Provisions on the Supervision and Administration of Drug Market Authorization Holder Implementation of the Main Responsibility of Drug Quality and Safety

The National Medical Products Administration (“NMPA”) promulgated the Provisions on the Supervision and Administration of Drug Market Authorization Holder Implementation of the Main Responsibility of Drug Quality and Safety (“Provisions”) on 29 December 2022. The Provisions will take effect as of 1 March 2023.

The Provisions are issued to further implement the Drug Administration Law of the People's Republic of China ("Drug Administration Law", latest revised and effective as of 1 December 2019), the Administrative Measures for Drug Registration (effective as of 1 July 2020), the Measures for the Supervision and Administration of Drug Production (effective as of 1 July 2020), the Drug Good Manufacturing Practice ("GMP", effective as of 1 March 2011) and other relevant laws and regulations. The Provisions aim to urge drug market authorization holder ("MAH Holder") to establish and implement the drug quality management system and to ensure drug safety, effectiveness and quality controllability during the whole process of drug development, manufacturing, trading and use.

1. Key Positions Duties, Responsibilities and Requirements

a) Key Positions

Article 4 of the Provisions stipulates that an MAH Holder shall establish a management department with clear duties and responsibilities, and an independent quality management department. The MAH Holder shall be equipped with managerial personnel compatible with the drug manufacturing and trading scale.

Article 5 of the Provisions reiterates that the key positions personnel shall be full-time personnel and shall include at least the following:

Manufacturing Person in Charge shall not concurrently act as the Quality Person in Charge. Such requirements are in line with those provided in the GMP.

b) Person in Charge of Pharmacovigilance

Article 6 and Article 10 of the Provisions stipulate that the Enterprise Person in Charge is responsible for engaging or designating the Person in Charge of Pharmacovigilance. The Person in Charge of Pharmacovigilance shall be responsible for the establishment, running and continuous improvement of the pharmacovigilance system and shall ensure that the pharmacovigilance system is in line with the relevant laws, regulations and the Pharmacovigilance Quality Management Standards (effective as of 1 December 2021).

The Provisions further provide the criteria of Person in Charge of Pharmacovigilance, which is consistent with Article 24 of the Pharmacovigilance Quality Management Standards.

2. Quality Management Requirements of an MAH Holder

The Provisions emphasize that an MAH Holder shall establish a quality management system to cover the whole life cycle of drug (including non-clinical research, clinical trial, manufacturing and trading, post-market study, adverse effect monitoring and report, etc). Compared to GMP, the Provisions stipulate detailed or modified requirements regarding each step over the span of life cycle. The main points are summarized as below:

a) Examination and Approval of Suppliers

The MAH Holder shall conduct examination and approval of its suppliers of raw materials, pharmaceutical excipients, immediate packaging materials and containers, and shall ensure that such materials and substances are in line with national laws, regulations and standards for use in drugs.

b) Change Control

The MAH Holder shall establish post-market change control in accordance with requirements such as the GMP. The Provisions stipulate that in case of entrusted manufacturing, the MAH Holder shall, together with the entrusted manufacturer, carry out relevant research, evaluation and necessary verification in terms of any change items of the drug concerned.

c) Manufacturing Release and Market Release

Drug manufacturing enterprise shall establish manufacturing release process and standards, and conduct review and approval on drug quality test result, key manufacturing record and deviation control status. Drug shall not be released until the Quality Authorized Person has signed documents for approving such release.

The MAH Holder shall be responsible for drug market release, and shall be responsible for establishing the market release process and standards. In case of entrusted manufacturing, the MAH Holder shall conduct review and approval of the manufacturing release process and standards of the entrusted manufacturing enterprises, including drug test results and manufacturing release documents. Drug shall not be released into the market unless the Quality Authorized Person of the MAH Holder has signed documents for approving such release. If necessary, the MAH Holder can conduct review and approval on drug manufacturing records, test records, deviation investigation etc. of the entrusted entity.

d) Quality Assurance in Entrusted Manufacturing

In case of entrusted manufacturing, Article 16 of the Provisions requires that the MAH Holder shall conduct an assessment on the quality assurance capability and risk management ability of the entrusted entity and sign a quality agreement and an entrusted manufacturing agreement with the entrusted entity and supervise the entrusted entity in performing the agreement. The MAH Holder shall perform its obligations, such as material supplier evaluation and approval, change control review and approval, product market release and annual reporting. The MAH Holder shall conduct regular on-site review and approval on the quality management system of the entrusted entity and ensure effective connection between the quality management systems of the parties, and shall ensure that the manufacturing process is in continuous compliance with the statutory requirements.

The Provisions emphasize that the MAH Holder shall not shift its liabilities and duties to its entrusted manufacturing entity through the quality agreement.

e) Quality Assurance in Entrusted Storage, Transport and Sales

Article 17 of the Provisions requires that the MAH Holder shall conduct assessment on the quality assurance capability and risk management ability of the entrusted entity and sign a quality agreement and an entrusted manufacturing agreement with the entrusted entity. The Provisions further provide that the MAH Holder shall regularly review and approve the storage and transport management status of the entrusted entity and ensure that the storage and transport processes comply with the Drug Good Supply Practice and drug storage conditions.

f) Drug Traceability

While Article 36 of the Drug Administration Law only generally provides that the MAH Holder shall establish and implement a drug traceability system, and provide traceability information as required to ensure the traceability of drugs, Article 18 of the Provisions provides more detailed requirements. The MAH Holder is required to establish by itself or by third party informationized traceability system, to affix drug traceability marks on all levels of selling package units, to provide traceability information to down-stream drug trading enterprises and drug usage entities, and to timely and correctly keep record and store the drug-related information during its life cycle, in order to realize drug traceability. The MAH Holder shall also provide traceability data to the drug administration authorities as required.

g) Post-market Evaluation

Article 21 of the Provisions stipulates that the MAH Holder shall regularly carry out post-market evaluation and based on the results of the evaluation, take quality improvement or risk prevention measures including without limitation to modify drug specifications, increase quality standards, improve process prescription, suspend manufacturing and selling, drug recall, and apply for de-registration of drug approval document.

h) Safety Incidences

Article 22 of the Provisions stipulates that the MAH Holder shall immediately take effective measures regarding drugs, raw materials, pharmaceutical excipients, immediate packaging materials and containers, and the relevant manufacturing lines in the event of material safety incidences in relation to drug safety, so as to prevent the damages from spreading.

The Provisions also raise requirements in terms of drug recall, pharmacovigilance and manufacturing suspension report for drug in shortage of supply, which are in line with the Administrative Measures on Drug Recall (effective as of 1 November 2022), the Pharmacovigilance Quality Management Standards and Article 46 of the Measures for the Supervision and Administration of Drug Production (effective as of 1 July 2020) respectively.

Furthermore, Article 24 of the Provisions, based on the first-claimee responsible system required by Article 144 of the Drug Administration Law, further stipulates that the compensation capability of the MAH Holder shall be compatible with the risk level and market volume of drug products, the personal injury compensation standards, etc. The MAH Holder shall keep evidence regarding its compensation capability or relevant commercial insurance contracts.

3. Quality Management System of the MAH Holder

Article 25 to Article 29 of the Provisions stipulate requirements for the quality management system of the MAH Holder, including without limitation investigation on deviation, review and approval of change items, establishment of annual reporting system, conducting regular retrospective analysis, conducting regular self-inspection or self-audit and establishment of training management system. Such requirements are in line with the GMP and the Administrative Provisions on the Annual Report on Drugs (effective as of 11 April 2022).

Regarding regular retrospective analysis on manufacturing and quality management, Article 26 of the Provisions specifies that in principle, the study and determination on repetitive risks or newly emerged risks shall be carried out at least once every quarter, which is an additional requirement compared to Article 266 of the GMP (annual quality retrospective analysis on the drugs manufactured).

4. Supervision and Administration

Article 30 of the Provisions stipulates that drug administration authorities shall include the status of MAH Holder's performing main responsibility of drug quality and safety as one of the inspection aspects. Drug administration authorities shall emphasize the status of how the key personnel and the quality management related personnel perform their duties and how the quality management system is operated.

5. Preliminary Comments

To comply with the Provisions, the drug MAH Holder shall implement statutory requirements in terms of duties, responsibilities and requirements of key positions, and shall engage quality management personnel compatible with its manufacturing and trading scale. The MAH Holder shall pay attention to the new or more detailed requirements raised by the Provisions in quality management during the whole life cycle of drugs. In case of entrusted manufacturing, the MAH Holder shall fulfill its responsibilities as the market authorization holder and supervise each aspect of the manufacturing process of entrusted manufacturing enterprise in accordance with the Provisions. The MAH Holder shall comply with the Provisions together with other drug-safety related laws and regulations such as the GMP, Pharmacovigilance Quality Management Standards and the Administrative Provisions on the Annual Report on Drugs.