Opportunities and Challenges for New Chinese GMP Compliance

When the State Food and Drug Administration (SFDA) of China launched its new good manufacturing practice (GMP) guidelines in March 2011, it presented a list of new opportunities and challenges for what is to become the world's third largest pharmaceutical market by 2012.

The guidelines were the result of five years of adaptations and two public consultations and the SFDA admitted that compared to the last revised edition from 1998 – the first guidelines were published in 1988 and revised in 1992 – there is a "high increase in length".

With a large domestic population with unmet medical needs and lower costs, the changes were unlikely to deter pharmaceutical companies from making an entry into the market in the longer term, particularly since the SFDA has said it "borrowed from international experience" in the creation of the guidelines.

However, commentators have suggested that for smaller domestic manufacturers they could present a challenge. PharmaAsia News quoted an SFDA official as saying between 300 and 500 small manufacturers will be closed down as a result of the new requirements and the investment needed will run into billions.

All newly built facilities must comply with the new GMP guidelines, while existing manufacturers have been given a transfer period of five years depending on the level of risk for the product, which is in line with the new risk control concept the GMP guidelines follow.

"Borrowing advanced international experiences and in light of the actual conditions of China, under the principle of attaching equal importance to the 'software and hardware', the new version of GMP follows the concepts of quality risk management and whole process control of drug manufacturing, attaches more importance to the scientific nature, instruction function and manoeuvrability, so as to consistent with the WHO GMP," SFDA highlighted in a statement.
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Signalling its commitment to greater GMP compliance going forward, it has since revised its Measures for Drug GMP Certification, to "strengthen the management of drug GMP inspection and certification, further standardise GMP inspection and certification, advance the implementation of Good Manufacturing Practice for Drugs."

These increased standards are likely to lead to higher manufacturing costs for China's highly fragmented manufacturing industry. There are currently as many as 3,000 to 6,000 manufacturers in the country, and many of these are small to medium-sized enterprises which will bear the brunt of the compliance expenses.

A regulatory update from Bird&Bird noted: "The New GMP potentially benefits big drug companies with resources, particularly those who have already adopted higher GMP standards, whereas many smaller companies will likely be eliminated.  We would expect to see greater market consolidation in this industry. "

The relatively long timeline for implementation of the new proposals means that their effects are likely to be felt gradually, both domestically and in the wider industry.

China is continuing to build its reputation as a safe manufacturing environment, in particular after the 2008 Herapin contamination. Drugs containing an active pharmaceutical ingredient from China were linked to severe adverse reactions, including death, and three years down the line the United States Food and Drug Administration remains under pressure to determine the exact cause of the contamination.

"[The new] developments will significantly boost the overall quality of China's pharmaceutical industry which will improve the competitiveness of Chinese pharmaceutical companies on the global market. 

"The New GMP demonstrates China's continuing determination to push its domestic drug enterprises to become true world class players in the global pharmaceutical industry," Bird&Bird concluded.

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