CFDA Reform – A New Food and Drug Regulator in China

To deepen government reform and improve government efficiency and transparency, the State Council of the People's Republic of China recently released the Plan for Government Institutional Reform and Function Change (the Restructuring Plan), which was approved by the People’s Congress at its first session. Taking effect on March 14th, 2013, this Restructuring Plan focused on restructuring the institutional framework, integration and perfection of government functions at the central level. The implications of such a restructuring would range far and wide, and would fundamentally change the landscape of China's governmental system as it comes into reality.

In the food and drug section, according to the Restructuring Plan, the former State Administration of Food and Drugs (SAFD) has been elevated to the ministry level, and is now renamed as China Food and Drugs Administration (CFDA). On April 10th, 2013, the PRC State Council further extended the reform to the local level and promulgated the Guiding Opinions on the Reform and Improvement of Food and Drug Administration Systems by Local Governments (the Opinions). Two months later, on May 16th, 2013 the newly‐branded CFDA released a detailed plan on internal organizations and staff, as well as transformation of functions (the Plan). All of these efforts are suggesting that the Chinese government is paying more attention to the food and drug safety issues.

After this round of reform, the newly established CFDA absorbed 1) all the responsibilities and powers of the former Office of National Food Safety Committee and the former SAFD, 2) the responsibilities and powers previously assumed by the General Administration of Quality Supervision, Inspection and Quarantine (the AQSIQ) regarding the safety supervision in the food processing section, and 3) also the responsibilities and powers previously assumed by the State Administration for Industry and Commerce (the AIC) regarding the safety supervision in the food circulation section. Therefore, the CFDA, now elevated and expanded as a full ministry organization directly reporting to and supervised by the State Council, has become a single safety agency to supervise the whole process of food production, circulation and use, and exercise the drug administration in China. In addition, governments at the province, city or county level, by referring to the SAFD reform in the central government, are consolidating food safety regulatory and supervision functions and creating an elevated food and drug regulatory agency to exercise centralized and uniform regulation and supervision on the food and drugs.

The food quality and safety has caused heated discussions in China for a long time, and concerns are growing among ordinary Chinese in this regard during their daily lives. Targeting at the currently weak food monitoring system, this restructuring of CFDA and its local branches will be considered to create a more effective and powerful regulator on the safety management of food in China. Meanwhile, CFDA will retain all of the legal and administrative powers of SAFD on the drug administration, reflecting the attitude of Chinese government to continue its stringent regulation in this industry.

CFDA Clarifies Inspection and Acceptance Standards for Trading Enterprises for In‐Vitro Diagnostic Reagents (Medical Devices)

On May 16th, 2013, CFDA released the Circular on Inspection and Acceptance Standards for Trading Enterprises for In‐Vitro Diagnostic Reagents (Medical Devices) (the Circular).

According to the Circular, in‐vitro diagnostic reagents (medical devices) trading companies should prepare for quality management system and standard documents concerning the administration of the purchase, storage, transportation, sales and after‐sale services of in‐vitro diagnostic reagents pursuant to applicable laws and regulations, and specify the policies, responsibilities and working procedures accordingly. In addition, these companies should also establish quality management records with respect to the purchases, inspection and acceptance, sales, ex‐warehouse, transportation of in‐vitro diagnostic reagents. The Circular has also set forth the relevant criteria and requirements for the responsible personnel and management team, warehouses, shipping equipment, management information systems, etc.

Joint Efforts in Combating False and Illegal Medical Advertisements

On April 23rd, 2013, eight ministries and departments at the central level, including the State Administration for Industry and Commerce (SAIC) and CFDA, jointly issued the Notice on Launching a Special Action to Combat False and Illegal Medical Advertisements (the Notice). Under the special action scheme set forth in the Notice, from April 25th to July 25th, local branches of the aforementioned ministries will investigate the medical treatment, drug, medical device and health care food ads as well as allegedly curative health care product ads that are currently published by newspapers, periodicals, radio stations and TV stations, as well as large portal websites, search engines, drug information service websites, pharmaceutical companies and medical institutions’ own websites across China. The primary purpose of such large‐scale investigation is to clear up the false and illegal ads which may significantly affect the normal market order.

This is only a concentrated rectification action and requires joint efforts from various government agencies at the same time. Upon completion of the action, medical ads are still subject to supervision and monitoring by ads regulatory agencies, mainly the SAIC and its local branches, primarily responsible for monitoring and regulating advertising activities, regardless of the media used. In addition, the authorities in charge of the various types of media also oversee advertising in the media under their supervision, for example, the State Administration of Radio, Film and Television, the General Administration of Press and Publication and the Ministry of Information Industry. Moreover, approvals are needed for the advertisements of foods, pharmaceuticals and medical equipment from CFDA. Therefore, before and after this special campaign, day‐to‐day regulations on the medical ads were and would still be exercised by the SAIC and its local branches, with cooperation of other relevant government authorities.

Events and Opinions

CFDA Approves the First Phase I Clinical Trial for a Foreign Drug Manufacturer

According to the currently effective Rules on Administration of Drugs Registration (2007), if a foreign applicant wants to conduct an international multicenter clinical trial in China, the drug used for the international multicenter clinical trial must have already been registered in a country outside of China or has entered into phase II or phase III clinical trials. Though it is also specified in the Rules that CFDA may request the applicant to firstly conduct the Phase I clinical trial in China when approving his application of conducting an international multicenter clinical trial in China, it has never happened in practice before.

According to public news, recently CFDA has approved the preliminary clinical trial (including part of Phase I clinical trial) for a new drug called “CMET Kinase Inhibitors” for Lung Cancer treatment, developed by Novartis, which makes it possible to bring this new drug to both the global market and the China market simultaneously, and suggests that easier market access and simplified approval process for new drugs may be realized in China in the future.

Written Confirmation for Active Substances to be issued by Provincial Branches of CFDA

On May 7th, 2013, CFDA announced on its official website that, the provincial branches are responsible for issuing written confirmations for exporting active pharmaceutical ingredients to EU by drug manufacturers. Pursuant to the EU Directive 2011/62/EU as of June 8, 2011 (amending Directive 2001/83/EC on the community code relating to medicinal products for human use, as regards the prevention of the entry into the legal supply chain of falsified medicinal products), starting from July 2, 2013, active pharmaceutical ingredients to be exported to the EU should satisfy the following requirements: i) manufactured in accordance with GMP standards at least equivalent to the GMP of EU; and ii) accompanied by a written confirmation from the competent authority of the exporting third country certifying that 1) GMP standards are applied; 2) the manufacturing plant concerned is subject to regular, strict and transparent controls and to the effective enforcement of GMP; 3) any information on the findings relating to non‐compliance should be also supplied by the exporting third country without any delay.

According to CFDA, for active pharmaceutical ingredients produced by manufacturers with a drug manufacturing license, 1) if such active pharmaceutical ingredients are assigned with a drug approval number, a document review will be conducted; and 2) if not, both an on‐site examination and document review will be conducted.

Registered Patients Groups May Thrive in China

In China, many patients suffering from the same disease are spontaneously forming self‐help associations to share information on the effective medical treatments for such disease. Similar to the patients’ group in the United States, those associations also help communicate among patients about the recent development of a cure, and sometimes organize charity activities to attract various social aids for patients. These associations, whether small or big, national or local, are mostly in the form of non‐profit welfare organizations and dedicated to improving the lives of people affected by various kinds of diseases through their support, education and research. For example, China Dolls Care and Support Association, China Ataxia Association and Hemophilia Home of China, are all famous national patients’ associations in China.

Generally, there are two approaches to legally create a non‐governmental patients’ group in China: registered as either profit‐driven companies or so‐called “private non‐enterprise entities.” To gain more government support and tax exemption and preferences regarding the donations and revenues as well as avoiding the high thresholds for company registration, patients’ groups in China nowadays are more inclined to operate as “non‐for‐profit” private non‐enterprise entities. Under PRC laws and regulations, the competent authority for registering private non‐enterprise entities is the Ministry of Civil Affairs and its local branches. Prior to the registration, a private non‐enterprise entity should go through a few necessary procedures, including obtaining the approval from the competent authorities in charge of the business to be engaged by such entity (if applicable), determining its name and organization structure, acquiring the necessary personnel, legitimate property and business place to conduct the business.

According to some public news, the Chinese government is striving to simplify the registration procedures of private non‐enterprise entities to encourage more social patients’ groups to obtain governmental recognition and legal identity. For instance, Beijing Civil Affairs Bureau just released an announcement on its official website, saying that starting from April 1st, 2013, public‐oriented, private, non‐enterprise entities can directly register without obtaining any prior approval, and the required registration thresholds will be dramatically reduced.