China Tightens Regulation on Outsourced Manufacturing for Drug Marketing Authorization Holders (MAHs)

by Grace Wang Oct 26, 2023

On Oct. 23, 2023, China National Medical Products Administration (NMPA) issued the Notice on Enhancing the Supervision and Management of Outsourced Manufacturing for Drug Marketing Authorization Holders (MAHs) (referred to as the Notice), which took immediate effect.

While the official Notice highly resembles the draft Notice on Enhancing the Supervision of Drug Marketing Authorization Holders that Outsources Manufacture issued earlier this year in May, its focus is primarily on regulating outsourced manufacturing activities rather than the MAHs themselves.

The Notice came out in response to the growing trend R&D institutions and contract sales organizations (CSOs) utilize the MAH system to obtain drug marketing authorizations and subsequently outsource manufacturing activities to contract manufacturing organizations (CMOs). However, some of these MAHs lack qualified personnel for quality assurance, raising doubts about their ability to effectively oversee the manufacturing activities of CMOs.        

To address the potential compliance issues associated with outsourced manufacturing, the NMPA enforces the Notice to strengthen the authorization process for outsourcing manufacturing and outline MAH’s quality management obligations in relation to outsourced manufacturing activities.

1. Application for Outsourcing Manufacture Authorization

If an MAH plans to outsource manufacture to an CMO, it is required to submit an application to the local provincial-level medical products administration in order to get a Category B drug manufacturing license.

    * The drug manufacturing license categories are as follows:

    • Category A is designated for MAHs that conduct in-house drug manufacturing;

    • Category B is designated for MAHs that outsource drug manufacturing to CMOs;

    • Category C is designated for CMOs that accept the outsourced manufacturing from MAHs.

    • Category D is designated for companies that manufacture active pharmaceutical ingredients (APIs).

The application for the Category B manufacturing license must include a GMP compliance notice which serves as recognition the CMO is qualified to undertake the outsourced manufacturing. This implies that the MAH can only proceed with the application for outsourcing manufacturing authorization after the CMO successfully passes the GMP inspection. 

In addition to reviewing the MAH’s outsourcing application, the local authority will conduct an on-site inspection  on the MAH, focusing on the following conditions:

    1) The MAH’s key personnel: the inspection will assess whether the key individuals are permanently employed, rather than working part-time.

    • For outsourcing the manufacturing of sterile drug products, the MAH’s responsible person for manufacture, responsible person for quality, and the qualified person must have a minimum of five-year specific experience in managing drug manufacturing and quality, with at least three-year specific experience related to sterile drugs.

    • For outsourcing the manufacture of traditional Chinese medicine (TCM) injections and multi-component biochemical drugs the MAH’s responsible person for manufacture, responsible person for quality, and the qualified person must have at least three-year experience managing the manufacture and quality of the same type of drug products. The outsourced products must have at least records for consecutive sales in the latest consecutive five years, without any records of severe adverse reactions or failed inspections. The CMO must have records of manufacturing the same type of products continuously for the past three years.

   2) The establishment and operation of the quality management system;

   3) The management of outsourcing affairs.

Furthermore, the local medical products authority will communicate with the MAH in advance, reminding the MAH to complete the following steps before applying for outsourcing manufacture:

    1) Completing chemistry, manufacturing, and controls (CMC) study, pharmacological & toxicological studies, and clinical trials;

   2) Confirming the quality standards;

   3) Validating the manufacturing process for commercialized productions;

   4) Preparing for drug testing and inspection for drug registration.

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2. Quality Management for Outsourced Manufacturing

The MAH authorized to outsource manufacturing should sign a quality agreement and a manufacturing entrustment agreement with the CMO to ensure effective alignment between the two parties’ QMS. 

When outsourcing the manufacture of biological products, TCM injections, and multi-component biochemical drugs, the MAH has obligations to fulfill:

1) Establishing a comprehensive QMS:

The MAH must establish a QMS covering the entire manufacturing process, which includes the raw materials used (such as biological materials, TCM raw material, TCM decoction pieces, TCM extracts, raw materials of animal origin, etc.).

2) Conducting on-site inspections of ingredient suppliers:

Conducting on-site inspections of the suppliers of the main ingredients for the drug products. In cases where the drug product is manufactured at multiple sites, the MAH should ensure consistency in terms of the origin, source, and supplier of ingredients across different manufacturing sites.

3) Assigning an experienced employee for supervision:

During the outsourced manufacturing, the MAH should assign an employee with relevant experience in managing the manufacturing and quality in the specific area. This employee should be familiar with the manufacturing process and quality control. The responsibilities of this employee in supervising the CMO should be defined and outlined in the quality agreement.

4) Periodic sample testing of materials and finished dosage forms:

If the CMO undertakes the testing of materials, intermediates (drug stock solution), and finished dosage forms, the MAH should conduct or entrust a third party to conduct regular sample testing of these products.

3. Prohibited Products for Outsourced Manufacturing

In accordance with the Notice, the following products are forbidden from outsourced manufacturing:

  • Blood products;

  • Narcotic drugs;

  • Psychotropic drugs;

  • Toxic drugs for medical use;

  • Medical precursor chemicals;

  • Compound preparations containing narcotics/psychotropics/medical precursor chemicals.

It is important to note that if there are specific regulations pertaining to products such as vaccines, those regulations shall take precedence and govern the outsourcing of their manufacturing.

Regarding the Notice, China's NMPA imposes stringent requirements on outsourcing manufacturing, particularly for high-risk categories such as biologics, TCM injections, and multi-component biochemical drugs. In the case of these high-risk products, the NMPA encourages MAHs to prioritize in-house manufacturing. For further details on the specific obligations of MAHs, please feel free to consult BaiPharm for more information.

Related: Guidance for On-site Inspection of Drug Marketing Authorization Holders’ Outsourced Manufacturing

Grace Wang
ChemLinked Regulatory Analyst & Editor
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