HONG KONG – Looking to improve regulatory coordination and supervision of drug and food markets, the Chinese government may merge together several agencies – including the China FDA (CFDA) – into an umbrella State Drug Administration (SDA) with national scope.

Under the current system, the CFDA is not only responsible for pharma-related regulation but is also responsible for the administration of the food industry, for example enforcing food safety regulation.

The proposed overhaul would put all those activities under the purview of a larger ministry while setting up the CFDA as a sub-agency with a more narrow focus. The broader agency would also encompass bureaus to manage health insurance and social security.

"Taking into account the special nature of drug supervision, the State Drug Administration will be set up separately and managed by the State Administration of Market Supervision," said State Councillor Wang Yong, speaking during the annual meeting of China's National People's Congress (NPC) earlier this week. The NPC is akin to a congress, bringing together representatives from across the country to vote on a broad range of legislation.

"Market supervision is subject to hierarchical management, and drug regulatory agencies are only set up at the provincial level. Supervision of the behavior of drug sales and marketing is borne by the city and county market supervision departments," he said. "The China Food and Drug Administration will no longer be retained."

For now, the plan is a proposal. It has yet to be approved and adopted. Still, the proposal is likely to move forward and would bring together bodies that regulate all aspects of the health care and pharmaceutical industries. The existing CFDA would likely continue to operate as a bureau of the new administration.

"The merger does not come as a surprise," said Justin Wang, managing director of L.E.K. Consulting. In many local counties and cities the three authorities that would come under one umbrella are already merged. "This time, they are trying to make the whole hierarchy more aligned and efficient."

China has been struggling with coordinating regulations in the industry with different authorities tasked with often unclear responsibilities in regard to the drug and food industries. That lack of coordination has led to slow approvals and drug and food safety scandals.

The government now wants to create a separate state drug administration that would be managed under a national market regulatory administration.

The reform is, at this stage, a proposal and is part of a broader effort to reform a number of government agencies. For the pharmaceutical industry, the goal seems to be to create a more efficient and focused regulator with world-class standards.

For drug developers, the change should have virtually no negative impact and, hopefully, will speed up the time to market for new products while ensuring better safety oversights.

"Hopefully, the impact is minimal. Manufacturers should still expect continued improvement in the registration [and] approval process," said Wang. "There is no reason for the principles of the reform to change."

On the other side of the business, distribution and retail, the reform could actually improve supervision and make it clearer who does what at the central and local levels.

"Of course, there is uncertainty in terms of who's the next head of the new SDA, but it's unlikely to change the course of the reform that the CFDA has set forth. The fact that they are setting up a separate SDA is a clear message," Wang said.

China has been working for years to improve and streamline its regulatory structure to not only attract more innovative drugs to the market but also to foster domestic innovation while improving drug safety. The progress has, at times, been spotty, but the push has been relatively clear.

"What the CFDA has done in the past five years has been instrumental to bringing China's pharma market to new heights," said Wang. "Expediting reviews, clearing backlogs, quality consistency tests, international trial recognition. All of these were highly positive moves that are beneficial to the market, the manufacturers and ultimately the patients."

No Comments