The China Food and Drug Administration (“CFDA”) promulgated a new circular (2017) No.68 related to the promotion of a drug market authorization holder regime (“MAH Regime”) work on 21 August 2017 (“New Circular”). 

The MAH Regime is a pilot regime launched out by the CFDA under its circular (2016) No. 41 in 2016. The MAH Regime will be implemented until 4 November 2018. According to the Circular (2016) No.41, as for the drugs which fall into the scope of pilot drugs in this Circular, it is possible for a drug research institute or a drug manufacturer located in one of the pilot regions (including Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Sichuan, “Pilot Regions”) or a person engaged in the research and development in the Pilot Regions to become a market authorization holder of a drug to be registered in China. The applicant can submit the drug clinical trial application and drug market authorization application documents in order to obtain the market authorization approval for a drug that it develops, although the applicant itself may not meet the related drug manufacturing requirements. To manufacture the approved drug by this MAH applicant, the applicant shall delegate the manufacturing of the pilot drug to a qualified Chinese manufacturer who has obtained the drug manufacturing license. Before the implementing of this MAH Regime, only the companies which had the relevant drug manufacturing licenses were able to apply for the market authorization approval. Therefore, the MAH Regime under this circular (2016) No. 41 is aimed at encouraging more parties to be involved in the development and research of drugs in China although they do not have the relevant manufacturing licenses as requested under the law of the PRC.

The New Circular is aimed at further improving the work under the Circular (2016) No.41 and encouraging the authorities in each of the Pilot Regions to explore and find out more feasible ways regarding the liabilities of the MAH applicant, the legal liabilities in the whole process of manufacturing and sales as well as the cross-region supervisions by the local food and drug administration (“FDA”) located in different Pilot Regions. 

The New Circular provides for the following rules: 

1. Emphasis on the legal liability of the MAH 

The MAH shall be responsible for the whole manufacturing chain and the sale of the drug and the life cycle management of the drug, including pre-clinical trial studies, clinical trial, manufacturing, distribution and delivery, adverse event monitoring, market release and the drug quality on the market. The party which is engaged to carry out research, clinical trial, manufacturing and distribution shall be responsible for their respective liabilities according to the laws and the contracts signed with the MAH.  

2. Centralizing of market authorization approvals within a group

The New Circular authorizes a pharmaceutical group to centralize the drug market authorization approvals held by its subsidiaries into the group company, so that the group company will become the sole MAH. The group company can entrust its subsidiaries to carry out the manufacturing of the pharmaceuticals based on the production capacity of each subsidiary. The group company may therefore also implement a unified quality management of its subsidiaries. The group company shall be responsible for the quality of all products whose market authorization approvals are centralized. 

3. Relocation

The New Circular further stipulates that in the case of the relocation of the manufacturing site of the pharmaceutical manufacturing company to a new site by setting up a new manufacturing plant, the drug market authorization approval of this pharmaceutical manufacturing company can remain at the original site of the manufacturing company and the drug can be manufactured by the new manufacturing plant at the new site, provided that the production management, technical standards and quality of the products manufactured by the new manufacturing plant at the new site remain the same as at the original manufacturing plant.  

4. Transfer of market authorization approval 

The New Circular also stipulates that the market authorization approval held by a manufacturing company can be transferred to its parent company which is a drug research and development company, so that the parent company can act as the MAH and entrusts this manufacturing company for manufacturing. This is in fact not a new provision because under the circular (2016) No. 41 of CFDA, it was already possible to change the title of the MAH through a change procedure. 

5. Multi-sites entrustment 

According to the New Circular, a MAH can also entrust several manufacturing companies to manufacture the drug of the MAH. As long as the MAH has obtained the approval of the manufacturing by entrustment for one manufacturing company, this MAH can entrust other manufacturing companies to manufacture its approved drug provided that the formula, process and quality of the drug to be manufactured remain the same as the MAH’s drug. The MAH shall be responsible for all legal liabilities related to the drugs manufactured by all these manufacturing subcontractors. 

6. Distribution of drug by the MAH 

The New Circular further stipulates that the MAH can distribute the drugs by itself, by the manufacturing company which has been entrusted to manufacture this drug or by a pharmaceutical trading company. The parties which shall distribute the drugs, including the MAH, shall meet the Good Supply Practice (“GSP”) standards. 

7. Pharmacovigilance 

The New Circular stresses that the MAH shall be responsible for formulating the pharmacoviligance procedure according to the Drug Adverse Event Reporting and Monitoring Administrative Measures. The MAH may delegate such pharmacoviligance work to a third party, but such delegation shall not release the liability of the MAH from such pharmacoviligance. Within 20 working days of the end of each year, the MAH shall report to the CFDA all matters related to the production, distribution, formula, process, pharmacovigilance and quality control of the pilot drugs manufactured under this MAH Regime. 

The New Circular encourages the exploration of new modalities and procedures under this MAH Regime. The FDA of each province shall select some companies in their region as pilot companies to explore the procedures under this MAH Regime (regarding new drugs, equivalence assessment, relocation, manufacturing by entrustment, etc.). Based on the said pilot experience, the CFDA is aimed at building up a standard and complete quality procedure between the MAH and the manufacturing company and to finally establish a comprehensive MAH Regime.