Marketing, Manufacturing, Packaging & Labeling, Advertising: China
A brief overview of the situation regarding marketing, manufacturing, packaging & labeling and advertising within Chinese pharma. Prepared in association with Fangda Partners, one of China’s most prestigious and well-regarded law firms. This is an extract from The Pharma Legal Handbook: China, which can be purchased here for USD 99.
1. What is the authorization process for the marketing of new drugs, biologics, medical devices, over-the-counter medications, and other medicinal products?
Please refer to Questions 3 & 6 of the Regulatory, Pricing and Reimbursement article regarding the authorization of drugs and medical products.
2. What is the authorization process for the marketing of generic versions of these products?
Please refer to Question 6 of the Regulatory, Pricing and Reimbursement article regarding the authorization of generic drugs.
3. What are the typical fees for marketing approval?
Please refer to Question 4 of the Regulatory, Pricing and Reimbursement article regarding the fees for marketing approval of different products.
4. What is the period of authorization and the renewal process?
Please refer to Question 5 of the Regulatory, Pricing and Reimbursement article regarding the fees for marketing approval of different products.
5. What are the requirements, if any, for post-approval pharmacovigilance?
The key regulation for China’s ADR monitoring system is the 2011 Provisions on ADR Reporting and Monitoring. Drug manufacturers, distributors and medical institutions are required to report all serious ADRs they learn of to the competent ADR monitoring center within 15 days and non-serious reactions on a monthly basis. Drug manufacturers are required to report serious ADRs incurred abroad within 30 days through the China ADR Monitoring System.
6. Are foreign marketing authorizations recognized?
Foreign marketing authorizations are generally not recognized in China, all drugs and medical devices must be approved by the NMPA for sale in China.
In certain pilot regions, such as Hainan province, foreign medical device and the small amount of medicine urgent for clinical use are allowed to be imported without obtaining marketing authorization from the NMPA and used in designated institutions for designated treatment purposes upon the permission from competent authorities.
7. Are parallel imports of medicines or devices allowed?
Current PRC laws contain no provisions that directly address the legality of parallel imports of medicines or devices. It is advisable for market participants to note the following rules in relation to parallel import:
- Patent. The PRC Patent Law is basically the only piece of PRC legislation that explicitly allows parallel import, article 69.1 expressly states that any use, offer for sale, sale or import of patented products or products produced through patented process which have already been sold by the patent owner or licensee does not constitute patent infringement.
- Trademark. In terms of trademark protection, PRC law does not explicitly address the issue of whether parallel import is allowed or not. Some court decisions have followed the principle of international exhaustion – that the first sale of the goods to a purchaser abroad exhausts the trademark right in China when certain conditions are satisfied (once the trademark rights are exhausted, the registered trademarks owner will no longer have the right to prevent the importation or distribution of the relevant goods); whilst other courts ruled that the first sale of the trademarked goods must occur within China.
- Marketing authorization. Notwithstanding the ambiguity of parallel import under IP related laws, it is certain that imported medicines or devices must have the necessary marketing authorizations
Parallel import is not an urgent issue for the drug industry in China, because MNCs must participate in the tender for supplying drugs to public hospitals (which account for a majority share in China’s drug market, especially for prescription drugs) through their national exclusive distributor in China, which effectively precludes any other parallel importers from supplying drugs to public hospitals. On the other hand, pharmaceutical companies can also limit or prevent parallel import by controlling the supply chain, for example, the agreements between a pharmaceutical company and its distributors may contain clauses on territorial limitations and non-competing obligations; importers in China may also request for an exclusive distribution right and ask the drug or devices manufacturers to take actions to prevent parallel import.
8. What are the restrictions on marketing practices such as gifts, sponsorships, consultancy agreements, travel and entertainment, or other incentives for healthcare organizations and individual medical practitioners?
ADMINISTRATIVE PENALTY AND INDUSTRY PRACTICE
According to the Anti-Unfair Competition Law, China’s main regulation on unfair competition and commercial bribery, giving something of value to the below three categories of recipients in order to seek a transaction opportunity or competitive advantage will be regarded as commercial bribery: (i) employees of a counterparty to a transaction; (ii) any person that a counterparty uses to handle relevant matters; (iii) any person who can influence a transaction. The penalty for commercial bribery includes a maximum fine of 3 million renminbi and confiscation of illegal gains derived from corrupt transactions.
Furthermore, the Code of Practice on the Promotion of Pharmaceutical Products issued by the R&D based Pharmaceutical Association in China (RDPAC), which has been voluntarily adhered to by member pharmaceutical companies as the general baseline practices for drug promotion in China, specifically stipulates the following requirements:
- Healthcare professionals shall not generally be paid in cash and gifts for personal benefit.
- Sponsorship is only allowed for events with the purpose to provide scientific or educational information, which must be held in an appropriate venue that is conducive to such purpose.
- To engage healthcare professionals as consultants or to perform other services, a written agreement must be prepared in advance to specify the basis for payment, which shall be reasonable and in accordance with the fair market value.
The provision of bribery may also constitute a criminal crime (official bribery or commercial bribery).
Official bribery is the criminal offence of giving, accepting, soliciting or introducing a bribe to or by state functionaries. If the offeror is an individual and the recipient is a government related entity, such as a government agency or state-owned enterprise, the threshold for prosecution is RMB 100,000; if the offeror is a legal entity, the threshold for prosecution is RMB 200,000 regardless of whether the recipient is an individual or not.
Commercial bribery includes giving a bribe and accepting a bribe. Here, none of the parties involved is government related. With respect to the crime of giving a bribe, the threshold for prosecution is RMB 60,000, if the offeror is an individual, and RMB 200,000, if the offeror is an entity. The threshold for prosecution of the crime of accepting a bribe is RMB 60,000 regardless of whether the offeror is an individual or not. Accepting a bribe by a private-owned entity shall not constitute a criminal offense.
9. How is the manufacturing of medicines and devices regulated and by which agencies?
The manufacturing of medicines and devices is regulated by NMPA and the manufacturing process should be conducted in conformity with China’s Good Manufacturing Practices (GMP).
10. Are local manufacturing requirements compatible with Good Manufacturing Practices (GMPs) as defined by the U.S. Food & Drug Administration and/or the European Medicines Agency?
Most of China’s current Drug GMP provisions are compatible with the GMP provisions of the United States but have its own characteristics as well. According to the Agreement between the Department of Health and Human Services of the United States of America and the State Food and Drug Administration of the People’s Republic of China on the Safety of Drugs and Medical Devices, entered into on December 11, 2007, the two countries agree to develop through the Work Plan details of collaboration on the establishment of internationally-recognized standards. These standards may include the ICH Guidelines, including ICH Q7A Current Good Manufacturing Practice Guideline for APIs.
11. What is the inspection regime for manufacturing facilities?
Regular or surprise inspections may be conducted by NMPA or its local counterparts during the whole drug manufacturing process, including: (i) set-up of new manufacturing site; (ii) NDA approval; and (iii) post-marketing manufacturing of drugs.
12. Are manufacturing facilities open for inspection by foreign inspectors or third-party inspectors as authorized by the FDA/EMA?
Yes. According to the Implementing Arrangement between the Food and Drug Administration of the Department of Health and Human Services of the United States of America and the China Food and Drug Administration of the People’s Republic of China regarding the Cooperate Mechanism of Regulatory Staff, the U.S. FDA may conduct inspections in China to assess the compliance with relevant U.S. requirements of facilities that are engaged in manufacturing, producing, processing, packing, testing, holding, transporting, or distributing any drug intended for export to the United States or its territories. In support of these inspections, FDA may also collect and analyze product samples.
The U.S. FDA has a China office to conduct inspections at facilities that manufacture FDA-regulated goods.
13. What are the requirements for storage, packaging, and handling of medicines and devices and their constituent components?
Storage, packaging, and handling of medicines and devices must comply with the Good Supply Practice for Drugs and Good Supply Practice for Medical Devices, respectively, which set forth the minimum standards for the quality management systems of drug and device distribution in China. For example, the Good Supply Practice for Drugs requires that a drug trading company should be equipped with a comprehensive computer information system, a warehouse with temperature and humidity auto-monitoring systems and qualified quality management personnel.
14. What information must be included in medicine and device labeling?
The label of a drug shall bear the name, ingredients, specifications, the manufacturing enterprise, approval number, product batch number, date of production, expiry date, suitability for symptoms or main function, methods of use, dosage, contraindications and side-effects.
Regarding medical device, the label shall contain the following information:
- General name, type and specification of the medical device;
- Manufacturer’s name, domicile, production address and contact details;
- Number of technical requirements;
- Production date and service life or expiry date;
- Performance, main structure and scope of application of the product;
- Contraindications, precautions and other necessary warnings or prompts;
- Instruction or diagrammatic presentation for installation and use of the product;
- Maintenance and repair methods as well as the special storage conditions and method;
- Other particulars that should be indicated in the technical requirements.
15. What additional information may be included in labeling and packaging?
For drugs with special requirements on storage, the requirements shall be marked in the label. For narcotic drugs, psychotropic substances, medicinal toxic drugs, radioactive pharmaceuticals, drugs for topical use, non-prescription drugs and other drugs having special marks specified by the NMPA, their special marks shall be printed in the drug labels. Additionally, with regard to the label on the package for transportation and storage, information such as packaging quantity, precautions for transportation or other marks may be included when necessary.
Regarding a Class II or III medical device, the number of registration certificate as well as the name, address and contact details of the registrant are also required in the label. Also, the name, domicile and contact information of the agent shall be included in the labeling of the imported devices. In the case of contract manufacturing, the labeling shall include name, domicile, production address, the number of production permit or the number of record-filing certificate of the commissioned enterprise. Furthermore, if the device is radioactive, or if damage to or adverse effect on the environment might be caused in the course of use of such device, warning signs or notes shall be included in the label.
16. What items may not be included in labeling and packaging?
Regarding medicine, unregistered trademarks and other drug names unapproved by the NMPA shall not be used in the labels.
The label of a medical device may not contain the following particulars:
- Words assuring effect like “best effect”, “guaranteed cure”, “complete cure”, “root out disease”, “immediate effect” and “completely free of side effects”;
- Absolute expressions like “highest tech”, “most scientific”, “most advanced” and “best”;
- Rates of cure or effectiveness;
- Comparison with products of any other enterprise in terms of effectiveness and safety;
- Words of promise like “underwritten by insurance company” and “refund upon ineffectiveness”;
- Certification or recommendation in the name or image of any organization or individual;
- Misleading statement, to the effect that one has contracted a certain disease, or, without using the device, one will contract a certain disease or his conditions will worsen, and other information that is false, exaggerated or misleading; and
- Other information prohibited by laws and regulations.
17. What are the restrictions and requirements for the marketing and advertising of medicines and devices?
Drug advertisements shall be examined in accordance with laws and regulations. A company seeking to advertise its drugs must apply for an approval number for a drug advertisement, and the approval number’s period of validity shall be one year. Over-the-counter (OTC) drugs can be advertised directly to consumers. Prescription drugs should be advertised in designated medical and pharmaceutical journals intended for healthcare professionals. Prescription drugs can be advertised only in NMPA-approved, professional medical publications. In respect of the content, a drug advertisement shall not contain any unscientific assertion or guarantee on effects and shall not be endorsed using the names of medical or pharmaceutical institutions, experts, scholars, physicians or patients.
A medical device advertisement shall have an approval number as well. A medical device advertisement must contain the name of the approved device, the name of the device manufacturing enterprise, the medical device registration certificate number and the advertisement approval number. A medical device advertisement is not allowed to contain any false, exaggerated or misleading content. Medical device advertisements should not target at children, and no medical device advertisement may be published in child publications, channels, programs or columns.
18. Where can medicines and devices be sold or delivered? Can medicines and devices be sold or delivered via post?
Medicines and Class II and III medical devices can be sold in NMPA-approved or recorded drug stores, while the sales of Class I medical devices do not need approval from the NMPA.
Regulations on the delivery of drugs and devices via post are not clear; the market practice is that except for narcotic drugs and psychotropic drugs (which need special NMPA approval to be delivered via post), drugs and devices can be delivered by online stores to patients via post. Under current PRC laws, online drug stores must apply for a Drug Trading Permit (for retail sale) from the local branch of NMPA to be able to sell OTC drugs to individual customers, displaying or selling prescription drugs by online drug store is prohibited. Drug manufacturers and wholesalers cannot directly sell drugs to individual customers.
19. What are the restrictions and requirements for electronic marketing and advertising via email, by Internet, social media, and other channels?
Statutory requirements for drug advertising apply to marketing medicinal products on the internet as well. For instance, operators of internet websites hosting drug advertisements are required to obtain the qualification for providing internet-based drug information services upon examination and approval by the NMPA. The drug-related information to be displayed on the internet must be scientific, accurate and comply with the relevant laws and regulations. The internet-based drug information shall not contain any information concerning narcotic drugs, psychotropic drugs, medical toxic drugs, radiopharmaceuticals, addiction medications and preparations made by medical institutions.
20. May medicines and devices be advertised or sold directly to consumers?
Please refer to Question 17 above regarding drug and device advertisement regulatory system in China.
OTC drugs are divided into Class A and Class B drugs. Drugstores can sell both classes directly to consumers, but general commercial stores such as supermarkets and convenience stores can only sell Class B OTC drugs. Class A OTC drugs must be sold by the pharmaceutical retail enterprise with practicing apothecaries or other pharmaceutical technical personnel whose qualifications have been certified according to the applicable laws.
Class II and III medical devices can be sold in NMPA-approved or recorded drug stores, while the sales of Class I medical devices do not need approval from the NMPA.
21. How is compliance monitored?
NMPA has the right to conduct inspections and audit visits within the China’s territory to assure all actors involved in the drug and device comply with laws and regulations.
Subject to the internal cooperation, NMPA may also conduct inspections overseas. For example, according to the Implementing Arrangement between the Food and Drug Administration of the Department of Health and Human Services of the United States of America and the China Food and Drug Administration of the People’s Republic of China regarding the Cooperate Mechanism of Regulatory Staff, NMPA may conduct inspections in the United States to assess the compliance with relevant Chinese requirements of facilities that are engaged in manufacturing, producing, processing, packing, testing, holding, transporting, or distributing any Drug intended for export to China. In support of these inspections, CFDA may also collect and analyze product samples.
22. What are the potential penalties for noncompliance?
Please refer to Question 9 of the Regulatory, Pricing and Reimbursement article.