China: New Circular Further Enhancing The Development Of The Market Authorization Holder Regime

Last Updated: 7 January 2018
Article by Nicolas Zhu

The China Food and Drug Administration ("CFDA") promulgated a new circular (2017) No.68 related to the promotion of a drug market authorization holder regime ("MAH Regime") work on 21 August 2017 ("New Circular").

The MAH Regime is a pilot regime launched out by the CFDA under its circular (2016) No. 41 in 2016. The MAH Regime will be implemented until 4 November 2018. According to the Circular (2016) No.41, as for the drugs which fall into the scope of pilot drugs in this Circular, it is possible for a drug research institute or a drug manufacturer located in one of the pilot regions (including Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Sichuan, "Pilot Regions") or a person engaged in the research and development in the Pilot Regions to become a market authorization holder of a drug to be registered in China. The applicant can submit the drug clinical trial application and drug market authorization application documents in order to obtain the market authorization approval for a drug that it develops, although the applicant itself may not meet the related drug manufacturing requirements. To manufacture the approved drug by this MAH applicant, the applicant shall delegate the manufacturing of the pilot drug to a qualified Chinese manufacturer who has obtained the drug manufacturing license. Before the implementing of this MAH Regime, only the companies which had the relevant drug manufacturing licenses were able to apply for the market authorization approval. Therefore, the MAH Regime under this circular (2016) No. 41 is aimed at encouraging more parties to be involved in the development and research of drugs in China although they do not have the relevant manufacturing licenses as requested under the law of the PRC .

The New Circular is aimed at further improving the work under the Circular (2016) No.41 and encouraging the authorities in each of the Pilot Regions to explore and find out more feasible ways regarding the liabilities of the MAH applicant, the legal liabilities in the whole process of manufacturing and sales as well as the cross-region supervisions by the local food and drug administration ("FDA") located in different Pilot Regions.

The New Circular provides for the following rules:

1. Emphasis on the legal liability of the MAH

The MAH shall be responsible for the whole manufacturing chain and the sale of the drug and the life cycle management of the drug, including pre-clinical trial studies, clinical trial, manufacturing, distribution and delivery, adverse event monitoring, market release and the drug quality on the market. The party which is engaged to carry out research, clinical trial, manufacturing and distribution shall be responsible for their respective liabilities according to the laws and the contracts signed with the MAH.

2. Centralizing of market authorization approvals within a group

The New Circular authorizes a pharmaceutical group to centralize the drug market authorization approvals held by its subsidiaries into the group company, so that the group company will become the sole MAH. The group company can entrust its subsidiaries to carry out the manufacturing of the pharmaceuticals based on the production capacity of each subsidiary. The group company may therefore also implement a unified quality management of its subsidiaries. The group company shall be responsible for the quality of all products whose market authorization approvals are centralized.

3. Relocation

The New Circular further stipulates that in the case of the relocation of the manufacturing site of the pharmaceutical manufacturing company to a new site by setting up a new manufacturing plant, the drug market authorization approval of this pharmaceutical manufacturing company can remain at the original site of the manufacturing company and the drug can be manufactured by the new manufacturing plant at the new site, provided that the production management, technical standards and quality of the products manufactured by the new manufacturing plant at the new site remain the same as at the original manufacturing plant.

4. Transfer of market authorization approval

The New Circular also stipulates that the market authorization approval held by a manufacturing company can be transferred to its parent company which is a drug research and development company, so that the parent company can act as the MAH and entrusts this manufacturing company for manufacturing. This is in fact not a new provision because under the circular (2016) No. 41 of CFDA, it was already possible to change the title of the MAH through a change procedure.

5. Multi-sites entrustment

According to the New Circular, a MAH can also entrust several manufacturing companies to manufacture the drug of the MAH. As long as the MAH has obtained the approval of the manufacturing by entrustment for one manufacturing company, this MAH can entrust other manufacturing companies to manufacture its approved drug provided that the formula, process and quality of the drug to be manufactured remain the same as the MAH's drug. The MAH shall be responsible for all legal liabilities related to the drugs manufactured by all these manufacturing subcontractors.

6. Distribution of drug by the MAH

The New Circular further stipulates that the MAH can distribute the drugs by itself, by the manufacturing company which has been entrusted to manufacture this drug or by a pharmaceutical trading company. The parties which shall distribute the drugs, including the MAH, shall meet the Good Supply Practice ("GSP") standards.

7. Pharmacovigilance

The New Circular stresses that the MAH shall be responsible for formulating the pharmacoviligance procedure according to the Drug Adverse Event Reporting and Monitoring Administrative Measures. The MAH may delegate such pharmacoviligance work to a third party, but such delegation shall not release the liability of the MAH from such pharmacoviligance. Within 20 working days of the end of each year, the MAH shall report to the CFDA all matters related to the production, distribution, formula, process, pharmacovigilance and quality control of the pilot drugs manufactured under this MAH Regime.

The New Circular encourages the exploration of new modalities and procedures under this MAH Regime. The FDA of each province shall select some companies in their region as pilot companies to explore the procedures under this MAH Regime (regarding new drugs, equivalence assessment, relocation, manufacturing by entrustment, etc.). Based on the said pilot experience, the CFDA is aimed at building up a standard and complete quality procedure between the MAH and the manufacturing company and to finally establish a comprehensive MAH Regime.

1 The drugs which fall into the scope of pilot drugs include (1) chemical drugs of categories 1 to 4 and category 5 (limited to targeted preparation, sustained-release preparation and controlled release preparation), traditional Chinese medicine and natural drugs of categories 1 to 6, biological products for therapy of categories 1 and 7 and bio-similar drugs, registered, classified and declared in accordance with the existing Administrative Measures for Drug Registration; and (2) chemical drugs of categories 1 and 2 declared in accordance with the new registration categories of chemical drugs (the "new registration categories") after the implementation of the reform of the registration classification of chemical drugs.

2 Generic drugs approved for marketing in accordance with the new standard requiring that such generic drugs have the same quality and curative effect as the originator drugs, including: chemical drugs of categories 3 and 4 declared in accordance with the new registration categories after the implementation of the reform of the registration classification of chemical drugs.

3 Certain drugs already marketed upon approval before the implementation of the MAH Regime, including: (1) drugs passing the assessment of equivalence in quality and curative effect; and (2) drugs with approval numbers held by the drug manufacturers subject to overall relocation or overall relocation after being merged in the Pilot Regions. Narcotics, psychotropics, medical-use toxic drugs, radioactive drugs, biological products for prevention and blood products are not included in the scope of pilot drugs under this MAH Regime.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Toby Mak
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Toby Mak
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions