China’s newly revised “Drug Administration Law” was approved and implemented by the National People’s Congress (NPC) Standing Committee.

Takehomes:

• The newly revised “Drug Administration Law” encourages drug development and innovation in five major areas, and gives priority to reviewing and approving these medicines.
• A risk control mechanism for halting clinical trials at any time has been established.
• The Law introduces an extended clinical trial clause for the drugs used for seriously life-threatening disease.
• The law also broadens the channels for import of unapproved drugs due to clinical urgent needs.
• The model of supervision and administration is changed from “GMP”, “GSP” to “dynamic inspection”.
• If the MAH is a foreign enterprise, the enterprise legal person in China shall be appointed to perform the holder’s obligations and bear joint liabilities.
• The drug regulatory department shall establish drug safety credit files.

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On August 26^th, 2019, the 12th session of the Standing Committee of the 13th National People’s Congress was held in Beijing, and the meeting voted to approve the amendment to “Drug Administration Law of the People’s Republic of China”. The newly revised “Drug Administration Law” will take effect on December 1^st, 2019. This is the second major systematic and structural amendment to “Drug Administration Law” since its promulgation in 1984, which promotes the reform achievements and effective practices in the pharmaceutical field into law, and also provides stronger legal guarantee for public health.

This revision incorporates drug management concepts into drug quality, medication safety, and public health. It also explicitly encourages drug innovation in therapeutic areas where treatment needs have not been satisfied. There are clear provisions for taking a number of measures to streamline administration, delegate more power, and strengthen the main responsibility.

• Encourage innovation, strengthen risk prevention and control

This revision of the “Drug Administration Law” not only writes many new systems that guide the direction of drug development and innovation into the law, but also has a breakthrough optimization of the review and approval process. It also established a matching “brake” mechanism to speed up registration review and strengthen drug risk prevention and control.

1. Emphasis on encouraging innovation is guided by “clinical value”. The innovation is defined from multiple angles of clear or special curative effects, new treatment mechanisms, and systematic adjustment of intervention functions. It reflects the encouragement of breakthroughs in clinical translational innovation from the source of basic medicine. This is a policy shift from encouraging imitative innovation to encouraging source innovation
2. Drug development and innovation in five major areas are explicitly encouraged: medicines for severely life-threatening diseases, medicines for treating rare diseases, medicines for children, urgently needed medicines in clinical shortage, and medicines for preventing and treating major infectious diseases. These five categories of drugs all fall in the field of disease treatment that has not yet met clinical needs, and are also in areas of high investment in research and development and high risks. China encourages the development and production of medicines in short supply, and gives priority to reviewing and approving medicines that are urgently needed and new medicines that prevent and treat major infectious and rare diseases.
3. In the “Drug Administration Law”, to consolidate the exploration of drug review and approval system, the implied clinical trial licensing system, bioequivalence filing system and clinical trial institution filing system are written into the law. At the same time, a risk control mechanism for halting clinical trials at any time has been established.
4. The “Drug Administration Law” introduces an extended clinical trial clause, which stipulates that for the drugs those are undergoing clinical trials to treat diseases that are seriously life-threatening and have no effective treatment, if they may generate benefit according to medical observation and conform to ethical principles., After review and informed consent, the drugs could be used for other patients with the same condition in the institution where the clinical trials are conducted.
5. Another important item we need to pay attention is: the law broadens the channels for import of unapproved drugs due to clinical urgent needs. Medical institutions could import a small amount of drugs due to clinical urgent needs after the approval by the drug administrative department of the State Council of China, or approved by the people’s governments of provinces, autonomous regions and municipalities directly under the central government authorized by the state council. At the same time, in accordance with relevant national regulations, individuals are allowed to bring a small amount of drugs from abroad for their own use.

• Streamline administration, delegate power, and strengthen the main responsibility

1. The “Drug Administration Law” also canceled the certification clause of “Good Manufacturing Practices (GMP)” and “Good Supply Practices (GSP)”. The law requires companies to continue manufacturing and supplying in accordance with regulations. The model of supervision and administration is changed from “periodic certification” to “dynamic inspection”.
2. The newly revised “Drug Administration Law” specifically includes Chapter III “Drug Marketing Authorization Holders (MAH)”. The holder of a drug marketing authorization is responsible for the safety, effectiveness, and quality of the drug during the entire process of drug development, manufacture, supply, and use.
   • The qualifications of holders are relaxed. The MAH refers to the enterprise or a drug development institution that has obtained a drug registration certificate. The binding relationship of the drug registration certificate and the drug manufacturing license is cancelled.
   • If the MAH is a foreign enterprise, the enterprise legal person in China shall be appointed to perform the holder’s obligations and bear joint liabilities.
   • It is clear that with the approval of the drug regulatory department under the State Council, the MAH can transfer the license to another enterprise. The ownership of the property right of the drug marketing license is confirmed by law.
   • Confirmation of the legal status of MAH as a producer. It is explicitly required that the drug MAH and its address are added to the information that should be indicated on the drug’s label or instruction, contrastively only the information of manufacturer and its address were specified formerly.
   • Clarify the legal responsibilities of drug MAH and other partners, and establish the first responsibility system.
3. The drug regulatory department shall establish drug safety credit files for drug MAHs, drug manufacturers, drug distributors, non-clinical safety evaluation research institutions, drug clinical trial institutions, and medical institutions.

As a conclusion, the newly revised “Drug Administration Law” reflects the China’s pharmaceutical administration system is fully in line with the trend of international standards, and it also reveals the determination of Chinese government to strengthen the protection of drug safety, medication safety and promotion of public health.