On 26 December 2018, the National Medical Products Administration (“NMPA”) issued the Administrative Measures for Overseas Inspection Drugs and Medical Devices (“Measures”) effective as of 26 December 2018. According to the Measures, the drugs and medical devices imported or to be imported in China shall be subject to the overseas inspection of NMPA. The inspection shall be made to the overseas process of development and production of these drugs and medical devices. The purpose of the inspection is to ensure the authenticity, reliability and compliance of these aforesaid processes of development and production.

1. Inspection authorities

NMPA shall be responsible for administration of overseas inspection. The Center for Food and Drugs Inspection of NMPA (“Inspection Center”) shall be responsible for conducting the overseas inspection.

2. Inspection

a) Determination of inspection task

The determination of inspection task shall be made by NMPA by means of risk evaluation and random checks. In particular, priority consideration shall be given to the following circumstances:

1) Potential risks found during review and approval of drugs and medical devices; 

2) Risks discovered in the quality management system because inspection or lot release thereof cannot conform to pertinent regulations;

3) Potential product safety risks which are discovered through monitoring of adverse reactions and adverse events;

4) Acts in violation of laws or regulations which are discovered through complaints, tip-offs or other clues;

5) Bad records concerning the marketing authorization holders of drugs, medical device registrants or filing applicants ("Holders");

6) Major problems in a Holder's quality management system which are discovered from the results of on-site inspection conducted by an overseas regulatory authority;

7) Reinspection required after rectification; and 

8) Other circumstances under which overseas inspections become necessary.

If necessary, the inspection may be extended to production sites, suppliers or other contractual parties with respect to raw materials, excipients and packaging materials, etc. 

b) Inspection procedure

1) According the inspection task determined by NMPA, the Inspection Center will send the Notice of Overseas Inspection to the Holder or its agent.

2) The Holder shall submit a notarized and legalized copy of the Power of Attorney in Chinese and foreign language (to appoint an agent in charge of the communication between the Holder and NMPA), Form of Basic Information about the Products under Overseas Inspection to the Inspection Center within 20 working days, and the English version and the Chinese version of the documents required in the List of Site Master Files within 40 working days. For medical devices, the agent must be the domestic company acting as the agent of the medical devices registration or filing.

3) Upon receipt of the Form of Basic Information about the Products under Overseas Inspection, the Inspection Center shall issue the Advance Notice of Overseas Inspection to notify the Holder the estimated time of inspection. Except with special reasons by submitting a written application to the Inspection Center, it is generally not permitted to extend the time of inspection.

4) The onsite inspection shall be made by an inspection team composed of three or more inspectors of the Inspection Center.

5) After the onsite inspection, the inspection team shall submit a report to the Inspection Center within 10 working days of the return of the inspection team to China.

6) Upon the receipt of the report of the inspection team, the Inspection Center shall issue the Notice of Overseas Inspection Results to the Holder or its agent within 20 working days.

The List of the Site Master Files as mentioned in item b 2) above is attached to the Measures as appendix. The List of the Site Master Files includes the documents with regards to the basic information of the Holder, production license, GMP, staffs, plant, equipment, products, quality control, recall etc. Quite a few documents must be required and translated into Chinese. However, the delay for providing these documents is only 40 working days. From our point of view, such obligation of the Holder should be very difficult to be fulfilled.

c) Evaluation of inspection

Upon the receipt of the Notice of Overseas Inspection Results, the Holder shall submit a report on rectification of the problems found through inspection to the Inspection Center within 50 working days.

The Inspection Center shall make a comprehensive evaluation of the on-site inspection report in terms of the rectification completed by the Holder. The comprehensive evaluation shall be completed within 20 working days after the receipt of the rectification report of the Holder. If necessary, reinspection can be made by the Inspection Center. The evaluation principles shall be as follows:

1) Accepted: no defect is found through on-site inspection

2) Accepted after rectification; or

3) Unaccepted.

A Holder shall be deemed deferring, hindering, restricting or refusing the inspection and will be judged "unaccepted" in any of the following circumstances:

1) after the Notice of Overseas Inspection is served, the Holder neither submits an acceptable power of attorney after the deadline nor provides relevant documents and materials within the required period;

2) the Holder has hindered the inspection arrangement or has deferred inspection arrangement twice; 

3) the Holder refuses to arrange current manufacture; 

4) the Holder fails to cooperate in going through the procedures for overseas inspection;

5) the Holder fails to cooperate in extended inspection; 

6) the Holder defers, hinders, restricts or refuses the inspectors to have access to the sites or areas to be inspected, or limits the time of inspection, or sets up unreasonable inspection conditions or disturbs the inspection;

7) the Holder defers providing, or refuses to provide or intentionally conceals key inspection information;

8) the Holder refuses or restricts collection of evidence and relevant materials during on-site inspection, refuses to complete the procedures for notarization or legalisation of the evidence and relevant materials or submit notarized and legalized documents; or

9) other circumstances of non-cooperation in the course of inspection.

3. Risk control measures

Where an inspected entity that is held unaccepted through comprehensive evaluation or is found through inspection to have committed illegal acts, or its products contain hidden safety problems, NMPA shall promptly take risk control measures and make public disclosure according to the law. In case of major hidden quality problems for which emergency measures are required, NMPA shall immediately take risk control measures and deal with them according to laws and regulations. If the inspected entity is judged as “unaccepted”, NMPA has the right to take the following measures:

– if the imported drugs or medical devices are still under the examination of NMPA for the registration, the NMPA has the right to ask for rectification or reject the application of registration in the worst scenario;

– if the drugs or medical devices have already approved to be imported, the NMPA has the right to take risk control measures as interview with the Holder, ordering of rectification within a designated period, issuance of warning letters, suspension of import customs clearance and filing procedures for drugs, suspension of import of medical devices, suspension of sale and use, supervision of product recall or revocation of the certifications of import approval.

As mentioned in items 2 b) and c) above, the inspected entity shall be judged by the Inspection Center as “unaccepted’ if it fails to provide the documents required in time. However, taking into account the documents required according to the said Measures, it seems practically difficult for them to prepare and provide the required documents in time, especially the documents required in the List of the Site Master Files. In case the inspected entity whose drugs or medical devices have already been imported in China and is judged as “unaccepted”, the loss might be significant due to the suspension of business, recall of products, and the civil liabilities towards customers may also occur due to the default of delivery of products.

Therefore, it is advisable to prepare in advance the documentations based on the List of Site Master Files which may be required by the overseas inspection of NMPA. If the drugs and medicals devices have already been imported in China, it is also suggested to prepare as from now all the documents as required based on the List of Site Master Files to save time in case of sudden inspection of NMPA.