On Nov. 4, the China National People’s Congress authorized the State Council to launch a three-year trial program to implement the market authorization holder (MAH) system for certain drug products in 10 selected provinces and cities where drug research and development (R&D) institutions and individuals would be qualified to apply for and hold drug product licenses and be responsible for drug quality. The provinces and cities are Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Sichuan. To the extent it proves feasible, the MAH system will be implemented nationwide after the trial program ends.
On Nov. 6, the China Food and Drug Administration (CFDA) published the draft implementing rules for the trial program, soliciting public comments by Nov. 20. As indicated in the draft, new drugs, generic drugs approved with new standards and generic drugs that have passed the equivalence assessments would be eligible for the trial program; China-incorporated R&D companies and Chinese citizens in the selected regions would be eligible MAH holders. The MAH holders must establish their own quality assurance and pharmacovigilance systems to ensure postmarket drug safety and quality and must have the capability to assume drug-related liabilities through guarantees or through insurance. The MAH holders may engage contract manufacturers for the actual manufacturing, and the contract manufacturers shall be CFDA-licensed and China GMP compliant.
The MAH trial program will fundamentally change the current drug licensing system in China. It will bring new opportunities to multinational pharmaceutical companies for their mergers and acquisitions efforts and will allow them to revisit their product development strategies for the China market.