Recently, the China Food and Drug Administration ("CFDA") has issued the Circular on Relevant Matters concerning Advancing the Pilot Program for the Drug Marketing Authorization Holder (MAH) System (the "Circular").
The Circular maps out ten specific requirements, including "putting in place legal liabilities of MAHs". Further, the Circular expressly states that a MAH is allowed to entrust multiple enterprises to produce and process drugs. The processing of drugs as entrusted must involve the same prescriptions, techniques and quality criteria as those for self-processed drugs, and all legal liabilities arising from such entrusted processing should be borne by the MAH. Moreover, the Circular provides that drug research and development institutions and scientific research personnel as MAHs, may sell drugs on their own, provided that they have relevant capacities and conditions for drug business as specified in the administrative regulations for drugs; or they may entrust drug manufacturers that produce drugs on their behalf or drug operators that have obtained the drug operation license to sell their drug products. In addition, the Circular stresses that MAHs are required to give drug alerts and prepare annual reports. A MAH may collaborate with a third party and entrust it to give drug alerts for drug varieties covered under the pilot program; nonetheless, the MAH should not be exempted from its obligations and duties.