China’s State Food and Drug Administration (SFDA) has issued new draft guidance that would require non-Chinese pharmaceutical companies to allow inspections of worksites outside of China. The proposed measures would require all overseas drug manufacturers that have a license issued by the SFDA to:
- Submit to on-site inspections during production periods, which may include photography and video of the site and the manufacturing process; inspection for compliance with Good Manufacturing Practices; and taking samples from the site back to China
- Submit a Site Master File that gives a detailed description of the manufacturer and its production, distribution and quality control systems
- Submit an import report that details quantity, recalls and complaints
- Submit a sales report that details sales and production information for the past three years, including stoppage of sales for non-compliance
The new proposals represent an increase in the scope of the SFDA’s regulatory reach, and are the first attempts by the SFDA to impose substantial regulations outside of China. These proposals would create significant new responsibilities and obligations for pharmaceutical manufacturers, and would require new compliance strategies and programs. Penalties for compliance failures would include halting the importation of the drug, recalling all drugs within the People’s Republic of China and suspending the registration or approval of the drug.
McDermott Will & Emery has a strategic alliance with MWE China Law Offices, a separate law firm based in Shanghai. This Hot Topic was authored by MWE China Law Offices lawyer Henry (Litong) Chen and McDermott lawyer Byron Kalogerou.