In 2010, China’s State Food and Drug Administration (“SFDA”) issued a new version of its Good Manufacturing Practice (the “GMP”) regulations, which require manufacturers of sterile drugs (including blood products, vaccines, injections, etc.) to receive new GMP certification before December 31, 2013, and all other drug manufacturers to receive new GMP certification before December 31, 2015.

As the deadlines approach, several agencies, including SFDA, the National Reform and Development Committee (“NDRC”), the Ministry of Industry and Information Technology (“MIIT”) and the Ministry of Health (“MOH”) have jointly issued a circular (“Circular”) on December 12, 2012, which includes a number of facilitating mechanisms for manufacturers:

  1. SFDA will expedite approval for manufacturing technology transfers resulting from intra-group mergers, acquisitions or restructuring.
  2. If a manufacturer decides not to upgrade an entire facility to meet the new GMP requirements, it may transfer certain manufacturing technologies to manufacturers that are already certified with new GMP. For each dosage form of the product, the technologies can only be transferred to one company. Companies must file for SFDA approval for such transfers no later than December 31, 2014, for sterile products and December 31, 2016, for other products.
  3. Manufacturers that have already obtained WHO pre-qualification or PIC/S certification will be given priority in SFDA’s new GMP review.
  4. Beginning January 1, 2014, for sterile products and January 1, 2016, for other products, existing pharmaceutical companies that fail to receive the new GMP certification by their respective deadlines will no longer be able to file any drug registration applications, and SFDA’s review of their pending registration applications will be suspended.
  5. Beginning July 1, 2013, for sterile products and January 1 2015, for other products, SFDA will stop granting approvals for any contract manufacturing arrangement if the contract manufacturer has not obtained a GMP certification. Any approved contract manufacturing activities shall be suspended as well if the new GMP certification is not timely obtained.
  6. Drug products manufactured by companies with new GMP certification will be given preferential pricing treatment and an advantage in the drug procurement process. This Circular reflects a determination by the Chinese government to upgrade the local pharmaceutical industry and also to provide incentives for multinational companies to pursue local product acquisition.