Interpretation: Interim Measures for Supporting the Development of Pharmaceutical and Health Industries in Changping Cluster of the Sci-tech Innovation Area of the China (Beijing) Pilot Free Trade Zone

Scope of application: he Measures are applicable to independent legal entities and other innovative entities which have completed business registration, tax registration, and statistical registration in Changping Cluster of the Sci-tech Innovation Area of the China (Beijing) Pilot Free Trade Zone. These entities shall be engaged in R&D, production, distribution, services, and other production and operation related activities in the field of pharmaceutical and health. The Measures shall apply to other pharmaceutical and health enterprises in Changping District which meet the conditions listed in said measures. Priority shall be given to R&D innovation and industrialization of innovative drugs, high-end medical equipment, cell and gene therapy, AI + medical care, and precision medical services. Support shall also befocused on public service platforms for the pharmaceutical and health industry as well as professional service platforms such as CRO, CDMO, CMO, and CSO.

Implementation principle: Under the approval of the district government, projects of particular importance shall be supported in accordance with the principle of case-by-case approval. Those already supported with the case-by-case approval may not be eligible to receive support under these measures, unless otherwise approved by the district government. If one project or item is eligible for multiple policies or other supporting policies of Changping District, the principle of “preferential treatment without duplication” shall apply. If one project or item is eligible for other supporting policies at the municipal level, it may apply for policy support at both the district and municipal levels, unless otherwise specified. Enterprises receiving financial support according to the measures, within eight years from the date of receiving such support, shall not move out of their registered address and office address away from the district, alter their tax liability in the district, reduce their registered capital, or change their statistical relationships. In the event of any violation, the supported enterprises are required to return all the funds they've received according to the measures.

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Policies to Support Registration of Projects in the Pharmaceutical and Health Industry

1. Newly-introduced enterprises (including newly-registered and newly-settled enterprises), under any of the following conditions, may receive an annual premise rent subsidy of up to 60% (up to CNY 3 per m2 per day, which is up to CNY 2 million per year. The subsidy period shall not exceed 3 years cumulatively):

a. Annual investment in R&D or tax payment exceeding CNY 5 million

b. Receiving equity investments more than CNY 20 million from Angel, VC, PE, and other means

c. with special contributions.

2. New key projects (including newly-introduced projects and production expansion projects for an existing enterprise) , registered through land acquisition and property procurement, shall be prioritized for inclusion in the high-end technological industry project pool in Changping District, and may receive project land use and housing support. Eligible project has a total investment in fixed assets (excluding land acquisition and property procurement) of more than CNY 300 million, may receive a subsidy of up to 10% of the actual investment in fixed asset, up to a maximum of CNY 50 million.

3. In linew with Article 1 and Article 2, global leading pharmaceutical and medical device enterprises to build regional headquarters and R&D centers in Changping District, as well as winners of such recognitions as the Nobel Prize in Medicine and the Lasker Medical Research Awards to commercialize their achievements in Changping District with specific projects, technologies and teams, shall receive a rent subsidy of up to CNY 5 million per year and fixed asset subsidy up to CNY 100 million. They will also be prioritized for recommendation as national and municipal key projects.

4. Investment institutions that promote startups to be listed or qualified to be listed to register and pay taxes in Changping District or change its registered tax payment location to Changping, may receive an incentive reward of CNY 1 million for each of the enterprises successfully listed within 3 years after its settlement in Changping, without any upper limit.

Policies to Support Development of Registered Pharmaceutical and Health Enterprises

5. Eligible enterprises with a total investment in R&D of at least CNY 10 million for two years before the year of application and an annual revenue of less than CNY 20 million in the previous year, may receive a subsidy of 10% of the investment in R&D (each enterprise may receive not more than CNY 500,000 per year, witha maiximal subsidy period of 3 years cumulatively. This subsidy is not applicable to enterprises receiving support in line with Article 1).

6. For pharmaceutical and medical equipment enterprises producing or settling accounts in Changping District, when their annual output or sales of a single variety exceeds CNY 50 million, CNY 100 million, CNY 500 million, CNY 1 billion, and CNY 2 billion for the first time, they may receive an incentive of CNY 200,000, CNY 400,000, CNY 2 million, CNY 5 million and CNY 10 million respectively. For medical service enterprises, when their annual revenue for main business exceeds CNY 50 million, CNY 100 million, CNY 500 million, CNY 1 billion, and CNY 2 billion for the first time, they shall receive an incentive of CNY 100,000, CNY 200,000, CNY 1 million, CNY 2 million, and CNY 4 million respectively (Incentives shall be granted accordingly upon reaching the benchmarks, while enterprises may only receive the difference of the due incentives, not more than the enterprises' tax contributions to the district in that year).

7. Efforts will be made in hazardous waste collection and transfer to address R&D and production-related issues for small and medium-sized enterprises that deal with hazardous waste in smaller quantities, higher frequency, and higher cost.

8. For products that have newly obtained registration and certification from FDA, EMA and other agencies, provided that the products are manufactured or settled in Changping, a subsidy based on 30% of the actual registration fee (including overseas registration fees, testing fees, and local agency fees) may be given. A subsidy of up to CNY 1 million may be given for a single variety of drugs, up to CNY 3 million to a single enterprise per year. A subsidy of up to CNY 500,000 may be given for a single variety of medical equipment (limited to three categories in principle), CNY 1.5 million to a single enterprise per year. Products already subsidized with similar municipal funds shall be given a one-time supporting incentive equivalent to 10% of the municipal fund subsidies.

9. Pharmaceutical and health enterprises in Changping District which introduce advanced technologies for local industrialization may receive a one-time incentive of up to CNY 1 million for a single variety of the products placed on the market, CNY 10 million per year at maximum for each enterprise.

Policies to Support R&D Innovation and Results Commercialization of Pharmaceutical and Health Enterprises

10. Category 1 biological products and category 1 chemical drugs entering Phase I, Phase II, and Phase III clinical trials may be given an incentive of CNY 500,000, CNY 1 million, and CNY 2 million for each variety respectively. Category 1 Chinese medicine entering Phase I, Phase II, and Phase III clinical trials may be given an incentive of CNY 200,000, CNY 500,000, and CNY 1 million for each variety respectively (the same variety may not receive duplicated support for for multiple indications of clinical trials). For non-registered clinical trials in frontier areas such as cell and gene therapy, a one-time incentive of up to CNY 500,000 may be given for each variety and up to CNY 1 million to each enterprise per year.

11. For Category 1 biological products, category 1 chemical drugs, and category 1 Chinese medicine which newly obtain drug registration certificates and whose production or settlement is conducted in Changping District, a one-time incentive of CNY 2 million may be given for each variety and up to CNY 10 million to each enterprise per year. Varieties of particular significance shall be given additional support.

12. For enterprises which obtain registration certificates for medical devices for the first time (limited to three categories in principle) with their production or settlement completed in Changping District, an incentive of CNY 500,000 may be given for the preferential single variety and up to CNY 2 million to each enterprise per year. Additional support shall be granted for varieties of particular significance.

13. For drugs and medical device enterprises which do not meet the conditions for production in Changping District and produce through the commission of Marketing Authorization Holder, an incentive equivalent to 20% of the incremental portion of the annual contribution to the district made by the enterprise may be given. In the case of entrusting enterprises in the region (non-affiliated enterprises), an incentive of 30% shall be given (The subsidy period shall not exceed 3 years cumulatively. Enterprises receiving financial support in line with Article 6 are not applicable to this policy). For enterprises which possess the necessary production conditions and entrust others due to insufficient production capacity, the incentive shall be given in accordance with Article 10 for a single variety. Enterprises in Changping District entrusted by Marketing Authorization Holders (non-affiliated enterprises) in the district, provided with the actual annual transaction cost of the newly-entrusted variety exceeding CNY 10 million, a one-time incentive of CNY 300,000 shall be given for each variety, and up to CNY 2 million to each enterprise per year.

14. For CRO, CDMO, CMO, CSO, and other service outsourcing enterprises and institutions registered and settled in Changping District, under the condition that theyprovide services for pharmaceutical and health enterprises (non-affiliated enterprises) in the district, an incentive equivalent to 20% of the actual annual service transaction costs may be given. The subsidy may not exceed CNY 2 million per year to each enterprise (The subsidy period shall not exceed 3 years cumulatively). A certain subsidy may be grantd to public service platforms for public welfare.

15. Certified pharmaceutical and health enterprises shall be given priority for supportive policies such as talent services, housing guarantees, headquarters enterprises, listing incentives, scenario applications, government procurement, and more in Changping District and Beijing Municipality.