China creates new drug regulator in biggest government overhaul in years

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China plans to merge CFDA into a large market supervision agency, while maintaining drug regulation function as a separate agency under it. (daderot/Wikimedia Commons)

After about five years as a standalone agency, the China Food and Drug Administration (CFDA) will merge into a gigantic national market supervision administration, with drug regulation as a new, second-tier bureau underneath.

Presenting Tuesday before China’s legislative body during an annual conference, the government—known as the State Council—proposed to combine the CFDA with agencies that regulate business registration, quality control, pricing and anti-monopoly efforts into a new department.

“Given the unique characteristics of drug regulation, a separate state drug administration will be established and managed under the national market regulatory administration,” said the government presenter at the conference.

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Operations of the new drug regulator will only extend to the provincial level, while drug sales and marketing activities will be monitored by local market-supervision agencies.

Criticism of poor interagency coordination has been circulating in China, as at least four government bodies have as yet unclear responsibility for regulating the food and drug industry. That fragmentation is especially keen when it comes to marketed products.

The announcement lacks detailed plans for now, but it appears the specialized drug bureau will only focus on drug approvals and related accreditations, leaving post-marketing oversight to the bigger agency it will now belong to.

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China’s pharmaceutical regulatory body has gone through several rounds of structural changes since its foundation in 1998 as the State Drug Administration. Oversight of cosmetics, nutrition products and some foods were added in 2003. But after a high-profile bribery scandal involving a former director, which led to his execution in 2007, that drug agency moved under the state health department, just as the U.S. FDA resides under HHS. The CFDA as we now know it was established in 2013, when it became a standalone department managed directly by the State Council.

Revamping the drug regulator is only one of a handful of reorganizations the Chinese government is rolling out. Other health-related changes include renaming its health department to the National Health Commission and adding a few responsibilities to coordinate healthcare reforms aimed at driving down expenditure and cope with issues emerging with China's aging population, while playing down family planning functions.

The government will also set up a new bureau focused on health insurance. It will make national health insurance policies and manage social security funds. More importantly for drug companies, the new bureau will handle drug and health service pricing and negotiate for their inclusion on the National Reimbursement Drug List, which is seen as almost a guarantee of wider patient reach in China.

The proposed changes are expected to be formally approved by the country's congress within a week before the conference ends.