A New Milestone in China’s Regulation of Human Genetic Resources 中国人类遗传资源监管的新里程碑
On June 1, 2023, the Ministry of Science and Technology (MOST) issued the Implementation Rule for the Regulation on the Administration of Human Genetic Resources (the Implementation Rule) which will come into effect on July 1, 2023. Following the promulgation of the 2019 Regulation on the Administration of Human Genetic Resources (the Regulation), the Implementation Rule marks a significant milestone in China’s regulation of human genetic resources. The Implementation Rule clarifies many requirements of the Regulation, creating both opportunities and challenges on multinational pharmaceutical companies conducting clinical trials and human research in China. It is therefore critical for companies to fully understand these newly clarified requirements, take appropriate measures to mitigate risks, and take advantage of the opportunities created by the Implementation Rule.
This article will discuss the latest changes brought by the Implementation Rule focusing on the following five topics: (1) narrower scope of HGR information, (2) clearer definition of foreign parties, (3) more clinical trials eligible for record-filing, (4) exemptions from foreign ethics committee review, and (5) amendments to pre-approval or record-filing.
1. Narrower Scope of HGR Information
The current Regulation defines HGR broadly to include HGR materials and HGR information, stating that (1) HGR materials are genetic materials, including organs, tissues, and cells containing human genomes, genes, and other genetic substances and (2) HGR information refers to information such as data generated from HGR materials. Accordingly, as long as the information is derived from HGR materials (e.g., blood), even if the information (e.g., routine blood test report) does not have genetic properties, the information could be interpreted to be within the scope of HGR information under the Regulation.
The Implementation Rule, in comparison, narrows the scope of HGR information to be “information such as human genetic data and genomic data generated from HGR materials.” Moreover, the Implementation Rule makes it clear that HGR information does not include “clinical data, image data, protein data, and metabolome data.” Accordingly, if the clinical laboratory testing information of HGR materials does not have genetic properties, it would not be considered HGR information under the Implementation Rule.
Furthermore, according to the Q&As issued by the MOST on March 2 and April 15, 2022 (the Q&As), some examples that the agency has already carved out from the scope of HGR information, including (1) clinical image data (e.g., image data in ultrasound, CT, PET-CT, NMR, X-ray, interventional treatments, fundoscopy, endoscopy, dermoscopy, and pathology) and (2) clinical data not involving population genetics research (e.g., information on general laboratory tests, such as routine blood tests, urine tests, liver and kidney function tests, and blood biochemistry tests; individual growth and development indicators, such as height and weight; questionnaire information; and data in medical imaging results).
The narrower scope of HGR information creates opportunities for many companies, which can now exclude human research information that does not include genetic or genomic data from record-filing before provision or open access of this information to foreign parties. The record-filing requirement has been particularly challenging for companies to comply with, especially in situations such as simultaneous electronic data capture and transmission, journal article publication, conference presentation, and regulatory submission outside China, as we have discussed in an earlier article.
2. Clearer Definition of Foreign Parties
The current Regulation defines “foreign parties” broadly as (1) foreign organizations and (2) China-domiciled institutions established or actually controlled by foreign organizations or individuals. The meaning of “control” is not explained, however, and it is unclear whether foreign parties include China-domiciled companies with foreign investment in any amount, or companies without any foreign investment but which are controlled by foreign enterprises and individuals through contractual arrangements such as a VIE structure.
The Implementation Rule clarifies the meaning of “control” to include the following situations:
- Foreign organizations or individuals holding or indirectly holding more than 50% of the shares, equity, voting rights, property shares, or other similar interests in the entity
- Foreign organizations or individuals holding voting rights or other interests which are sufficient to control or exert significant influence on the decision-making, management, and other actions of the entity
- Foreign organizations or individuals, through investment, agreements, or other arrangements, sufficient to control or exert significant influence on the entity’s decision-making, management, and other actions
- Other circumstances as stipulated by laws, regulations, and rules
Accordingly, the scope of “foreign parties” will include China-domiciled companies with VIE structures, but not companies with less than 50% of foreign investment if the foreign investor does not have significant influence on the company’s decision-making or management.
In addition, all entities established in Hong Kong and Macau were previously regarded as foreign parties under the Regulation. According to the Implementation Rule, Chinese-controlled entities established in Hong Kong and Macau are treated as Chinese parties, which further narrows the scope of foreign parties.
This is a positive development for foreign-invested companies in China that do not fall within the scope of “foreign parties.” They will be able to engage in sampling and preservation of HGR in China and will no longer be restricted to utilizing HGR only when collaborating with Chinese entities.
3. More Clinical Trials Eligible for Record-Filing
The Regulation allows foreign parties to receive and use HGR in human research, including clinical trials, but restricts such activities to international collaborations with Chinese entities. Multinational companies must therefore collaborate with Chinese medical institutions and clinical testing laboratories when conducting clinical trials in China.
The Regulation requires pre-approval from or record-filing with the Human Genetic Resources Administration of China (HGRAC) before initiating HGR-related clinical trials. Record-filing is simper and faster, but applicable only when the clinical trial (1) is for the purpose of obtaining a marketing authorization of drugs or medical devices in China, (2) does not involve the export of HGR materials, and (3) is conducted “within the clinical sites” in China.
In order to meet the above third requirement of “within the clinical sites,” HGRAC requires the following:
- The HGR are sampled, tested, and analyzed and the residual samples are processed in the clinical sites
- The HGR are sampled within the clinical sites, and the third-party laboratories are contracted by the clinical sites for testing, analyzing, and residual sample processing
In practice, these requirements are difficult to meet because most third-party laboratories are contracted by sponsors, rather than clinical sites.
The Implementation Rule relaxes those requirements. As long as the HGR are sampled within the clinical sites and the testing, analysis, and residual sample processing are performed by a domestic third party designated by the clinical trial protocol, the record-filing procedures would apply. In other words, the third-party laboratory is no longer required to be contracted by clinical sites, making it possible for most clinical trials to be eligible for record-filing, which is simpler and faster than pre-approval.
Moreover, according to the Q&As, pre-approval is not required in the implementation: (1) if the foreign party provides funding without substantial participation, does not receive research-related data, and does not share research results (e.g., foreign-owned pharmaceutical companies provide clinical sites with clinical research drugs or research funding only) or (2) if in clinical trials, the sponsors, contract research organizations, and other collaborators are all Chinese parties, and only the provider of the electronic data capture (EDC) system is a foreign party.
Furthermore, record-filing has become simpler and faster, according to the Q&As. After submitting a record-filing application for clinical trials, and after being approved under the formality review, the system will automatically generate a filing number for that record which shows the record-filing is successful. Parties can then start clinical trials.
4. Exemptions From Foreign Ethics Committee Review
The Regulation requires collaborating parties to obtain ethics committee review and approval in their home countries. Under certain circumstances, however, some foreign parties have found it difficult, if not impossible, to obtain ethics committee review in their home countries because the human research is to be conducted in China.
The Implementation Rule provides an exemption for foreign parties from ethics committee review. If the foreign party is unable to provide ethics review materials from the country or region where it is located, the foreign party can submit materials indicting its acceptance of the ethics review opinions of the Chinese party.
5. Amendments to Pre-Approval or Record-Filing
The Regulation requires submitting an amendment and obtaining an approval of the amendment submission before implementing any major changes to research projects or clinical trials approved under the pre-approval process, such as a change of collaborator, research purpose, research content, or duration of collaboration. It is not clear, however, whether any changes to collaborator, research purpose, content, or duration would constitute a “major change”.
The Implementation Rule clarifies that the following matters are not major changes:
- The research content or protocol remains unchanged and there is only a 10% or less change to the total number of cases compared to the previously approved quantity
- Changes of the collaborating parties other than the sponsor, leading entity of the clinical trial, contract research organization, or third-party laboratory, or changes of the entity names of any of the collaborating parties
- The research content or protocol has been changed, but the change does not involve any change to the types, quantity, or use of HGR or the change does not exceed the previously approved scope
For non-major changes, collaborators can proceed with such changes by submitting an amendment, without having to wait and obtain approval of amendment submission.
According to the Regulation, any entity that provides or offers open access of HGR information to foreign parties must submit the information to the MOST for backup and make a record-filing with HGRAC; however, the Regulation is silent as to whether an amendment submission is required for any change to (1) provision or open access of HGR information to foreign parties or (2) clinical trials which are regulated under the record-filing process.
The Implementation Rule clarifies that:
- As to record-filing of providing HGR information to foreign parties or offering open access of HGR information, if changes relate to the use or recipients of HGR, it is required to submit an amendment and complete the record-filing process for the amendment submission before any change is made.
- As to record-filing of clinical trials, if changes relate to the type, quantity, or use of HGR, or the collaborator, research protocol, research content, or research purpose, the party who made the record-filing is required to submit an amendment and complete the record-filing process for the amendment submission; for changes not involving any of the above matters, it is only required to submit a written statement describing these changes before any change is made.
With the promulgation of the Implementation Rule, China’s regulation of HGR has reached a new milestone, which will have significant impact on multinational pharmaceutical companies operating in China. Companies should be aware of the latest changes, and adjust their strategies and practices in order to prepare for and comply with the new requirements.
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© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.