After the State Council issued the Opinions on Deepening the Reform of Examination and Approval System and Encouraging Innovation of Drugs and Medical Devices (“Opinions”) on 8 October 2017, the China Food and Drug Administration ("CFDA") issued the Drug Administration Law of the People's Republic of China (draft Amendment for comments) (“Draft”) on 23 October 2017, so as to ensure that the Opinions will be implemented as soon as possible. Comments are sought before 30 October 2017.

Compared to the current Drug Administration Law, the Draft adds 6 clauses, revises 9 clauses and removes 2 clauses. These modifications include:

1. Implementing the Market Authorisation Holder system fully

Market Authorisation Holders (“MAH”) will be responsible for the safety, effectiveness and quality of their drugs. They will bear all legal responsibility for preclinical research, clinical trials, manufacturing and adverse drug reactions (“ADR”). Overseas MAH will jointly assume legal responsibility with their agents.

2. Simplifying the administrative examination and approval

Clinical trial institutions do not have to be approved but only have to be recorded. Additionally, clinical trials do not need to have express permission but only implied permission from the authority. Bioequivalence trials need to be recorded. Certification of the Good Manufacturing Practice for Drugs and the Good Distribution Practice for Drugs is not necessary now. Raw materials and accessories will be approved together with the drugs.

3. Establishing a professional drug inspector system

The inspectors will be assessed to ensure that they have the necessary professional knowledge.

4. Specifying the liability of individuals

The liability and obligations of non-clinical drug safety evaluation and research institutions, clinical trial institutions, contract research organisations and MAH have been clarified. Liability is specific to the individual. If anyone forges data or other materials or if anyone’s licence has been revoked, the entity, the persons directly in charge and other persons directly liable shall be prohibited from engaging in the drug industry for ten years. If anyone is sentenced to imprisonment because of their crime regarding drug safety, he/she will be prohibited from being engaged in drug development, manufacture, distribution, importation or export activities in his/her lifetime. If the illegal behaviour is intentional, serious or has caused serious consequences, the person mentioned above shall be fined between 30-100% of the income earned in the previous year.

It is worth nothing that, the Draft does not include all the reform methods proposed in the Opinions. Certain important changes, such as the changes related to the definition and classification of new drugs, the full life cycle management of drugs, the patent linkage system and its related pilot projects are not reflected in this Draft. The CFDA is currently working on a full revision of the Drug Administration Law to include all the reforms proposed in the Opinions, and is planning to submit the draft of such full revision to the State Council for review and approval at the end of this year. We will continue to issue updates on the progress of the full revision.