Fully Implement the Marketing Authorization Holder (“MAH") System

The MAH system, which adopts the management mode that separates drug marketing authorization from drug manufacturing authorization, is a common practice in the area of drug regulation in Europe, the United States, Japan and other countries and regions with advanced pharmaceutical markets. The document Guo Fa [2015] No. 44 proposed to launch a pilot drug MAH scheme. On June 6, 2016, the State Council released the Pilot Plan for the Drug Marketing Authorization Holder System (“Pilot Plan"), according to which ten provinces and municipalities including Beijing, Tianjin, Hebei and Shanghai began to implement the pilot scheme. The document Ting Zi [2017] No. 42 now proposes to summarize experience acquired from the pilot scheme and implement the drug MAH system throughout the country accordingly.

Under such mode, marketing authorization will be independent from manufacturing authorization, and drug marketing authorization holders can either manufacture by themselves or engage drug manufacturers to manufacture their drugs. By allowing research and development institutions to engage drug manufactures for manufacturing matters after obtaining drug approval numbers, this mode can create possibilities for research and development institutions to choose soft assets, and is beneficial to the encouragement of drug innovation, improvement of drug quality and prohibition of low-quality repetitive construction.

One thing to be noted is that drug marketing authorization applicants are defined as “institutions" in this Draft for Comment while they were defined as “research and development institutions" or “research personnel" in the Pilot Plan, and as “domestic entities" in the draft amendment released in 2016. By limiting applicants to “institutions", this Draft for Comment rules out the possibility for a natural person to be the applicant, which should have something to do with the heavy liabilities imposed by the Draft for Comment on drug marketing authorization holders. According to the Draft for Comment, not only will the applicant be responsible throughout the entire process of drug development, production and registration application, it should also render ongoing supervision and study over the drugs approved for marketing, perform lifecycle management of drugs and assume legal liabilities. These requirements are rather burdensome for ordinary research personnel, and are not easy to be fully implemented. 

Reform the Review and Approval System and Enhance the Efficiency of Approval

Clinical trials to be changed from “commencing after approval" to “commencing with implied approval"

One of the major measures to improve the efficiency of review and approval is to render “easier access" to clinical trial approval. In the past, clinical trials are permitted to start only upon receipt of clinical trial approval. But according to the Draft for Comment, clinical trials applications will be deemed to be approved if the CFDA does not raise any rejections or deficiency notices, in which case applicants can print out the approval documents by themselves and proceed with clinical trials; with respect to applicants of imported drugs, they can rely on the printed approval documents to attend to the customs clearance for the drugs to be used in the clinical trials. Changing the commencement of clinical trials into “commencement with implied approval" can impel the CFDA to optimize the drug review and approval procedure and increase its efficiency, in order to deliver its review conclusion within the prescribed time limit. As for the applicants, they will no longer need to wait for clinical trial approvals, but can go straight towards clinical trials upon the expiry of the prescribed time limit. 

On-site inspections to be changed from compulsory into where necessary

The current Administrative Measures for Drug Registration requires that during the process of drug registration, the CFDA should perform on-site inspections to clinical trials, and prior to granting marketing approval, the CFDA should perform on-site inspections on the manufacturing sites. However according to the Draft for Comment, regardless of whether it is for clinical trial applications or drug marketing applications, the CFDA can conduct on-site inspections only when it deems necessary; the only exception is that the CFDA should conduct on-site inspections on the manufacturing site of relevant samples of the drugs that are applied for marketing approval as specified in the applications. Since the time of on-site inspection itself is not calculated into the timeline of registration procedure, on-site inspections and sample tests will no longer be the prerequisites for the review and approval of drug registration in most cases, which can greatly save the time required for drug registration. 

The review of drugs, excipients and packaging materials to be changed from separate procedures into associated procedures

The Draft for Comment confirms the associated review of drugs, excipients and packaging materials, a system that has been implemented in the previous reform. In addition, it supplements this system with the associated review of active ingredients and drugs based on the document Ting Zi [2017] No. 42. Accordingly, active ingredients, pharmaceutical excipients and packaging materials will not go through marketing approval procedures individually but will become part of the review and approval of the marketing applications of corresponding preparations. Associated review not only helps to save review resources and administrative costs and shorten the timeline of review and approval, but also emphasizes the responsibilities of the pharmaceutical companies to conduct strict quality control towards their suppliers of active ingredients. 

Differentiate Categories of Changes and Implement Category Management

Information and contents related to the drugs may be changed either during clinical trials or after the drugs enter into the market. During the clinical trials, which is at the stage of research, it is quite common to change the prescriptions or dosage of the drugs based on the feedbacks. After a drug enters into the market, changes such as replacing the supplier of excipients or optimizing quality control system may also be necessary. Companies may encounter with obstacles on their way of drug research and development or drug optimization if the changing procedure is too complicated or if any kinds of change require approval, regardless of the degree of change, or even regardless of whether it has any impact on the drug safety and efficacy.

The Draft for Comment classifies the changes during clinical trials into ordinary changes and significant changes. Significant changes include changes in clinical study protocols that may affect the safety of the study subjects and changes that will apparently affect drug safety, efficacy, and quality evaluation. The applicants can make ordinary changes directly after analysis and assessment. For significant changes, the relevant applicant should submit an application for change to the CFDA, but the approval approach will be “implied approval if no rejection within the prescribed time limit", meaning the applicant can implement a significant change if it does not receive any rejections or deficiency notices from the CFDA within the prescribed time limit.  Such system can provide the applicants with more autonomy in making changes during clinical trials. Furthermore, the applicants can make ordinary changes during clinical trials in their own decision without any interruption to the then-current clinical trials, which can help the research and development to move forward smoothly.

With respect to post-marketing changes, the Draft for Comment proposes to classify them into three categories according to the degree of impact they could have on drug safety, efficacy and quality control, namely, minor changes, moderate changes and significant changes. Minor changes refer to those that could have slight impact or almost no impact on drug safety, efficacy and quality control, which can be made by the marketing approval holders themselves and filed for recordal with the CFDA in the meantime. Moderate changes refer to those that could have moderate impact on drug safety, efficacy and quality control, for which the marketing approval holders are required to submit a supplementary application, while the approval approach will be “implied approval if no rejection within the prescribed time limit". Finally, significant changes refer to those that could have apparent impact on drug safety, efficacy and quality control, and the marketing approval holder must obtain approval before their implementation. The Draft for Comment specifies the categories of some changes. For example, changes to the information on the drug package inserts should be managed as significant changes while changes to the name of the marketing approval holder which only adjust the wording should be managed as moderate changes. However, since “slight", “moderate" and “apparent" are all degree words, the specific categories of other changes will need to be determined according to the actual situation in practice. 

Emphasize Clinically Oriented Drug Innovation and Achieving Consistency between Generic Drugs and Originator’s Drugs

The Draft for Comment encourages clinically oriented drug innovation. According to Article 90, innovative drugs should have clear clinical value, and improved new drugs should have apparent clinical advantages as compared to the original type. In order to enjoy convenience in bidding and other aspects, companies had long been focusing on superficial work such as simple changes to the dosage or increase in the specifications, which has lead to serious backlog in drug review and approval, and forced market exit among companies with true innovative spirits. On the contrary, encouraging clinically oriented drug innovation can prevent pseudo innovative drugs that re-enter the market right after simple changes or increases, improve the efficiency in utilizing resources for review and approval, and bring real technological innovation into the pharmaceutical industry.

With respect to the generic drugs, the Draft for Comment expressly provides that generic drugs should have quality and efficacy equivalent to those of the relevant originator’s drugs or reference products. This requirement implements the Opinions on Conducting Consistency Evaluation of the Quality and Efficacy of Generic Drugs released by the State Council on March 5, 2016. China is a big market of generic drugs and is dominated by varieties of generic drugs. However, generic drugs are surrounded by issues including uneven quality, low standard of imitation and unclear efficacy of certain drugs. In the past, approved drugs were not mandatorily required to be evaluated as to their consistency with the originator’s drugs in quality and efficacy, which accounts for the difference in efficacy between some generic drugs and the originator’s drugs. The implementation of consistency requirement for generic drugs will raise the threshold in the industry of generic drugs and promote the market entry of generic drugs with high quality.

Other changes worth attention include the establishment of priority review and approval system, clinical data protection system, acceptance of overseas trial data into the marketing approval application process and centralization of the authority to acceptance registration applications from local counterparts to the CFDA, and specific implementing rules for some of these systems remain to be promulgated separately. The current Administrative Measures for Drug Registration has been effective for ten years and is no longer able to meet the needs of practice and developments to encourage drug innovation and improve drug quality. This revised draft is a subversive amendment to the current Administrative Measures for Drug Registration and upon its formal enactment, it will have profound influence on the drug research and development, as well as drug registration.