According to a recent announcement by the China Food and Drug Administration (the 'CFDA'), pharmaceutical and medical device manufacturers should in the future expect regular surprise inspection visits from officials. In its announcement of the release of the 'Measures for Unannounced Inspection on Drugs and Medical Devices' (the 'Measures'), the CFDA states that the inspections will commence on or after 01 September 2015, and affected companies will not be notified in advance. It is understood that the CFDA's latest initiative is part of a wide-ranging plan to raise the quality of healthcare products for both the local and foreign market.

The Measures stipulate the circumstances under which an unannounced inspection may be initiated, which include the identification of safety risks in products, complaints received and adverse reaction monitoring. Unannounced checks will also be initiated when the authorities are contacted by whistle-blowers or have suspicions concerning certain companies. The CFDA has stated that it will carefully assess information by whistle-blowers and adverse events and other factors before deciding whether to conduct a surprise inspection. By conducting surprise visits it is expected that the CFDA will be able to respond quickly to concerns, and the opportunity for manufacturers to destroy any incriminating evidence onsite will be eliminated.

During an inspection, the inspectors will not provide any information concerning the reason for the visit or any problems identified whilst onsite. Only when all the appropriate evidence has been collected and analysed, and the exact nature of the problem has been identified will the local CFDA inform the manufacturer and issue the specific rectification instructions to be followed. The Measures state that in addition to requiring rectification within a stipulated time period, the CFDA may, in accordance with the law, issue warning letters, interview individuals at the company under inspection, require products to be recalled, and / or withdraw or cancel any relevant quality authentication and accreditation certificates. Once the risk factors have been eliminated and the identified problems remedied, the relevant risk control measures will be lifted in a timely manner.

This latest announcement by the CFDA demonstrates the agency's commitment to improving the manufacturing quality of products in the healthcare sector with follow-on potential benefit to patients and end users in terms of safety and clinical efficacy. The effectiveness of the new strategy depends upon the CFDA's ability to prevent news of impending inspections being leaked to targeted companies. As such, the Measures provide for disciplinary action, including potential criminal prosecution, to be taken against any CFDA or law enforcement official found to be deliberately leaking confidential information or 'tipping off' companies with information about impending inspections.

It is hoped that surprise inspections will encourage companies operating in China to raise local manufacturing standards to international standards. By doing so, it is expected that China's domestic pharmaceutical and device companies will be better placed to compete with foreign competitors over the long-term in terms of quality rather than on pricing alone.