. It there- achieve an overall faster, safer, and better administra- fore needs concrete measures, incentives and improved tion of health care. frameworks, to refine and fully unfold the potential of the EU4Health program and other relevant strategies The health industry is calling on the EU and Germany such as the EU industrial strategy and innovation and to integrate health in all policies and to combine pro- pharmaceutical strategy. Now is the time to respond vision of better health services for patients with incen- appropriately to the challenges of an aging society, the tives for further economic growth. The EU should focus opportunities of digitalization, and the need to ensure on and further develop the internal and external dimen- growth, by investing in innovation and high technology. sions of health policy in order to safeguard jobs, sus- By this, more resilient health care systems and econo- tainable growth, and people’s wellbeing. mies can be ensured. As health care becomes more and more digitalized, protecting private health care data is becoming more crucial. Europe and Germany should
16 Enhance competitiveness of health care industries in Europe and Germany 02 Revise internal industry and EU recovery plan64, including the EU4Health pro- innovation policies gram. Secondly, the Commission adjusted its Work Pro- gram for 2020 to account for the challenges posed by On the national level, revise internal industry and inno- the pandemic. Thirdly, the program of the European vation strategies and funding opportunities, such as Council Trio Presidency (Germany, Portugal, and Slo- Industriestrategie 203061, the KI-Strategie der Bundes- venia) was released to set out the council’s priorities regierung (AI-Strategy of the German Federal Govern- for 2020 and 2021. ment)62, the Nationale Dekade gegen Krebs (National Decade against Cancer)63 to ensure their comprehen- Ensure implementation sive approach to health care. At the EU level, the Euro- pean Commission has been very active in 2020, in part All these activities are highly promising because they specifically in response to the SARS-CoV-2 pandemic show a common European thrust to improve and and its economic, social, and political ramifications. rebuild the EU in the wake of the pandemic, includ- Most recently, the European Commission proposed ing in health care. However, it is important for these Next Generation EU, an expansive recovery instru- ambitious targets to also be met with equally rigorous ment to initiate a multi-faceted recovery throughout implementation to ensure Europe’s well-being and com- the EU. The Commission also proposed the EU budget petitiveness during health and economic crises. Also, for 2021–2027 and the MFF legislation powering the France who will be residing over the EU´s Council Presi- dency in 2022, could be a good ambassador for an ambi- tious health policy agenda, innovation, digitalization 61 Made in Germany: Industriestrategie 2030, https://www.bmwi.de/Redaktion/ DE/Dossier/industriestrategie-2030.html (accessed 23.07.2030). 64 European Commission, MFF Legislation,
17 Position | Health Care | China Enhance competitiveness of health care industries in Europe and Sino-EU and Sino-German Cooperation in Health Germany
and investment incentives, as the French government incentivize manufacturing capabilities of the pharma- even before the pandemic had shown interest in and ceutical sector. The European Parliament has also pub- initiatives for promoting innovation and digitalization lished a study of EU public health policies69. The health in the health care sector65. Also, French (health care) industry welcomes the areas of focus outlined by the associations have started to resemble health care actors´ President of the European Commission and Germany’s interests in innovation and digitalization promotion66 priorities for its presidency of the European Council. and now with COVID-19, France together with Ger- These include projects to address a pan-European code many called for a meaningful EU recovery fund to mit- of conduct for sharing of health data, genome sequenc- igate the recession and set the right investment incen- ing, and cancer. Also, harmonizing efforts such as the tives67. In addition, all countries and actors must support OECD Digital Health Recommendations and Digital the European Commission in implementing the Com- Europe’s proposals under “A stronger digital and indus- mission’s agenda that preceded the pandemic where trial Europe” should be swiftly implemented. applicable. This includes its strategic priority of cre- ating a “Europe fit for the digital age”, which includes Enhance dialogue with the EU’s strategies on artificial intelligence and data. Chinese stakeholders The roadmap “Shaping Europe’s digital future” indi- cates the key policy actions the Commission intends to Enhance dialogue and cooperation with China and Chi- take over the next four years. These include creating a nese stakeholders in the health care sector on innova- European Health Data Space, developing the European tion topics and frame the EU’s external trade strategy Plan to Beat Cancer, and creating an environment of and all China strategies accordingly. The InnoHealth excellence and trust that enables use of AI in Europe. China campaign is an excellent example of promot- The European Commission’s White Paper on Artificial ing closer Sino-German collaboration by companies, Intelligence underlines the benefits for the health care particularly SMEs and start-ups. Also, the EU should sector, e.g., making diagnoses more precise and ena- enhance EU-Chinese bilateral cooperation in R&D and bling better prevention of diseases68. These topics must innovation and enhance exports of health care prod- be further addressed in the aftermath of the pandemic ucts and trade promotion. where possible. Furthermore, in an Industry Strategy draft the European Commission plans to strengthen and
65 French Healthcare Industries and Technologies Strategic Committee, Healthcare made in France, April 2017,< https://www.diplomatie.gouv.fr/IMG/pdf/sante_ made_in_france_en__bd_cle0e12b1.pdf> ( accessed 21.07.2020) 66 BusinessFrance, 10 pointsclefs santé,
18 Promote innovation and improve knowledge transfer in health 03 We need a reliable framework for promoting and pro- Boost knowledge transfer: To enable break- tecting innovation in Germany and Europe. Before through innovations in the health industry, we need investing in development of new active substances and to strengthen the European Research Area and products, the health industry needs an adequate level of EU framework programs, and boost knowledge certainty regarding the regulatory environment. transfer between academic and industrial health research sectors. Against a backdrop of increasing international com- petition, the EU should create a coherent legal frame- Upgrade research funding: The EU’s Horizon work to remove structural barriers to innovation. This is Europe (2021–2027) research funding program essential for ensuring that scientific excellence is rapidly needs to have at least EUR 120 billion available to translated into economic benefits and industrial compet- make the European ecosystem globally competitive itiveness. The mission letter to the new EU health com- for research and innovation. missioner highlights the need for the European health industry to remain an innovator and world leader. Promote partnerships: Health undertakings within Horizon Europe should involve partners from the Europe therefore needs to develop a coordinated strat- entire industrial health care sector and the phar- egy for creating a framework that will enable a sup- maceutical industry, following the example of the portive business environment. This in turn can lead Innovation Medicines Initiative (IMI), a public pri- to development of sustainable innovation and digital vate partnership (PPP). change while facilitating the creation of start-ups and the growth of existing businesses. This necessitates close Involve industry: To enable risk-based, technolo- cooperation between EU Member States. Only by work- gy-adjusted measures rather than uniform solutions ing together will Europe remain globally competitive in the health industry, we recommend strong indus- in the future. try participation in the planned Digital Europe pro- gram. Protection of intellectual property is a criti- Germany also needs to boost its innovation strategies. cal factor in promoting investment in research and It has already taken steps to strengthen innovation part- development both in Germany and in Europe, espe- nerships with other countries. InnoHealth China, for cially in the highly innovative field of health technol- example, is part of the fourth phase of the German Fed- ogy. The health industry should therefore continue eral Ministry of Education and Research’s International to be closely involved in developing this system. Research Marketing initiative. For the period 2019–20, it is being led by the Fraunhofer-Gesellschaft. Learn from one another: We recommend imple- menting institutions that observe and analyze Recommendations on Innovation Promotion in health-related developments in China, as well as Europe and Germany: discussions of relevant insights with the European health industry. Support innovation and digital change: We need a coordinated strategy and coherent legislation in Germany and Europe for creating a business envi- ronment that will support sustainable innovation and digital change in the health industry.
Assess innovation capacity: We recommend that the European Commission’s revised impact assess- ment procedure should include regular assessments of the impact on innovation capacity.
19 Advance digital health care in 04 Europe and Germany Digitization Data exchange Early detection
Digital technologies offer multiple benefits and are direction, but the road to a digital health care system transforming the health care sector. New technologies remains long. The German Federal Ministry of Health enable better and more efficient medical care, as well as (BMG) has put forward a number of laws to advance broader access to medical expertise, especially in rural digitalization of Germany’s health care system, includ- and remote areas. Digital technologies can also help us ing the Digitales-Versorgungs-Gesetz71 (Digital Supply to better cope with an aging society. Act, DVG) in 2019 and the Patientendaten-Schutz-Ge- setz72 (Patient data protection act) in 2020. These laws Digital health is an integral part of the European Com- aim to provide access to and reimbursement for digital mission’s Digital Single Market strategy. In Europe, health care solutions, and protect patients’ health care Germany urgently needs to catch up in implement- data. The BMG has also initiated a participatory pro- ing digital technologies in the health care system. A cess called Digital Health 2025 to work on the future 2018 comparative study carried out by the Bertelsmann of digital health and come up with actionable solutions. Foundation ranked Germany 16th out of 17 countries in a digital health care index.70 There are signs that the German health care system is moving in the right 71 Digitales Versorgungsgesetz, https://www.bundesgesundheitsministerium.de/digital-healthcare-act. html. 72 Patientendatenschutzgesetz, 70 Bertelsmann Stiftung, #SmartHealthSystems – Digitalisierungsstrategien im https://www.bundesgesundheitsministerium.de/patientendaten-schutz- internationalen Vergleich, 10.2018,
20 Position | Health Care | China Advance digital health care in Europe and Germany Sino-EU and Sino-German Cooperation in Health
For Europe and Germany, improving health care on mandatory application of international standards, requires a system of cross-border exchanges of health and specifications for their implementation. data, one that takes into consideration data privacy and data protection requirements. Appropriate, resilient Promote early detection and screening: Update data networks are essential for fully developing the inno- the 2003 Council recommendations on early detec- vative power of digital health care solutions. For this rea- tion and screening and make better use of digital son, there is an urgent need to put in place a data-shar- and AI technologies. ing framework and a coherent, innovation-oriented legal framework throughout Europe and in Germany. Support digital solutions in cancer care: We sug- gest using EU funds to support deployment of digi- While first steps have been taken by the European Com- tal solutions in cancer care Europe-wide. Resources mission and the German federal government, industry from Digital Europe and the structural funds should urges all stakeholders to keep up the pace and even step be earmarked to improve investments in digital can- up their efforts in the area of health care digitalization. cer care solutions throughout Europe.
Recommendations on Digitization Promotion in Improve digital health skills: Utilize the Digital Inno- Europe and Germany: vation Hub infrastructure to address organizations and professionals in health care to improve their dig- Remove regulatory barriers within the European ital health skills and training. single market: We recommend a strategy for a Dig- ital Single Market for Health (DSM-H) to remove reg- Promote compliance: Push compliance with the ulatory barriers between national health care markets electronic health record exchange format recommen- in EU Member States. The European Commission’s dations (EHRxF) through funding and procurement. e-Health strategy should include a clear implemen- tation framework with specific targets and deadlines Facilitate cross-border exchange of health data: to accelerate the exchange of health data. For the The German health care industry is committed to benefit of patients, secure use of data for academic flexible project groups of interested EU Member and industrial research should be facilitated both in States for implementation of innovative services Germany and at the European level. This requires within the framework of the eHealth digital ser- the establishment of a European health data space. vice infrastructure (eHDSI). A uniform solution for trust centers throughout Europe will help to facili- Promote the exchange of data and interoperability: tate the cross-border exchange of health data over In order to promote the exchange of data, e.g., in the long term. the context of health care research, the European Commission and political stakeholders in Germany Ensure implementation and investment: Secure should advocate a legally certain demarcation digitalization of the industrial health care sector in between anonymization and pseudonymization Germany and Europe requires uniform implementa- of personal data. To ensure efficient research and tion of the EU General Data Protection Regulation development of innovative therapies, the European (GDPR) and more investment in digital expertise. Commission should drive the debate about the design and functionalities of an EU health data space. The Ensure cybersecurity: Cybersecurity is a concern in Commission also should promote development of a the field of medical technology. Within the framework legal framework for the use of existing data (e.g. for of the EU Cybersecurity Act, due attention should Big Data analysis) between (and within) EU Member be given to this situation by ensuring that the health States. Interoperability of digital health care solutions industry is actively involved in implementation of the must be strengthened both in Germany and at the EU Medical Devices Regulation. European level. This requires EU-wide agreement
21 05 Advance global health Multilateralism Pandemic Response Digitalization
The 2030 Agenda for Sustainable Development was systems. These formats provide the right combination of adopted by all United Nations member states in 2015. Its health system expertise and financing. And they involve health-related Sustainable Development Goals (SDGs) issues such as securing free trade, resilient international particularly SDG 3 aim to “ensure healthy lives and pro- supply chains, and the promotion of innovation and sci- mote well-being for all”73. National and EU efforts to ence. In the same line of thought, promoting and facil- implement “health in all policies” therefore naturally itating formats such as Business20 and Science2074 is contribute to the global sustainability agenda. Bilateral also key to strengthening valuable global networks and cooperation can complement and support the global thinking as important contributors of expert knowl- agenda. It enables the countries to not only support one edge. Furthermore, the WTO is also an important forum another’s policies and improve health for the EU and thanks to its customs liberalization and trade facilita- China (whose populations combined account for about tion capacities and agreements. At the multinational 1.8 billion people - one quarter of the world’s popula- level too, ”health in all policies” should therefore be tion), but also act in alliance to drive minilateralism, an obligatory requirement that is viewed as essential. plurilateralism, and multilateralism. The World Health Organization’s commitments and activities, and its agen- Germany, the EU, and China have all signaled willing- da-setting in the G20, are therefore key to achieving ness to assume global responsibility for strengthening advances in areas such as the strengthening of health 74 G20, Improving Global Health – Strategies and Tools to Combat Communicable 73 United Nations, Goal 3: Ensure healthy lives and promote well-being for all at And Non-Communicable Diseases,
22 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
health systems. They also have emphasized the impor- 1. Strengthening health systems and Univer- tance of multilateralism in joint efforts to improve health sal Health Coverage around the globe. This was reinforced by statements by German Chancellor Angela Merkel75, European Com- The G20 and the UN have become important actors for mission President Ursula von der Leyen76, and Chinese global health. Since 2015, the G20 member states have President Xi Jinping at the virtual 73rd World Health begun to advocate for concrete global health action and Assembly on May 18th. In the mission letters to the strengthening health systems. In addition, the United commissioners, European Commission President Ursula Nations’ General Assembly devoted the 2019 UN High- von der Leyen calls on every commissioner to con- Level Meeting to UN SDG goal 3.8: Universal Health tribute to the overarching goal of achieving the UN Coverage (UHC)79. In the run-up to the UN HLM on SDGs77. This is a much-appreciated sign. Considering UHC, governments and non-governmental stakehold- the size of the Chinese and EU populations, their eco- ers (including industry) coordinated efforts to advance nomic strength, and their penetration into global sup- the UHC policy agenda, e.g., through an interactive ply chains, they would be well positioned to jointly multi-stakeholder hearing convened by the President advance global health efforts. of the General Assembly80. At least half of the world’s population still lacks access to essential health services, The challenges and almost 100 million people a year are pushed into extreme poverty by the costs of essential health care81, The list of global health challenges is long and grow- consequently this is an important joint action. The aim ing. Two goals in particular have dominated the mul- of UHC is to ensure that all individuals and communi- tilateral agenda over the last two years: 1) achieving ties have access to high-quality essential health services universal health coverage and strengthening health sys- without risk of financial hardship. Both Germany and tems (and since late 2019 and early 2020,) handling the China have contributed to UHC, either by promoting response to the SARS-CoV-2 pandemic. German indus- multilateralism or by advancing their respective domes- try is calling for further advances of these global health tic health policies in particular. goals and for including them in bilateral cooperation. In addition, the health care industry is ready to support The German government has demonstrated its com- these endeavors through collaborations and public-pri- mitment to global health and UHC through a number vate partnerships with stakeholders from science, civil of initiatives and institution-building decisions, such society, and the public sector78. as, by placing the establishment of effective health sys- tems on the agenda for the G8 and by establishing the Science 20 Dialogue Forum on Improving Global Health during Germany’s G20 presidency in 201782.
79 United Nations, Political Declaration of the High-level Meeting on Universal Health Coverage “Universal Health Coverage: Moving Together to Build a Healthier World, 23.09.2019,
23 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
Beyond agenda-setting, the German government—the of multilateral organizations including the G20, APEC, fourth largest contributor to the WHO83—has provided and BRICS, reiterates the G20 consensus reached at and advocated for adequate funding of global health ini- the Extraordinary Leaders’ Summit on COVID-19, calls tiatives in multilateral organizations. The German gov- on the IMF and World Bank to provide emergency aid ernment has also triggered an inclusive policy process to African countries, and appeals to the WTO to safe- with non-state actors to prepare the governments’ new guard the multilateral trading system and secure inter- global health strategy, and it has set up a parliamen- national supply chains. Finally, it emphasizes that the tary sub-committee84 dedicated solely to global health global community needs to work together to stabilize (the Subcommittee on Global Health of the German and rehabilitate the world economy and mitigate reces- Bundestag). Looking to the second half of 2020, Ger- sion. China expressly warns that decoupling and deglo- many’s presidency of the European Council is expected balization may divide the world88. The WTO shall there- to add another layer to its efforts to promote multilat- fore have all support to cut tariffs, remove barriers, eralism in the strengthening of global health systems. facilitate flow of trade, and keep international supply chains secure and smoothly functioning. China, in turn, has integrated global health and UHC goals into a very ambitious national health strategy. Its Finally, the EU has played an increasingly major role in wide-ranging health policy reforms under the Healthy UHC, e.g., through its Beating Cancer Plan, despite the China 2030 initiative also aim to achieve UHC by work- EU having limited health care responsibilities or com- ing to improve health care services and health insur- petencies from the treaties. With new ideas promoting ance coverage countrywide85. At a plurilateral and mul- new EU competencies in health, for example during the tilateral level, China has repeatedly called for efforts Merkel-Macron summit on May 18, 202089, and with to strengthen multilateral efforts aimed at improving the new EU4Health program, the EU may play an even global health, most recently in President Xi’s speech at more dynamic role in strengthening health systems in the 73rd WHA. President Xi called for a global response the future. Looking forward, industry is encouraging to COVID-19, proposed global reserves of medical sup- governments to push issues including digital health, bet- plies, and announced financial support for developing ter patient access to innovative diagnostics, treatments countries86. His call for multilateralism was followed and medicines able to support better access to care in by a white paper titled “Fighting Covid19: China in rural areas, and monitoring and treatment of elderly Action”87. The white paper elaborated comprehensively patients with chronic diseases. A more detailed posi- on China’s fight against the epidemic, but also further tion on UHC is included in the German Health Alli- outlined the steps to build a successful global commu- ance Position Paper on Global Health90. nity capable of providing health for all. In concrete terms, the white paper stresses the value of international 2. Pandemic preparedness and pandemic solidarity and cooperation, calling on the international response community to recognize WHO’s leading role in pan- demic response and to adequately fund the organiza- By definition, a pandemic is the worldwide spread of a tion. The white paper also emphasizes the importance new disease91. Effective pandemic prevention, prepar- edness, and mitigation policies therefore need to be 83 World Health Organization, Assessed contributions overview for all Member planned and coordinated internationally. Implement- States As at 31st December2019, 31.12.2019, p. 3,
24 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
of actions by the WHO are therefore vitally important. ingredients (APIs). This made it challenging to avoid The G20 can act as an additional forum for agenda set- disruptions to production of medicines and medicinal ting, provide political support and financing for coor- products, which in turn affected diagnosis and treatment dinating pandemic responses, and address trade and of patients. PPE is essential for maintaining hygiene financial issues such as customs measures and devel- standards in medical production facilities and labora- opment aid. The current COVID-19 crisis has shown tories. At a multilateral level, a number of countries are how quickly and severely international supply chains, now aiming for better crisis-preparedness by identify- national economies, and state budgets can be impacted ing emergency health care products and services prior when national governments fail to initiate necessary to a pandemic. To that end, industry requires that these pandemic responses. During the current crisis, the 73rd products should be subject to multilateral agreements WHA and Chinese President Xi in particular recognized that stipulate no ad hoc hoarding, as well as protection vaccines against COVID-19 as a global public good92, from export restrictions. President Xi’s proposal at the and industry has acknowledged the unique situation 2020 World Health Assembly to establish a global stock- created by the pandemic93. However, some stakehold- pile of essential medical products94 can be considered a ers have even gone so far as to question the intellectual strong signal for greater solidarity and for a more coor- property rights (IPR) system as a whole. It should be dinated global approach to humanitarian aid prepared- noted that strong IPR is a key foundation for availabil- ness. There is, however, a need to thoroughly discuss ity of treatment options against COVID-19 that are cur- stockpiling modalities with all relevant partners, includ- rently being studied and for development of candidate ing industry experts. Sudden and purely national stock- vaccines against COVID-19. IPR has been a driver in piling solutions could even be counterproductive and the fight against the current pandemic, not a barrier to it. endanger patient access. To that end, industry experts’ views on issues including product supply and supply The BDI and GHA have identified an initial first set chain management need to be taken into account, in of necessary adjustments and actions that should be order to prevent unintended trade divergencies or dis- addressed by the G20 and WHO. Naturally, those ruption in of trade in goods, to make good on supply adjustments cannot yet be viewed as the last word in commitments, and thus not cause supply difficulties terms of lessons to be learned, since at the time of writing that might impact patients. In the EU and around the the world is still in the midst of the pandemic. Instead, world, there is much discussion at the public and govern- a constant analysis of prevention and reaction meas- ment levels about overdependence on single countries ures and their effects should be undertaken, and fur- for strategic goods and reshoring of production facili- ther actions performed as necessary. ties and warehousing. A holistic analysis and integrated approach are required to find the right balance between 3. Maintain supply chains and the flow competing interests in this area. The health care sector of goods as a whole opposes an imposition of mandatory locali- zation of industries´ production sites and supply chains. Trade barriers There is a need to find alternative means for achieving better pandemic prevention and creating resilient inter- Trade barriers can significantly impede national and national supply chains that continue to function in the international efforts to mitigate a pandemic, because event of a crisis. When stockpiling is considered, inter- they may prevent much needed supplies from getting national public stockpiling seems more favorable and to where they are most needed. In the early stages of workable for a number of reasons. Sudden and purely COVID-19, a number of countries had imposed export national solutions are critical to patient access and sup- restrictions, most notably on personal protection equip- ply chain management. Initiatives such as the regional ment (PPE) for personnel and active pharmaceutical reserve of essential medical supplies by the ASEAN Plus Three are thus a welcome alternative to national
92 Globaltimes, Full text: Speech by President Xi Jinping at opening of 73rd World Health Assembly,
25 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
solutions95. In all of these areas, German, EU, and Chi- within the Schengen Area. While air and sea freight was nese government agencies are being encouraged to lay allowed to continue in China, there was significant dis- the groundwork through bilateral talks, while using the ruption to imports of medical goods by road and rail. G20, WHO, and WTO to promote this idea globally. In Some companies have stated this was due to additional addition, export authorizations should be introduced controls conducted at a small number of major entry wherever export restrictions are still being considered points at ports and airports. Open borders for goods are, so as to avoid interrupting intra-company trade. however, imperative for maintaining the flow of essen- tial goods, especially during a crisis. Governments have Medical goods imports should be facilitated to ensure understandably wished to impose stricter controls on better patient treatment and crisis-preparedness. This the movement of people coming into the country. As an can be achieved by reducing or eliminating tariffs unintended consequence, at some borders, entry bans on medical goods. Industry therefore welcomes Phil and measures such as temperature checks and preven- Hogan’s signal that the European Commission, in col- tive quarantining of lorry drivers have brought interna- laboration with the WTO, is willing to not only tem- tional trade to a complete halt. To ensure continuity of porarily liberalize tariffs on medical goods during the critical supply chains, government pandemic response pandemic, but also to advocate for a respective multi- measures would benefit from being developed in close lateral agreement to eliminate duties on global medi- collaboration with representatives from essential indus- cal trade96. From an industry perspective, a multilateral tries and their suppliers. These measures would include agreement between all WTO member states would be dedicated fast lanes for freight vehicles carrying medical the preferred option. The next best option would be equipment, API, and medical products, much like the an extension of the scope and membership of the zero- European Union’s green lanes for ensuring the flow of for-zero agreement. For both options, China can be an essential goods during COVID-19. One early lesson to important ally, as it most recently repeated its call for be learned from the crisis is that criteria for classifying the removal of trade barriers in its white paper on fight- such freight should be elaborated on and agreed upon ing COVID-19. Countries that envision creating stra- ex ante. Any such agreements should be aimed at oper- tegic stockpiles of medicinal products at the national ations at the G20 level and potentially be inserted as or international levels should take advantage of indus- an annex to the WTO Trade Facilitation Agreement— tries’ capabilities and expertise in international supply ideally elaborated on in close consultation with WHO. chains. Emergency plans drawn up unilaterally by gov- In addition, consideration should be given to digital ernments may fail to reflect actual industrial capacity. testing solutions that could potentially replace current To avoid this scenario, industry needs to be involved border practices. in designing any such plans. 4. Strengthen multilateralism and Border controls collaboration
By shutting down domestic and international borders World Health Organization (WHO) as part of their COVID-19 responses, governments have imposed severe constraints on global supply chains. A pandemic requires a coordinated multilateral response. Stricter border controls have meant that road trans- With its global reach and expertise, WHO plays a cru- port in particular has been backed up, with traffic jams cial, central role in coordinating member states and several kilometers long, or even denied entry97—even collaborating with partners in industry. WHO’s role includes establishing ongoing transparency with respect 95 Association of Southeast Asian Nations, Joint Statement of the Special ASEAN to information on novel pathogens, with the aim of ena- Plus Three Summit on Coronavirus Disease 2019 (COVID-19),
26 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
pooling of resources and information across sectors member states100. In order to allow new pathogens to in order to make diagnostics, therapeutics, and vac- be detected as early as possible, it should be a common cines available. One example is the recently established goal to extend this network’s coverage to all WHO mem- Access to COVID-19 Tools Accelerator98, a direct result ber states. If evidence of a pandemic is detected, tar- of WHO’s leadership and ability to bring together rele- geted and large-scale testing needs to be rapidly avail- vant organizations on a global scale. This enables indus- able and deployable. To this end, rapid development try (a founding member of this new coalition) to make and availability of diagnostics for new infectious dis- valuable contributions to the development of diagnos- eases should be a common goal and facilitated within tics, therapeutics, and vaccines. Industry-specific initi- the network. Collaboration with specific international atives, such as repurposing manufacturing facilities to organizations such as FIND101 would further contrib- produce disinfectant and protective equipment, plan- ute to that goal. The ability and agility to react and com- ning to reserve and re-dedicate production facilities for bine knowledge, capabilities, and forces across borders the time when a vaccine or effective treatment is found is key to combating pandemics. Where and how a spe- or opening up compound libraries to speed up R&D cific virus or disease will spread is by definition unpre- of vaccines and treatments99, are also making impor- dictable. This challenge will always require expertise tant contributions to overall efforts to combat the pan- from the business world. In addition, the capacities and demic. Together with necessary extra facilities, addi- personnel needed for testing large parts of the popula- tional testing capacity, and effective isolation of newly tion should be assessed, trained, and tested prior to and infected individuals, these efforts will enable govern- in the event of an outbreak, ideally with the support of ments to implement alternative strategies for exiting public-private partnerships. In a similar vein, consider- or coping with the current arduous lockdowns. These ation should also be given to regulatory requirements lockdowns pose a major challenge to the achievement for global use and compatibility of contact-tracing apps. of other public health goals, such as meeting social and economic needs. Once a certain degree of protection 5. Deploy diagnostics, therapeutics and for people’s health and control in providing life-sav- vaccines ing health care treatments is ensured or regained, this rebalancing of interests will therefore make an impor- Facilitate clinical trials tant contribution to public health goals, mitigating the recession and safeguarding the health and prosperity Overcoming a pandemic requires new treatments. Clini- of people in the future. It is important that all coun- cal trials for therapeutics and vaccines therefore need to tries do their utmost to strengthen WHO. This requires commence quickly and be held back by a minimum of a transparent, long-term approach and will maximize bureaucracy, while still maintaining quality and patient WHO’s ability to fulfil its role of initiating innovation safety. During a pandemic, the ability to conduct ongo- and coordinating research. ing and new clinical trials is impeded by measures such as social distancing and a reluctance among trial partic- Detect and diagnose ipants to visit hospitals. Governments therefore need to prepare frameworks that include digital approaches to Before and during a pandemic, early detection and clinical trials, such as remote monitoring. These frame- diagnosis help to trigger rapid preventive and response works should be extended to cover global and elec- measures. Systems such as WHO’s Global Influenza tronic licensing of any products that have undergone Surveillance and Response System act as global alarm successful trials. These measures obviously require tre- systems and are therefore critically important. This sys- mendous amounts of coordination. WHO’s Solidarity tem encompasses Germany, China, and 113 other WHO
98 World Health Organization, Access to COVID-19 Tools (ACT) Accelerator,
27 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
Trial for COVID-19102 treatment is a promising first step . Insurers and other private sector organizations towards much needed multi-stakeholder collaboration. have developed mobile phone apps to help patients recognize COVID-19 symptoms and learn about Fundamental steps for overcoming a pandemic include treatment options. consolidating clinical knowledge about a new pathogen and making it available to health authorities around the . Tools such as artificial intelligence are being used globe including early information and specimen shar- to diagnose COVID-19 virus, track disease develop- ing, virus sample labs, global platforms, and produc- ment, investigate possible treatments and vaccines, ing interim treatment guidelines. These tasks are car- and accelerate data collection for clinical trials. ried out by WHO103. . Policy makers are benefiting from epidemiologi- Facilitate production and distribution cal models developed using advanced data analy- sis, while maintaining high standards for data secu- Without a treatment or vaccine, many governments have rity and privacy. responded to the COVID-19 pandemic with non-phar- maceutical measures such as social distancing, hand Recent advances in digital health technologies improve washing, coughing etiquette, and mask wearing. Some patient care in terms of outcome, access, and costs. of these have given rise to their own political, economic, Broader use of digital health tools can benefit all stake- and social challenges. A medical breakthrough is a key holders in the health care system, including patients, requirement for lifting social distancing and mask-wear- government, doctors, health care providers, medical ing requirements. Once developed, diagnostics, treat- goods manufacturers, and other health care stakehold- ments, and vaccines will require rapid, large-scale pro- ers. Data analysis tools, for example, can improve track- duction and distribution networks. These networks will ing of patient outcomes and the value of treatments require multilateral, multi-industry coordination, with delivered. Remote diagnosis, monitoring, control, train- government financial support to enable industrial tech- ing, and maintenance have been essential tools dur- nology, facilities, and expertise. The G20 should there- ing the current pandemic and will remain essential fore agree to provide for tax and investment facilita- for building up resilience. Better tracking of patient tion when production, warehousing, and/or distribution records can reduce unnecessary health interventions, sites are set up or existing sites are repurposed. while improved use of telemedicine can reach margin- alized and remote communities. 6. Digital health Some challenges remain regarding the adoption and Digital health tools can contribute to achieving univer- better use of new digital health tools. In particular, the sal health coverage (UHC), improving global health access to and ownership of health care data must be security, and advancing patient-centered health care. valued. This includes the need to safeguard patient pri- The global response to COVID-19 has also shown the vacy, data security, regulatory uncertainty (which can potential of digital health tools as pandemic response reduce the usefulness of digital platforms), and incon- measures. In recent weeks, for example: sistencies in approaches to digital health taken by dif- ferent countries and health care stakeholders. . Health care providers have turned to telehealth and telemedicine tools for diagnosing COVID-19 patients G20 and WHO leadership in digital health safely and remotely. The G20, as a forum for agenda-setting, and WHO, with its greater capacity for policy implementation, can com- plement each other’s efforts on digital health. At the 102 World Health Organization, “Solidarity” clinical trial for COVID-19 treatments, https://www.who.int/emergencies/diseases/novel-coronavirus-2019/global- time of writing, WHO has published its draft Global research-on-novel-coronavirus-2019-ncov/solidarity-clinical-trial-for-covid- 19-treatments (accessed on 22.07.2020). 103 World Health Organization, Country & Technical Guidance - Coronavirus disease (COVID-19),
28 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
Strategy on Digital Health 2020–2024104. Industry is still Establish appropriate data security: Establish assessing it, but overall the comprehensive framework appropriate data security and privacy policies that for governance, cooperation, and alignment of WHO safeguard digital information, without preventing the stakeholders on digital health has been well received, cross-border flow and use of health data for the pur- as has the respect the draft strategy pays to regional pose of research and development and innovation. and national circumstances. However, industry would appreciate a clearer vision for how WHO will collabo- Support research and innovation: Support contin- rate with other multilateral organizations such as WIPO uous access to scientific discoveries and facilitate and WTO. appropriate access to national health data sets to support research and innovation. The BDI and GHA encourage the G20 (and in the long term potentially also WHO) to promote use of digital Develop joint language: Develop a common lexi- tools for diagnosing and treating patients. It would serve con to facilitate further adoption of digital R&D tools to enhance the broader health care ecosystem, remove and technologies or start to develop one before the policy barriers that hinder use and adoption of digital next G20 summit. tools, leverage health data to improve care, and optimize use of health data in regulatory systems. This would Promote the value of digital health solutions: improve patient access, achieve more equal access, bet- Advocate to adopt reimbursement systems to appro- ter meet patient needs, improve preventive care, and priately fund new digital health tools, such as pay- enhance efficiency. Digital learning and remote educa- ments for telemedicine and digital therapeutics. tion of students and professionals can also be enhanced. Specifically, the G20 can: Encourage new technologies, R&D, and collab- oration: Promote an innovation ecosystem that Recommendations on Digitalization: encourages new technologies, R&D, and collabo- ration in the digital health sector, including innova- Facilitate adoption of digital health tools: To facil- tions related to deployment and operationalization itate adoption of digital health tools, push for regu- of products and services. latory consistency, also by establishing transparent and fair regulatory frameworks for use of such tools Engage with business: Create a mechanism for and guidance governing their use. These should engaging with business to enhance pandemic pre- include suitable adaptive measures to account for paredness and leverage national information centers the dynamic nature of new technologies. for disease surveillance, diagnostics, virtual hospi- tals, and digital therapeutics. Include industry: Include industry in discussions on regulatory and other policy barriers that impede adoption of new health technologies. 7. Health development cooperation
Bring together digital technology experts: Con- Achieving UHC requires a collective effort, especially vene regular forums to bring together digital tech- in developing countries in Southeast Asia, Central Asia, nology experts from different sectors and indus- the Middle East, Africa, and South America. Improved tries to consider issues, emerging trends, and efforts for strengthening health systems should be con- policy recommendations. sidered a joint undertaking on the African continent, which has some of the fastest growing economies but Ensure interoperability: Ensure cross-border inter- also the poorest countries and fast-growing popula- operability throughout health care systems. tions. This applies especially to the EU and China105, the biggest lenders to African governments. Thereby, it
105 Brookings, Competing in Africa: China, the European Union and the United States, 104 World Health Organization, Draft global strategy on digital health 2020–
29 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
is important to consider that access to health care not is a shared understanding of sustainable development only serves to better meet the basic health needs of indi- aid and international cooperation. viduals, it also makes an important contribution to the economy. Health centers and hospitals provide sustain- The EU, Germany, and China should therefore also use able jobs for highly skilled people. Because large num- their influence in collaboration with the G20 to strongly bers of women are employed in health care, especially support the aforementioned initiatives for health, trade, in care delivery roles, efforts to strengthen health sys- financial matters, and initiatives for peace, to help tems also boost gender equality106. In African countries, end intra-African conflicts that lead to high levels of where there is a large divide between larger cities and migration and erode health care provision. Achieving more remote areas, digital and telemedicine solutions SDG3 will require access to health care, good health offer an opportunity to deliver health care to everyone. literacy in all communities, ongoing training to improve skills of medical staff, modern health infrastructure, The EU, Germany, and China all have a strong pres- and access to innovative diagnostics and treatments. ence across continental Africa. President von der Leyen This applies particularly to the African continent. The has recently vowed to boost Europe’s geopolitical role, EU and China can strengthen Africa’s health care sys- including with regard to strengthening health systems tems. However, it is important that this be done on around the globe107. China and the EU therefore have a level playing field for all stakeholders. The EU and a particular responsibility to support African govern- China share the need to strengthen health care systems ments in their efforts to modernize their health infra- in their partner countries and regions, and to collabo- structures and create health systems that guarantee rate through the WHO and through trilateral EU-Chi- universal access to health care. It is also their respon- na-African partnerships where appropriate and useful. sibility to convince governments that investing in meas- ures to strengthen health systems contributes to eco- Recommendations for the overall nomic strength. This can only be achieved if the EU multilateral agenda: and China are in alignment with international organ- izations such as WHO. In that regard, the G20’s Debt Strengthen multilateralism: To achieve the Service Suspension Initiative108 was a clear signal for health-related goals of the UN SDGs, national and joint action in development cooperation. Further- multilateral efforts need to complement each other. more, China only recently stressed its commitment to Germany, the EU, and China should assume a strengthening development cooperation, particularly leading role by jointly advocating for these goals in with Africa. Particularly in the Chinese government’s WHO, the G20, and WTO. The Global Action Plan white paper on COVID-19109, China calls on multilat- for Healthy Lives and Wellbeing strengthens collab- eral organizations including the UN, WHO, the IMF, oration among multilateral health organizations to and the World Bank to provide emergency aid to Afri- accelerate progress on the health-related SDGs at can countries. It also calls on developed countries to the country level. Progress should be reported on take on greater responsibility, play a bigger role in the and critically discussed at established global health global battle, and provide more material, technological, forums like the World Health Summit in Berlin. and personnel support to their developing counterparts, especially in Africa. A further important requirement Support and enable WHO: WHO is key to advanc- ing all health-related global goals such as UHC and 106 World Health Organization, Gender equity in the health workforce: Analysis of 104 pandemic prevention and response. German and countries, 03.2019.,
30 Position | Health Care | China Advance global health Sino-EU and Sino-German Cooperation in Health
Enhance health-related action within the G20: The and costs. Moreover, the COVID-19 pandemic has G20 are key to advancing a coordinated pandemic revealed that digital health measures can replace and response, particularly with respect to all trade bar- improve existing pandemic response measures. Ger- riers that affect the resilience of international sup- many and China should promote these benefits and ply chains. These include tariffs, export restrictions, work to promote investment in digital health glob- and invasive border controls. Also, the competence ally and enable a regulatory framework that facili- mix provided by ministers of health and finance will tates use of these measures during emergency and be key to advancing important health budget ques- non-emergency situations. tions and possible action on customs elimination for medicinal goods. Among the urgently needed actions Advance cooperation—international and intersec- in the run up to the Saudi Arabian G20 presidency, toral—in other global health topics, including devel- G20 members should call for a worldwide stop to opment cooperation, e.g., with Africa. Here, a com- proliferating export restrictions. They should also mon understanding on the grounds of sustainable move to quickly eliminate all customs duties on med- development aid, a needs assessment, and leveled ical equipment, diagnostics, and medicines. international cooperation are essential before fruit- ful collaboration can take place. Since improvement Promote Digital health: Digital health tools have of public health is always an interdisciplinary task, particular relevance to global goals for improv- cooperation should be across sectors and include ing health equity, achieving universal health cov- science, civil society, politics, and the private sector. erage (UHC), improving global health security, and advancing patient-centered health care. They can improve patient care in terms of outcome, access,
31 Intensify dialogue on IPR in 06 health care Intellectual property Regulations
Ensure intellectual property protection R&D across all therapeutic areas takes on average even and proper implementation 14 years.111 In addition, patent rights are granted for 20 years, beginning at the time the application is filed. Protecting intellectual property is key when building Given that filing a patent is required in the earliest days an innovation-driven economy. And for a large pro- of discovery, the term of protection during which the portion of health care companies, intellectual property product can be marketed for pharmaceuticals is often rights (IPR) are the foundation of their business mod- less than half of the total patent term. If that is not the els. They ensure that developers and manufactures have case, for example, supplemental protection certificates an incentive to invest the significant resources required or similar mechanisms compensate for some time. Fur- to develop innovative products. To ensure sufficient thermore, although IP protection is for a limited time incentives for these risky investments, patents provide period, the benefits are long term, and the goal of patent a time-limited right to exclude others from making, law is to transfer innovation to the public by making the using, or selling an invention. This is particularly criti- details of patented inventions broadly available. It does cal for sectors with long innovation cycles that require so by requiring a patent application to contain informa- large and risky investments. In some cases, such as in tion that is sufficient to enable any “person skilled in the pharmaceutical sector, these cycles normally take the technological area to which the invention pertains eight to twelve years110. According to some sources, drug
110 Bundesverband der Pharmazeutischen Industrie, Pharma-Daten 2019, 11.2019, 111 Paul SM, et al. How to improve R&D productivity: the pharmaceutical industry’s p. 13,
32 Position | Health Care | China Intensify dialogue on IPR in health care Sino-EU and Sino-German Cooperation in Health
… to make and use the [invention].”112 This contrasts to . The current state of IP protection varies other forms of IP protection, such as trade secrets, which across sectors: can allow companies to not disclose such information. Critically, this disclosure serves an important societal – Examples from the pharmaceutical sector: The purpose. Because the information has been made avail- Chinese government is strengthening the incentive able, a patent in any given field draws on the existing system for the pharmaceutical sector and has pro- body of scientific knowledge. At the same time, it adds posed positive reforms to IPR115, which now need to it in a way that others may use and benefit from in to be implemented and enforced. Patent term exten- their own research. sion (PTE), regulatory data protection (RDP), and publication of an Orange Book in particular are gen- Core challenges: erally positive proposals. The Orange Book is a list of drugs that the U.S. Food and Drug Administra- . Enforcement: There needs to be stricter enforcement tion (FDA) has approved as both safe and effective. of existing intellectual property rights in China. While It contains information on patent and regulatory IP protection offers potential for further improve- exclusivities pertaining to a product. In addition, ment, some progress has been made on IP legislation discussion of a patent linkage system is a step in in the health sector. Enforcement needs to be tight- the right direction. Meanwhile, ongoing works on ened, however, and some legal mechanisms need to Chinese patent law and implementation prepara- be strengthened. To prevent intellectual property vio- tion for the US-China Phase I Agreement, the IP lations, these include faster injunction procedures Action plan published in April 2020, foresee 133 and more effective enforcement of claims for dam- concrete measures. These include: revising the pat- ages that have a genuine deterrent effect. The recently ent law to strengthen pharmaceutical patent pro- published 2020–2021 IP Action Plan and China’s tection and provide patent term extension; revis- People’s Court Opinion therefore are welcome signs ing the Patent Examination Guidelines to permit and measures to strengthen IP enforcement. The IP applicants and patentees to provide supplemen- Action Plan from China’s National Intellectual Prop- tal data (during patent application prosecution as erty Administration (CNIPA) was released on April well as during invalidation proceedings), and estab- 20, 2020113. With its 133 forthcoming measures, it is lishing an early resolution mechanism for pharma- designed to implement the CPCCC / State Council ceutical patent disputes by October 2020. From a November 2019 Opinions on Strengthening IPR Pro- pharmaceutical perspective, it is important to deter- tection and to serve as China’s IP implementation plan mine a clear timetable for introducing implementa- under the Phase One trade agreement. In addition, the tion rules for PTE and RDP, and protection stand- People’s Court Opinion released on April 21, 2020114 ards. For RDP protection, in particular, China so called for “comprehensive strengthening of judicial far has still not fully implemented its prior com- protection of intellectual property rights”, including mitments. For some innovative drug products, it a call to safeguard the legitimate rights and interests had not provided the six-year protection period of the rights holders, enhance practical effects and of RDP against unfair commercial use for clin- effectiveness of judicial protection, and strengthen ical testing and other data that it committed to trial infrastructure. at its WTO accession in 2001. Another challeng- ing situation is that generic companies are able to obtain marketing authorizations before patent expiry, whereby generic companies launch generics
115 Among those were in May 2017, the former CFDA´s draft document Encourage Innovation of Drugs and Medical Devices, Rights of Innovators (Document No. 55). In October 2017, the Central Committee of the CPC and the State Council 112 United States Patent and Trademark Office, General Information Concerning jointly published the document Opinions on Deepening the Reform of Evaluation Patents,
33 Position | Health Care | China Intensify dialogue on IPR in health care Sino-EU and Sino-German Cooperation in Health
at risk, but no effective legal means are at hand article 57 of the draft bio security law116 opens the for the rights holder, because injunctions are not door to a forced technology transfer. The Chinese gov- available on short notice and not provisionally ernment should devise detailed regulations in order enforceable. They are only enforceable when the to prevent forced technology transfers. second instance has passed its sentence. Evaluation – Examples from the MedTech sector: Major chal- lenges remain in other sectors, such as medical The health care industry is encouraged by recent poli- devices, with a lack of proper enforcement of exist- cies that incentivize innovation and strengthen IPR pro- ing intellectual property rights. Counterfeit med- tection. Establishing a truly innovation-friendly envi- ical devices still violate the IPR of many medical ronment, however, requires a functioning multi-level device manufacturers, stifle innovation, and pre- protection mechanism that enforces existing IPR. vent provision of high-quality health care. Recommendations on Intellectual Property Rights: . Implementation and consultation: To ensure the practicability of new measures, proposed IPR should Elaborate clear IPR implementation rules, for be implemented swiftly and in consultation with example for PTE and RDP, and refine standards industry partners. to match EU standards on RDP (8+1+1); establish that patent infringing products are not traded on . Future-proof IPR: Intellectual property rights in China the market, for example through an effective pat- should be updated to reflect the requirements of new ent linkage system. technologies such as AI, Big Data, and biometrics. As China has announced the amendments to Patent Enforce existing IPR more consistently and strictly Examination Guidelines related to AI inventions, effec- and strengthen specific rule of law mechanisms such tive as of February 1, 2020, health industries should as injunction procedures. now be given the opportunity to comment on accom- panied implementation work. The Chinese govern- Review policies that indirectly cause forced tech- ment should proactively include the health industry nology transfer and ensure that they reflect rapid to ensure that all relevant technological development technological advances. in the health sector is sufficiently considered. Increase opportunities for industry to participate . Forced technology transfer: De facto forced tech- in the policy making process and contribute to nology transfers often happen through joint-venture formulating and implementing IP protection laws requirements, licensing, or approval processes. With and regulations. increasing digitization, China’s restrictive cyber secu- rity regulations are of particular concern in this respect. China’s new foreign investment law (2019) specifically 116 Chinalawtranslate, Biosecurity Law (Draft) (Second Deliberation Draft),
34 Cooperate on regulatory policies 07 Ensure internationally harmonized, smoothly and Encouraging the Innovation of Drugs and functioning approval procedures Medical Devices117.
In the highly regulated health care sector, national – MedTech: The NMPA is moving forward with gen- regulatory approval procedures ensure the quality of erally positive reforms to medical device super- products on the market. They play a critical role in vision by announcing amendments to Order No. determining if an innovative medical product able to 680. Under the NMPA predecessor, testing insti- improve diagnosis and treatment will become availa- tutes in 2017 nevertheless “… received insufficient ble to patients. Harmonized quality and approval proce- funding, causing serious delays to the registration dures can facilitate simultaneous product development of medical devices.”118 The amendment allowed programs worldwide and ensure quicker availability of for use of alternative testing facilities or self-test- products across markets. In addition, smart regulation, ing reports, a measure that was warmly welcomed well-staffed regulatory authorities, and well-trained per- as help for remedying this serious industry con- sonnel help prevent delays in approving much needed cern. However, further clarification of the concepts new medical products. Better regulatory approval is at set out in the amendment is required, e.g., which the heart of the Chinese government’s reforms. “qualified” testing institutes are recognized and the criteria that self-testing reports need to meet. Core challenges: Furthermore, implementation of the amendment is not yet complete. . Building capacity: In addition to enormous capac- ity building efforts, the Chinese government and the – Pharma: Initial achievements include an impres- National Medical Products Administration (NMPA) sive reduction in the former China Food & Drug have taken a number of positive, much needed steps Administration´s (CFDA’s) drug application toward creating a more smoothly functioning regula- tory process. This includes the Opinion on Deepen- 117 State Council, Opinion on Deepening the Reform of the Review and Approval ing the Reform of the Review and Approval System System and Encouraging the Innovation of Drugs and Medical Devices, www. gov.cn/gongbao/content/2017/content_5232362 (accessed on 17.07.2020). 118 European Union Chamber of Commerce in China (2018), Healthcare Equipment Working Group, pp. 240, https://www.europeanchamber.com.cn/en/ publications-archive/727/Healthcare_Equipment_Working_Group_Position_ Paper_2019_2020. (accessed 29.5.2019).
35 Position | Health Care | China Cooperate on regulatory policies Sino-EU and Sino-German Cooperation in Health
backlog by the end of 2017. The NMPA and the orphan diseases. The recently published draft reg- European Medical Authority (EMA) have also istration guidelines and other documents released started a structural exchange that should help to by the NMPA and the Center for Drug Evalua- train more personnel, accelerating approval pro- tion (CDE) that seem to track the Regulations cedures. The new Drug Administration Law from on Human Genetic Resources (HGR regulations) December 2019 finally codified many initiatives propose new rules for handling human genetic from the major health care reform dating back resources122.. While data protection and privacy to 2015, with measures to continuously encour- are an important aspect of conducting clinical tri- age innovation in the pharmaceutical industry119. als, the HGR regulations seem to hinder multi-re- gional research and clinical trials. This is because – Digital: Big Data promises to improve patient care, they currently require a multi-layer, NMPA and but digital health technology regulations have not hospitals’ ethics counsel approval before appli- yet been fully elaborated. This jeopardizes smooth cants for an international collaboration may sub- application procedures and a clear vision for the mit an HGR application to commence their study. use of patient data. There is a need to acceler- This applies particularly to instances where for- ate implementation of initiated policies to allow eign companies are involved. During the process, alternative testing methods for medical products. questions on data storage and transfer and on IP rights related to ownership and patent rights . Circular economy: It is still not possible to sell are negotiated. Also, ownership of patent rights imported refurbished medical devices in China120, may not be decided purely between Chinese and though remanufacturing is possible within certain foreign companies under the current HGR reg- parameters. Refurbished products, however, are cru- ulations. Instead, Article 24 of the HGR regula- cial for a sustainable society, and China should be tions requires that parties jointly patent inven- encouraged to play its part to create a global refur- tions arising from their collaboration. And the bished economy. The Chinese regulatory framework Office of Human Genetic Resource Administration therefore should be improved.121 (OHGRA) will not approve a clinical trial unless it agrees with the intellectual property agreement . Clinical trials: There are several positive develop- between the parties. ments in the attempts to harmonize the Chinese reg- ulatory environment with the EU’s, however there – MedTech: The Chinese Good Clinical Practice are multiple areas that still require improvement (GCP) and requirements for clinical evaluation and cooperation. reports (CER) are still not fully harmonized with international regulations, delaying market access in – Pharma: China improved clinical trial approval China and making international multi-center stud- timelines via IND scheme, introduced and encour- ies difficult. Although there are few technical dif- aged multi-national companies joining in a mul- ferences between GCP and ISO-GCP, the clinical ti-regional clinical trial (MRTC) from the early trial could still take five to six months longer than development phase. The reforms introduced serve, an equivalent clinical trial in the United States or for example, to streamline the new drug applica- the EU. This is mainly because of the government’s tion (NDA) review procedure, parallelizing some administrative processes and requirements on eth- time-consuming processes with the aim of improv- ics committee approval, the custom clearance of ing review and approval efficiency, and achieving trialed devices, and clinical trial filing in the Minis- faster approval for drugs for urgent treatment of try of Science and Technology. In a recent positive medical needs that have not been met and for development, the NMPA released the guidance on acceptance of overseas clinical trial data. Among 119 China Law Insight, Major Changes in the Newly Revised Drug Administration further positive developments, the NMPA treated Law,
36 Position | Health Care | China Cooperate on regulatory policies Sino-EU and Sino-German Cooperation in Health
to the current CER guidance. And the MDR will Inspection Co-operation Scheme (PIC/S)126. This formally enforce CER from May 2020. Finally, the clearly indicates China’s efforts to achieve har- establishment of a clinical trial and static team monization in areas such as clinical trials, regu- in June 2019 at the NMPA has enabled knowl- latory approval, and standards for Good Manu- edge-sharing on CER and clinical trials with qual- facturing Practice (GMP) for medicinal products ified manufacturers of medical devices. for human or veterinary use.
. Harmonization: The Chinese government has . Quality and safety standards for generics accorded high priority to membership and harmo- and products: nization endeavors in some international organi- zations. There are, however, important differences – Pharma: The Center for Drug Evaluation (CDE) between sectors: has continuously advanced and pushed the generic drugs quality consistency evaluation (GQCE) to – MedTech: Within the framework of the Inter- improve generic quality. We need equal treatment: national Medical Device Regulators Forum There are approval processes that can discrimi- (IMDRF)—the highest international regulatory nate against foreign companies. In the past, prod- body—the Center for Medical Device Evaluation uct lists favoring local producers have prevented (CMDE) (as a part of NMPA) has started a series installation or guarantees of a level playing field of international initiatives and hosted the IMDRF for all competitors. Such policies should be dis- in 2018 to distribute CER experience and harmo- continued to allow fair competition, which will nize CER requirements with the EU and the FDA. ultimately benefit Chinese patients. Streamlining mandatory standards is also the aim of the standardization law that took effect in Janu- – MedTech: Assistive technologies such as pros- ary 2018123. Engineering and health standards are thetics components are not classified as medical exempted, however, and product registration with devices, leading to a highly unregulated sector the CMDE still requires separate approval from the jeopardizing patient safety. China Center for Disease Control and Prevention (CDC) e.g., for X-ray machines and CT scanners, Evaluation: though there are large overlaps with international standards.124 Conversely, some requirements are The health care industry welcomes and supports the contradictory, as updated international standards Chinese government’s goal of implementing faster, more are translated into national standards too slowly. transparent regulatory approval processes. Examples In addition, adoption of international standards include the IND scheme introduction into China and is still slow, and the CMDE is not yet participat- faster clinical trial assessment and approval for essen- ing in all organizations that are developing inter- tial drugs and other much needed products for diseases national standards in this field.125 such as heart disease.127 Further reforms now need to be ensured through stringent implementation and by – Pharma: China has joined the International Coun- enhancing capacity building. To align with international cil for Harmonization of Technical Requirements standards, the Chinese government should also seek for Pharmaceuticals for Human Use (ICH), was to expand the harmonization process, including in the elected to the ICH Management Committee, and is medical devices industry. striving to gain membership in the Pharmaceutical
123 Standardisation Law, NPC, 2017, www.npc.gov.cn/npc/xinwen/2017-11/ content_2031446 126 “A New Direction for China’s Pharmaceutical Management Model”, in Eurobiz 124 European Union Chamber of Commerce in China (2018), Healthcare Equipment Online, 01.12.2017,
37 Position | Health Care | China Cooperate on regulatory policies Sino-EU and Sino-German Cooperation in Health
Recommendations Regulatory Policies: Promote globally harmonized standards and trans- parent, predictable, consistent science-based rules Continue the process of simplifying approval pro- in all health care sectors to improve product registra- cedures: Further accelerate standard approval pro- tion and regulatory approval, including, for example, cedures and broaden the range of fast-track approval harmonization of GCP with international standards. processes for medical products that are urgently needed. Continue implementation of reforms in order Enable transition to a circular economy: To enable to ensure timely access and treatment for Chinese efficient use of resources, import and sale of refur- patients. International standards should be trans- bished medical devices should be allowed. lated into national Chinese standards quickly and consistently. Clarify and implement the amend- No discriminatory criteria: Multinational medical ments to the supervision of medical devices. Deepen device companies face discriminatory approval cri- reforms for introducing innovative modes of super- teria compared to Chinese companies, even in the vision in order to regulate digital health technology. case of Chinese subsidiaries. This includes a require- ment for approval in the manufacturer’s home coun- Enable data use: Enable secondary use of data for try, even though most innovative medical devices no health and research purposes. Promote harmoni- longer require market approval in their home coun- zation and strengthen the quality of real world data tries.128 No Chinese drug approval prioritization for to better inform regulatory and health technology first approval in China. assessments decision-making.
Further enhance capacity building in organizations such as the CDE and NMPA, including through twin- ning and structural exchanges with the European Medicines Agency (EMA).
Promote precision medicines: Biomarkers analysis and patients’ self-tracking via Intelligent Operating System Apps (IOs) should be given the same treat- ment as orphan drugs and rare diseases, because patient populations are small and there is a need 128 European Union Chamber of Commerce in China (2018), Healthcare Equipment Working Group, pp. 242,
38 Conduct reimbursement and health technology assessments (HTA) 08 Endorse a reimbursement policy that guaran- to incorporate the interests of patients, health care pro- tees up-to-date treatment and care fessionals, payers, and policy makers and manufactur- ers. In this respect, HTA is a means to improve patient The Chinese government has decided that the key to care, aid physician decision-making, and enhance the achieving health equity in the country and ensuring functioning of the health care system as a whole. harmony in society is to provide broader service and increase financial coverage for treatments. Healthy While countries differ in their use of HTA, industry China 2030 also expressly aims to provide better pre- believes that the HTA process must be scientifically vention, screening, diagnosis, treatment and care.129 The sound, transparent, consistent, and of practical use in Chinese government has therefore started to review its both policy-making and clinical practice. An HTA sys- reimbursement models. For innovative German and EU tem has not been implemented in China to date131. Since health care companies, this creates new opportunities. 2019, however, the Chinese government has been pre- Their innovative products now have a chance to be reim- paring to table a legislative proposal for drug evaluation. bursed and be made available to more patients in China, unless price pressure increases to an extent that innova- Core challenges: tion is no longer valued or unless local preference rules are introduced that threaten to prioritize Chinese origin, . Valuing innovation and guaranteeing differentiation: as recently found in e.g., the draft administrative meas- For medical products, it is important that patients ures for the National Reimbursement Drug List130. The have access to the latest innovations with the high- Health Technology Assessment (HTA) refers to the pro- est potential for improving health outcomes. Inno- cess of using evidence to evaluate the clinical efficacy/ vation must be valued in both the reimbursement effectiveness, cost-effectiveness, and broader impact of and HTA system. In the past, this has not always health technologies on patients and the health care sys- been the case. tem. The evaluation of a technology’s value should seek
129 National Health Commission of the People’s Republic of China, Development of China's Public Health as an Essential Element of Human Rights,
39 Position | Health Care | China Conduct reimbursement and health technology assessments (HTA) Sino-EU and Sino-German Cooperation in Health
– Pharma: In the last three years, major progress China for the first time. Chinese think tanks and has been made in offering innovative medicines government authorities are therefore looking for to patients and increasing access. Before 2017, input and information from other HTA experi- most innovative drugs were not reimbursed by ences abroad. It is not yet clear whether this will the public health care system and thus were not enable truly innovation-friendly assessments, or accessible for most patients on the Chinese mar- if precision medicines in particular will be appro- ket. The emphasis in the previous update of the priately valued by the new reimbursement sys- National Reimbursement Drug List (NRDL) in tems. It is also unclear whether industry input is 2009 had been on me-too, biosimilar, and biobet- well considered early on in the design and con- ter products. Since 2017, however, there has been sultation phases of HTA, even though this is key rapid progress on market access. Over a two-year to ensuring solid insights into current and future period, the NRDL has been updated three times scientific development. with dozens of new active ingredients, including one list with 17 oncology drugs132 to support the – MedTech: Single patient-use implantables may be national oncology strategy. The 2018 guidelines listed for reimbursement, but reimbursement dif- on the Reimbursement Standard Payment Policy fers greatly between provinces. In addition, single introduced systemic changes to the process for list- patient genetic tests for selecting targeted tumor ing drugs and negotiating the inclusion of drugs therapies are not yet reimbursed by the public on the NRDL. The recently published draft on health care system. This is essential for enabling the administrative measures for the NDRL seek patients to access modern precision medicine, to clarify the important value assessment process, however, and for determining which treatments however, for the time being they still lack clarity are appropriate for them. Furthermore, challenges and innovation-access friendliness in some points. remain as innovative specialized medical prod- For example, despite the provision that NHSA ucts are often not priced differently even though will establish scope and specific conditions for their different qualities should be reflected in their the current year’s NRDL update, there are no prices. There is, for example, no price differenti- provisions yet to enable companies to apply for ation for diagnostic reagents, even though they reimbursement once a new medicine has received vary greatly in quality, making price differentia- marketing authorization from NMPA or to allow tion essential133. Finally, the data sets generated contracts to be renegotiated to include new indi- can also help in further developing and optimiz- cations. Also, the draft measures suggest that dur- ing treatments. ing the two-year NRDL contract renewal period, local medical institutions can conduct secondary . No local preferences: The proposed administrative negotiations to achieve prices below the nation- measures currently suggest that qualified innovative ally negotiated reimbursement payment standard products with “independent intellectual property” (RPS) and that health care security departments should be prioritized for inclusion in the NRDL. shall adjust the RPS at the end of the contract “Independent intellectual property” has been defined period. Those practices would break with the 2019 by the Ministry of Science and Technology as that NRDL policy. They also could lead to important developed and owned by a Chinese legal entity or price erosion, reduce predictability in the mar- Chinese national. We seek clarity on this statement ket, and risk undermining China’s goals of foster- given that country-of-origin preferences would be ing an innovative biopharmaceutical industry and inconsistent with fair and non-discriminatory reim- becoming an early launch destination for innova- bursement listing policies. tion that benefits Chinese patients. Preparatory work has finally started on setting up HTA in Evaluation:
133 European Chamber of Commerce in China (EUCCC), “Healthcare Equipment Working Group”, European Business in China Position Paper 2018/2019, pp. 132 RASLSS, The Changing Face of Regulations and Market Access in China, 248,
40 Position | Health Care | China Conduct reimbursement and health technology assessments (HTA) Sino-EU and Sino-German Cooperation in Health
The health care industry welcomes the Chinese gov- Promote precision medicine: To improve the effi- ernment’s efforts to improve access through broader cacy of treatment and make more efficient use of reimbursement, including increasing the frequency of health insurance funds, use modern diagnostics and updates to the NRDL, and national negotiation of reim- add genetic testing for guiding targeted tumor ther- bursement for innovative drugs. It is now crucial to apy to health insurance coverage. ensure that the system is predictable, evidence-based, and adapts quickly to scientific change by means of flex- Ensure patient-centric endpoints and patient-cen- ible reimbursement processes. The health care industry tric systems that value innovative medical and also welcomes the Chinese government’s efforts to set assistive products, including incremental advances. up an HTA system, as this can systemize and improve the transparency of national reimbursement decisions. Strengthen good governance: Consult patients However, the extent to which it values innovative med- and industry experts at early stages of the research ical products depends on the design of the system. and legislative processes to respond to patients’ unmet needs and mirror scientific development. Recommendations on Health Technology Assessments: Install future proof HTA policies that allow innova- tive medical products to be assessed holistically and Value innovative medical products by opting for smoothly and create a strong link between clinical national payers’ regular reimbursement to make new benefit and price. Additionally, medical devices dif- treatments available to patients. Additionally, rapid ferent in quality should be consequently priced dif- endorsement of the legislative proposal on NRDL ferently and reimbursed according to their innova- updates to promote evidence-based criteria and tive properties. The currently discussed joint clinical improve the transparency of the reimbursement pro- assessment of EU Member States (Euro HTA) should cess are needed. To ensure that new treatments be considered as a basis for further cooperation reach the market quickly, ensure that reimbursement and twinning programs of EU Member States and assessments can be triggered by industry. Ensure China, while both need to be optimized alongside that no price erosion unfriendly to innovation is trig- scientific development in order to value innovative gered by multiple negotiation rounds and that no medicines and products. Consulting with industries unpredictability for innovation reward is provoked. and patients in regular and transparent processes is Industry therefore requests clarity and opportunities therefore key. Twinning programs allow administra- for dialog with NHSA on these proposed processes, tive officers from different countries’ institutions to methodologies, and timelines for adjusting prices. work and learn from one another. Cooperation and setting up twinning programs could ensure more Avoid mandatory localization by means of reim- globally harmonized standards and actions. bursement regulations linked to the origin of the IP right of the medicines or medicinal products.
41 Open markets for public 09 procurement Value Innovation Equal Access Quality
Value quality and do not limit treatment – MedTech: Despite the Working Plan 2017/2018 to or diagnostic options abolish anti-competition policies, some provinces are issuing administrative notices that restrict the Public procurement allows purchasing processes that use of imported high-value medical devices134. Addi- use transparent, predictable rules and can promote tionally, the process of localizing highly innovative healthy competition. It also allows shared purchasing medical technologies to decrease costs and sup- and provides the Chinese government with an impor- port local manufacturers is supported at the high- tant tool for controlling prices over volume, as well as est level of the Chinese government. The National ensuring transparency of anti-corruption efforts. Recent Health Commission (NHC) uses product lists, criticism of Chinese purchasing practices, however, has which list a selection of medical products that centered on the suggestion that procedures are too health care institutions should purchase from local price-oriented and pay insufficient attention to qual- manufacturers.135 Domestic market share targets ity criteria. Additionally, there have been allegations for Chinese companies in the medical device sector, of localization and discriminatory practices. 134 Urgent notice on strengthening accountability and strictly controlling unreasonable growth of medical expenses, Sichuan HFPC, see tieba.baidu. Core challenges: com/p/5449562416?redtag=1912952024. Chinese source? 135 European Chamber of Commerce in China (EUCCC), “Healthcare Equipment . Localization: The use of product lists and restrictions Working Group”, European Business in China Position Paper 2018/2019, pp. on buying imported goods may favor domestic com- 248,
42 Position | Health Care | China Open markets for public procurement Sino-EU and Sino-German Cooperation in Health
as set out in China Manufacturing 2025, are a fur- indication extensions within a year or two prior to ther challenge. Given such problematic practices, patent expiration. Also, the selection parameters the German health care industry calls for elimi- for VBP inclusion are not transparent and may not nation of localization requirements, which lead fully provide an innovation-friendly environment. to discrimination against foreign bidders. More clarification and official guidance from the -Chi – MedTech and diagnostics: Innovative medical nese government are also necessary. devices and assistive technology such as prosthet- ics and orthotics often require individual configu- . Emphasis on price and volume over quality and ration and commissioning. Manufacturing, assem- innovation: A number of sectors face the challenge bling, and delivering the product to the customer of aggressive price negotiation practices that fail to require additional logistics and service processes. value highly innovative products and tend to exclude Tendering processes do not consider these costs, them from the procurement process. however, and tend to favor lower prices137.
– Pharma: The Chinese government has overhauled – Diagnostics: Some provincial health authorities municipal and provincial procurement regulations in China do not differentiate the price of diagnos- with price and volume-based pooled procurement tics according to their quality and method. This is (VBP) pilots for drug purchasing. The government a barrier to the clinical use of modern diagnostic has applied VBP nationwide since September 2019. tests, and it prevents patients from receiving the Specifically, in March 2019 the government started most appropriate, reliable diagnostic results, poten- implementation of the 4+7 Cities pilot program. tially leading to increased treatment expenses and This is a VBP that targets off patent originators shorter survival. This includes, for example, can- and generics that have passed the Generic Quality cer patients who could benefit from modern pre- Consistency Evaluation (GQCE) and centralizes cision medicine in the form of targeted therapy or procurement procedures previously conducted by immunotherapy. This is true for patients with non- individual hospitals. The 4+7 Cities pilot136 uses a small cell lung cancer. Some of these patients can “winner takes nearly all” approach, where a 70 per- be treated with modern tyrosine kinase inhibitors cent market share goes to the single bidder offer- or specialized immune drugs (checkpoint inhibi- ing the lowest price for an active substance. The tors), resulting in significantly longer overall sur- remaining 30 percent market share is awarded to vival, to name just one example. competitors who set prices in a race to the bot- tom. Overall prices for the first wave of molecules – Precision medicine will change diagnostics, enable selected for the pilot program dropped by 52 per- earlier diagnosis, and provide patients with better, cent, with some dropping by as much as 96 percent. more personalized treatment. However, develop- In September 2019, the Chinese government con- ing and using precision medicines requires a bet- ducted VBP tender for the 25 active substances of ter understanding of biomarkers or analysis of the the 4+7 Cities pilot also for the rest of the market, patient or tumor genome prior to treatment. Ena- and extended VBP nationwide. In January 2020, bling access to targeted genetic sequencing and/ the Chinese government conducted VBP tender or immunological testing are therefore key issues. for 33 new active substance with adjusted rules Genetic testing, genome sequencing, and immune for the nationwide market. While the introduction analysis are not properly reimbursed at this time of VBP clearly addresses budget savings within and are therefore not available to most patients. an off-patent environment, it may limit innova- tion within the later part of a product’s lifecycle as there is no incentive, for example, to pursue
136 Bayer Pharmaceuticals, Healthy China 2030: Pressure on Prices Under Pooled 137 Procurement, https://pharma.bayer.com/healthy-china-2030-pressure-prices- European Chamber of Commerce in China (EUCCC), “Healthcare Equipment under-pooled-procurement (accessed on 22.07.2020); DecisionResourceGroup, Working Group”, European Business in China Position Paper 2018/2019, pp. In China 4+7 equals quality generic medicines at affordable costs, https:// 248;
43 Position | Health Care | China Open markets for public procurement Sino-EU and Sino-German Cooperation in Health
Evaluation: Do not exclude customer-fit or patient-fit solu- tions: Design tendering processes that consider The health care industry recognizes and supports the essential configuration, services, and logistics. wish to broaden access to diagnostic procedures and The same tender processes should also not hinder treatment. It is to some extent understandable that a vol- patient-fit treatments and not overly reduce the vari- ume-based approach has been chosen with the aim of ety of treatment options for doctors and patients. reducing prices. High-quality, innovative, patient-centric Allow hospitals and other service providers to pur- medical and assistive products are, however, resource-in- chase products according to the needs of patients, tensive to develop and produce, and therefore come at and to adjust and allocate procurement volumes a higher price. Ultimately, however, quality should not accordingly. Rescind the requirement for individ- be compromised to the extent that patients are unable ual hospitals and service providers to conduct sec- to access high-quality or innovative solutions. ond-round price negotiations. Similarly, promote precision medicine, through reimbursement by pub- Recommendations on Public Procurement: lic insurance for genome sequencing and immune analysis. Provinces should aim for genomic testing Value quality and innovation: Guarantee fair, open to be available in a large number of the hospitals, tendering procedures that place the maximum possi- with analysis carried out in specialist hospitals or ble emphasis on the quality, efficacy, and innovative central laboratories. value of medical products. Before issuing new calls for tenders, conduct comprehensive tender evalu- Guarantee equal access: We recognize the pos- ation and avoid selecting winners based purely on itive legislative change under the newly enforced the lowest price. PRC Foreign Investment Law and its implemen- tation rules as of January 1, 2020, which aim to Promote use of the most economically advanta- ensure national treatment and equal access to for- geous tender (MEAT), e.g., as foreseen by the Euro- eign invested enterprises in China. It is more impor- pean Procurement Directive, in order to award con- tant, however, to ensure strict enforcement of these tracts on the best value for money and promote a regulations and avoid discriminatory practices. value-based care approach. Eliminate regulations that prevent access to Support fast finalization of negotiations on the local markets and fair and equal competition. These International Procurement Instrument (IPI), which include product lists and domestic market share tar- aims at improving conditions under which EU busi- gets for local manufacturers of medical devices, both nesses can compete for public contracts (public of which currently present an obstacle to a compet- procurement) in third countries. The IPI would ena- itive market environment. ble the European Commission to start a dialogue and negotiations—possibly resulting in charging a Apply fair competition principles: Instead of grad- price penalty on bids from third country companies ual price reductions or setting price limits to non-win- in case market access to their home market remains ning products that participate in VBP bidding. restricted for European companies.
Differentiate where necessary: Separate biosimi- lar from generic products and do not apply generics regulation to bio products as they are more complex. Differentiate between different diagnostic methods during procurement and pricing. Innovative diagnos- tics should be valued if they enable earlier or bet- ter treatment of patients. Ideally, there should be a nationwide guideline, which would ensure that prov- inces adapt their procurement and pricing negotia- tion standards accordingly.
44 Cooperation in commercial medical insurance 10 The Chinese health care system currently provides the private insurance sector. It has, for example, created public health care coverage to over 95 percent of the tax incentives for employers and employees by making population. 138 Under its Healthy China 2030 plan, the costs for eligible health insurance plans tax-deducti- Chinese government has significantly increased public ble. While China’s new Foreign Investment Law (FIL) reimbursement, including for innovative drugs and new already is improving equal access and treatment for for- treatment options over the last two years. Gaps in cov- eign investors (since January 1, 2020)142, restrictions in erage remain, however, and commercial health insur- the life insurance sector will not phase out until 2021. ance is therefore currently purchased to cover deduct- Until then the negative lists’ restrictions will remain. ibles, co-payments, and other cost-sharing, as well as However, the opening signal is important, and imple- gaps in the coverage offered by the publicly financed mentation must then soon follow suit 143. health insurance system. This insurance is largely pro- vided by for-profit commercial insurance companies and Megatrend: an aging society and rising middle is at present purchased primarily by higher-income indi- class creating greater demand viduals and by employers for their workers139. An aging demographic and rising middle class are Private insurance such as life insurance and health insur- increasing demand for commercial health products. ance often enables people to receive better quality of Forecasts suggest that China will have 329 million peo- care and higher levels of reimbursement, since some ple aged 65 or older by 2050, including 120 million peo- health services are very expensive or not covered by ple over 80144. Better prevention, diagnosis, and care, public insurance. The main health insurance products including precision medicine, will be needed to tackle currently available are personal critical illness insur- the growing burden of NCDs. Additionally, a burgeon- ance and medical insurance. Despite the aging demo- ing middle class is demanding up-to-date treatments and graphic, insurance covering social care needs is under- is willing to make larger out-of-pocket (OOP) payments. developed140. Epidemic risk insurance policies are now Rather than risking unexpected one-off payments, how- available for the first time, including policies offered by ever, many would prefer to better manage their risk by German insurers141. There is great investor interest in taking out commercial insurance policies.145 The poten- China, as these policies protect clients and their bal- tial demand is clear from the figures. In 2017 individual ance sheets from the consequences of an epidemic. They OOP health expenditures reached RMB 1.49 trillion, cover items such as delays in operations, business inter- representing 28 percent of all health expenditures146. ruptions, and extraction of the workforce as a result of OOP expenditures are likely to increase with the growth infectious diseases. in middle income families, which by some is forecasted to grow from 37 percent of families in 2017 to 50 percent Improving service and financial health coverage for of families by 2025.147 From the perspective of the Chi- 1.4 billion people without overburdening public health nese government, to relax pressure on public funds and care funding is a challenge for the Chinese government. improve overall health security it would therefore be The government therefore recognizes that commercial insurers perform a valuable function, and under its 142 Ministry of Commerce of the People's Republic of China, Foreign Investment Healthy China 2030 plan it is promoting expansion of Law of the People's Republic of China - Order of the President of the People's Republic of China No. 26,
45 Position | Health Care | China Cooperation in commercial medical insurance Sino-EU and Sino-German Cooperation in Health
beneficial to accelerate development of commercial sup- Recommendations for Promotion plemental health insurance. of Private Insurance:
Evaluation Incentivize private insurers and industry: Make it easier for insurance companies to enter the market The health care industry welcomes the Chinese gov- and register irrespective of their country of origin and ernment’s approach to combining public and commer- provide tax incentives to both insurers and partner cial coverage, and recent steps to encourage commer- pharmaceutical companies. Thereby, it is particu- cial insurance in general. The health care industry also larly important to incentivize private insurance cov- believes that facilitating the purchase of commercial ering NCDs, such as cardiovascular or cancer care, health insurance requires the right incentives, and that to prudently prepare for the rising health cost pres- private insurers should be able to respond to the demand sure on the aging population. for additional insurance products from Chinese con- sumers. The country of origin of the insurer should Incentivize potential insurance policy holders: not be a criterion for market access. Up to now, for- Grant further tax credits or reductions to insurance eign-funded companies have generally been subject to policy holders and to employers who provide their regulatory restrictions concerning their business loca- employees with supplemental insurance. tion and have been unable to reach all potential pol- icy holders. The improvements resulting from the For- Organize insurance pilots: Organize medical insur- eign Investment Law (FIL) and the upcoming changes ance payment and tax credit pilots for treatment in the negative lists mean that foreign insurance com- of chronic diseases such as cancer, hypertension, panies will soon be able to carry out commercial insur- and diabetes in designated pharmacies. In particu- ance activities in a previously highly restricted Chinese lar, tax credits should be available for insurance insurance market. It is encouraging that some German packages enabling diagnosis and treatment with insurers have now received approval to establish Chi- precision medicines. nese subsidiaries. To meet the needs of an aging soci- ety, the health care industry therefore advocates steps to further encourage the commercial health insurance sector, particularly for products that improve preventive diagnosis, treatment, and care of patients with NCDs.
46 Cooperation in the digitalization of health 11 As outlined in the first section of this position paper, dig- and histology slides, etc. should be exchanged between itization and digitalization in the health care sector are German, EU, and Chinese experts, organized as an already strongly encouraged by the Chinese government interdisciplinary telemedicine network. and various provincial and municipal entities. China’s New Generation Artificial Intelligence Development . Digitalization in improving R&D productivity: By Plan148 states that AI should help establish intelligent combining expertise in biologics, pharmacology, bio- medical care in areas such as smart hospital construc- chemistry, engineering, and data science, we now tion and development of man-machine coordination have a real opportunity to bring new medicines to in surgical robots. In addition, China’s VR master plan patients faster and more efficiently. We are leveraging 2025 identifies education and health care as key indus- Big Data and advanced analytics to accelerate drug tries, creating a firm foundation for foreign companies discovery and improve drug development produc- wishing to use VR technology to enter the health care tivity. This includes both pre-approval and post-ap- e-learning market149. This enables the German health proval data, as well as real world evidence. Clinical industry to seek out areas where collaboration in ser- trial timelines and approval procedures, however, vices and combined products offers value for both sides. have not yet been optimized. More encouragement is needed in areas such as e-learn- ing and virtual reality learning. . Digitalization in training health professionals: Com- bined digitalized medical products and health-related Current challenges and opportunities: services like e-learning and virtual reality can be highly useful in areas such as improving education and life- . Digitalization in patient and service provider man- long learning for doctors and nurses. Technologies agement: Digital health and patient pathway records such as e-learning, simulation, and extended reality can significantly improve care delivery in areas such will change the way we learn. They are smart addi- as oncology. In addition, digital health records can tional education options for treatment and care. Cur- enable advanced care management, including better rently, in part because of China’s aging demographic, self-management and organization of health services some parts of the country face shortages of suffi- by the patient, and e-learning programs can help opti- ciently skilled medical staff. On average, for exam- mize hospital and care management. ple, there are just 1.9 doctors150 and 2.7 nurses151 per 1,000 people in China, compared to 4.1 doctors152 . Digitalization in diagnostics: To promote patient-cen- and 12.9 nurses153 per 1,000 people in Germany. Cul- tered care, precision medicines rely on large, high-qual- tivating specialization by doctors is still a challenge ity data sets and analysis of genome sequencing data. in some parts of the Chinese education system. In This data is currently often not available, and many 2014, 48 percent of doctors and assistant doctors patients do not have access as tests are not reimbursed. had a bachelor’s degree or above, while 31 percent Improving identification and understanding of bio- had a vocational diploma154 and 21 percent a sec- markers, better data and digitalization of processes ondary vocational diploma. Similarly, a shortage of would help alleviate the burden of a number of dis- eases, including cancer, rheumatism, diabetes etc. In 150 World Health Organization, Global Health Observatory data repository particular for difficult cancer cases, a precise diagnos- – medical doctors,
47 Position | Health Care | China Cooperation in the digitalization of health Sino-EU and Sino-German Cooperation in Health
well-trained nurses is a widespread problem in China, infrastructure can thus be better bridged in therapy particularly for elderly care. delivery. Additionally, medical device downtimes can be reduced to ensure infrastructure readiness. . Digitalization in occupational safety and health: Evaluating statistics and e-learning can be helpful for . Digitalization for population health management: promoting occupational safety. They can also facil- To reduce health care costs in the health care sys- itate health in medical and geriatric institutions as tem, it is important to promote broad health care well as in elderly care outside institutions. Work-re- systems analysis that can collect, analyze, and iden- lated accidents, injuries, and diseases have an impact tify cost drivers and cost cutters in the health care on not only the lives of individual employees and system in order to make evidence-based decisions their families but also on the productivity and prof- on interventions and related budget allocation. Cur- itability of employers and ultimately on the welfare rently, health care costs are administered based on of society. Government, employers, and employees limited data for long-term cost and health develop- in China are strengthening efforts to prevent work- ment trends in different parts of the population. How- place accidents and diseases resulting from inappro- ever, real-time health data and cost data on regional priate working conditions. Improving occupational and even local (neighborhood) levels is important safety and health particularly in small and medi- for developing information and strategies to prevent um-sized enterprises (SMEs), which employ many unnecessary morbidity, and to reduce excessive cost young and migrant workers, is a major challenge155. increases and the burden of disease for the popula- E-learning could be an effective educational option. tion. The German health care industry provides solu- tions ranging from data-warehousing and data-anal- . Digitalization in therapy or remote service: Send- ysis to developing insights and strategies with regard ing online data from therapy or diagnostic screen- to focused interventions in primary health care, thus ing devices (e.g. ventilators, retinal cameras, optical avoiding more expensive secondary hospital care. coherence tomographers) to remote specialists can Regional German health care pilots are renowned facilitate inclusion of expert advice in medical ther- worldwide for their business cases, forms of man- apies. It can also quickly ensure medical engineers’ agement, and patient-focused results156. When rely- support for identifying and fixing failure sources in ing on such tools, governments can better identify medical devices. The rural-urban divide in health and set up more effective education, prevention, and
156 155 International Labour Organization, Safety and health at work in China and Mongolia, Medtronic, An integrated approach to value-based healthcare: Germany’s Gesundes
48 Position | Health Care | China Cooperation in the digitalization of health Sino-EU and Sino-German Cooperation in Health
rehabilitation policies that contribute to health pres- Ensure equal market access for digitalization ervation or quick rehabilitation. In addition, other products and services in health facilities in China. economic factors can be better considered through AI and digitization. These include economic gains Facilitate cooperation between Chinese and German through quicker return to work, less absenteeism companies of all sizes, including SMEs and start- from work due to illness, reductions in the need for ups, and encourage better mutual understanding. nursing, hospital, and elderly care, and improving the overall health status of the population. Enable and promote genetic testing and genome sequencing, particularly for cancer research and Recommendations on Cooperation treatment, through better reimbursement and facil- on Digital Health: itating digitized procedures.
Establish and promote Sino-German collabora- tion on digitalization in areas of shared interest, such as education, occupational safety, patient and service provider management, interdisciplinary and transdisciplinary knowledge exchange (for example to secure second opinions regarding difficult cases), and precision medicine.
Address the issue of data security and data trans- fer with Chinese authorities. With the adoption of Cyber Security Law (CSL) of 2017, the integrity of company data is challenged. The international trans- fer and exchange of data generated in China is cur- tailed by the CSL, which in turn greatly hampers the prospects for cooperation and joint development of digital health products.
49 Position | Health Care | China Imprint Sino-EU and Sino-German Cooperation in Health
Imprint
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Editing Team Verena Kantel, Bayer AG GHA – German Health Alliance China-Speaker, Editing Lead
Ben Mayer, Siemens Healthcare GmbH
Antonia Menzel, Federation of German Industries (BDI)
Premarajani Sabanantham, GHA – German Health Alliance
Addissou Striegel, Bayer AG
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