China: GMP Certificate Cancelation: Concern Or Relief?

Last Updated: 21 December 2017
Article by Claire Gu

On September 24th, Ding Jianhua, director of the China Food and Drug Administration (CFDA) Supervision Department, stated at the 2017 Chinese Pharmaceutical Entrepreneurs, Scientists and Investors Convention that the Good Manufacturing Practices (GMP) certificate would be canceled. This statement is regarded as a signal of official confirmation to cancel the GMP certificate. This news soon went viral and sparked uproar.

The cancelation of GMP certificate is disheartening. An undeniable fact is that in the past 20 years, China's pharmaceutical industry would not have made any achievements without GMP certificate during the course of pharmaceutical development. Over the years, GMP has regulated pharmaceutical companies in every aspect, including factory plant, equipment, personnel training, hygiene, air and water purification, production and documentation.

GMP obliges the drug regulatory departments to inspect drug manufacturers for their compliance with GMP's requirements in accordance with the relevant provisions and issue a certificate to the manufacturers who have passed the inspection. Without such GMP certificate, drugs will not be able to enter the market.

Since then, GMP certificate has been in the spotlight. In 2016, 170 GMP certificates belonging to 162 pharmaceutical companies were revoked, indicating that some pharmaceutical companies have also been revoked more than once.

Notwithstanding, the issue today is that GMP certificate has strayed away from its initial purpose. Currently, passing an inspection will win the pharmaceutical company a 5-year certificate.

Upon obtaining the certificate, companies then prefer to sell the production to the wholesaler, making it difficult to link the patients with the production quality as the companies lose control over the production. This process, somehow, disposes companies to act irresponsibly.

Actually, signs of cancellation date from 2013 when the General Office of the State Council issued , which proposed the concept of "two certification become one certification." It suggests "making the pharmaceutical production administrative license and GMP certification gradually integrated into one administrative license; making the Pharmaceutical Production Trading License and GSP Certification gradually integrated into one administrative license."

After then, the word "cancel" has repeatedly been cited by different government officials in different occasions.

New wine in old bottles

Although phrased differently, the document did not bring major changes to the pharmaceutical industry. In fact, GMP refers to "basic requirements" rather than "highest requirements". Obtaining GMP certificate does not equate to guarantee of production quality or high standard of the company.

There are many rules that are more significant than GMP, such as thorough quality management system, quality awareness, risk management, quality experience, not to mention other specific CMC requirements on the process, prescription, raw materials, and control measures when going through registration procedure. Quality management should center on the patient instead of coping with inspection.

More people think it is only an administrative measure to follow the "streamline administration and institute decentralization" instruction. Recently, the State Council has been abolishing unnecessary approvals and licenses. Tired of certification and recertification, many companies are expecting a more flexible environment.

Cut off one certificate, two more inspection shall take its place

The other side of the coin reveals a different story. Some industry insiders believe that GMP/GSP certificate carries weight. Specifically, before entering the market, drugs need to be produced and under sales management. GMP is still recognized as international norms by WHO. GMP is a prerequisite for the entry of international market.

In fact, there is no way for competent authority to exempt the pharmaceutical companies from all liabilities. Conversely, more stringent criteria must be laid down. It can be predicted that there will be more unannounced inspections of drugs and medical devices referring to the unannounced supervision and inspection by the food and drug administrative departments over the R&D, production, operation, use and other aspects of drugs and medical devices.

The inspection methods will probably be more diverse. To better illustrate this situation, we could use the following simile; if a company with a certificate was a student who has received admission to college, it should still remain motivated to work hard and obtain good grades.

It has been a wild period for the pharmaceutical companies due to two-invoice system, medical representative recording system, and other unexpected changes. The ride looks even bumpier ahead.

First published 16/10/2017.

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.

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