China’s National Medical Products Administration Finalizes Two Implementing Rules of the Drug Administration Law

1. Overview

In these two regulations, the NMPA provides detailed procedural and substantive requirements for the key regulatory concepts established by the DAL, confirms a number of reform actions it has taken in the past three years, introduces new terminology and clarifies certain ambiguities from past practice. All of these efforts reflect the agency’s determination to align its regulatory approaches with international practice, especially as a member of the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (ICH), but without disrupting the existing regulatory and licensing framework. 

2. MAH System

To implement the market authorization holder (MAH) system nationwide, the NMPA imposes a number of qualification requirements on the MAH in both the DRR and the DMR. While the MAH is no longer required to have manufacturing capacity and to manufacture products by itself, the following apply.

• It must establish a quality assurance system and be responsible for product release (not to be assigned to third parties).
• The MAH’s legal representative and “major responsible personnel” shall take overall responsibility for product quality and shall assign dedicated, independent quality assurance personnel and qualified quality personnel for product assurance and product release.
• To the extent the MAH does not manufacture the product by itself but through a contract manufacturing organization (CMO), it shall enter into a contract manufacturing agreement and a quality agreement with the CMO, based on which it shall apply for a drug manufacturing license (DML) with the provincial counterpart of the NMPA, subject itself to inspections and other regulatory oversight by the agency. In particular, both the MAH and the CMO must have obtained the DML before applying for the market authorization (MA) of a particular drug.

Subject to the NMPA’s approval, an MA may be transferred following the supplementary application pathway for approved drugs. However, it remains to be seen if the MA transfer applies to all types of drugs in China, including generic drugs that have not passed the quality consistency evaluation (QCE).

3. Local Agent

These regulations do not address the local agent concept created by the DAL for foreign MAHs. The NMPA is expected to issue a separate implementing regulation on this topic, which hopefully will define the scope of responsibilities of the local agent, circumstances where the local agent may be held jointly liable with its principals and allocation of its responsibilities with local distributors.

4. Regulatory Pathways for Expedited Approvals

Apart from the “conditional approval” and “priority review” procedures that the NMPA implemented in the past few years for certain eligible products (i.e., orphan drugs and innovative oncology drugs), the DRR further introduces (i) a procedure for “breakthrough therapies, which allows sponsors to file the application during the clinical trials for innovative drugs treating life-threatening diseases, and (ii) a special review procedure for drugs dealing with a public health crisis. Drugs eligible for conditional approvals or considered breakthrough therapies will be eligible for priority review, with shortened approval timelines, more flexibility in providing supplementary information during the review process.

5. Clinical Trials

The DRR clarifies that it regulates only clinical trials conducted for drugs seeking market approvals in China, which may include pharmacological studies, exploratory studies, confirmatory studies and post-market studies, classified as Phase I, II, III, IV studies and BE studies. Such clarification may help foreign sponsors address challenges in seeking approval for their trials with other government agencies in China.    

The DRR also clarifies that the applicant for the clinical trial approval (CTA) from NMPA shall be the sponsor of the relevant trials, that the NMPA-approved trials must be conducted within three years upon issuance of the CTA, and that it may be possible to change the sponsors before trials are completed. 

Compared with previous DRR, the new regulation reflects a more dynamic, interactive, risk-based approach the NMPA intends to take in overseeing clinical trials. It imposes more specific pharmacovigilance obligations on sponsors to provide annual safety updates during the trials, to timely report suspected and unexpected serious adverse events and other potential safety risks during the trials and to take risk control measures, including adjustment to study protocols, informed consents, investigator brochures or even to suspend or terminate the trials.

6. Post-approval Changes to the MA

The MAH bears the obligation to conduct post-market studies to continuously evaluate and ensure product safety, efficacy and quality, and it must make any changes to the MA by way of the regulatory approval, filing or annual reporting. 

7. Data Integrity and GxP Compliance

The NMPA reinforces data integrity requirements throughout the drug research and development and manufacturing phases, with the MAH being the ultimate responsible party. With good clinical practice (GCP) and good manufacturing practice (GMP) certification requirements abolished by the DAL, the NMPA will take a risk-based approach to conduct pre-market GCP and GMP compliance inspections as well as post-market GMP inspections. Manufacturers for vaccines, blood products and other high-risk products will be subject to more frequent GMP compliance inspections. 

8. IP Matters

The DRR removes provisions for the “quasi” patent linkage and data exclusivity (DE) protection in its previous version. It  makes clear that the NMPA will develop a list of chemical drugs approved in China, similar to the Orange Book, containing information on generic name, active ingredients, dosage form, specification, MAH, and so on but without any associated patent or DE-related information. The NMPA has indicated on several occasions that these issues are beyond the NMPA’s authority and require interagency collaboration and regulations at the national level.