Active pharmaceutical ingredients (APIs) are the constituents that give medicinal products their pharmacological activity and are as such the most important ingredients of medicinal products. In order to obtain permission from Chinese authorities for the import of an API into China, a foreign company must apply for an "Import Drug License" (IDL) for that specific API, to be issued by the State Drug Administration (SDA) of China.
The SDA regulation describing which requirements must be met in order to obtain an IDL is called "Provisions Governing Import Drugs". Imports of APIs into China are jeopardised by article 15.5 of this regulation and the interpretation of it given by the SDA. According to this article "The drugs in one of the following conditions shall not be approved for import registration (...) 5. Those whose quality index is lower than (...) that of the enterprise with products registered in the same category".
The SDAs interpretation comes down to the requirement that any company applying for an IDL will have, at least, to meet all specifications filed by and imposed on another/other IDL holder/s for the same product, that has/have the strictest specifications. Thus, to obtain an IDL, each applicant will have to meet the very highest quality specifications of all other IDL holders/applicants for that same API.
Indeed, the overall management of the import licenses system clearly favours local production over imports. The requirements and specifications for the IDL applications for APIs issued by the SDA are at present applied in a manner that can be in violation of article 2.2 of the TBT Agreement.
Furthermore, the way the overall system is handled is non-transparent and partial, resulting de facto in an obvious restriction of imports through an import license system. The application requirements and specifications change every time a new applicant includes one or more specifications that are additional or stricter compared to the already granted IDLs. All existing application holders must then adhere to the changed standard or have their IDL withdrawn. Therefore, the regulation and practice seem to be in violation of WTO rules and not consistent with the WTO accession obligations.
In addition, a specific concern relates to the fact that each imported API batch in the Peoples Republic of China remains subject to the routine multiple sampling and testing practice carried out by the Port Drug Inspection. Batches are systematically sampled and tested 6-7 times resulting each time in an identical outcome.
In this context, SDA has been asked to clarify the rationale for carrying out the multiple sampling and testing practices on batches that are intrinsically homogeneous and of consistent quality throughout. The homogeneous quality is after all already guaranteed by the applied manufacturing method (ICH/Q7A Guideline on GMP for API manufacture) which is one of the criteria for receiving a Chinese import registration licence from the SDA in the first place.
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