On November 27, 2024, China’s National Medical Products Administration (“NMPA”) issued the Draft Measures for Medical Representative Administration (“Draft Measures”) for public comment. While the Draft Measures retain certain provisions from the 2020 version (“2020 Measures”)—such as prohibitions against medical representatives handling accounts receivables and processing purchase and sales notes, collecting individual HCP prescription volumes, and conducting “academic promotional” activities without prior record-filings—the Draft Measures significantly expand upon the existing rules and extend the 2020 Measures’ requirements to establish a more comprehensive regulatory framework governing the activities of medical representatives and their interactions with medical institutions (i.e., hospitals) and healthcare professionals (“HCPs”), as well as the responsibilities of Marketing Authorization Holders (“MAHs”). Consistent with current policy and enforcement trends in China that have focused on close scrutiny of the relationships between drug companies and HCPs, the Draft Measures aim to strengthen the government’s oversight of the pharmaceutical industry and impose stricter compliance requirements on pharmaceutical companies.
Below are some of the key changes in the Draft Measures:
Narrowed Scope of Medical Representatives
The Draft Measures define “medical representatives” as professionals employed by MAHs to transmit, communicate, and provide feedback on drug information and engage in drug academic promotion activities. This differs from the previous definition, which allowed medical representatives to be either employees or authorized individuals of the MAH. In the case of overseas MAHs, the Draft Measures appear to indicate that the Domestic Responsible Person (see, our blog entry) would employ the medical representatives. The Draft Measures also now set standards for professional qualifications of medical representatives, requiring a bachelor’s degree or higher in medicine, pharmacy, or related fields, along with relevant clinical knowledge and work experience.
Notably, the Draft Measures limit medical representatives’ main functions to: (1) conveying drug-related information to HCPs, and (2) collecting and providing feedback on drug use, adverse reactions, and clinical needs. The removal of the tasks of formulating drug promotional plans and assisting HCPs in the proper use of drug product from medical representatives’ main responsibilities aligns with the trend of authorities exercising greater scrutiny over medical representatives’ interactions with HCPs.
Increased Compliance Responsibilities of MAHs
The Draft Measures’ provisions on the MAH-medical representative relationship are more stringent than the existing rule. The Draft Measures provide that MAHs are responsible for the academic promotional activities conducted by their medical representatives. The Draft Measures require MAHs to implement policies to manage their medical representatives, covering employment, record-filing, training, assessment, and oversight of academic promotional activities. In addition, they require MAHs to sign employment contract and compliance commitment letters with medical representatives. MAHs must terminate such an employment agreement should a violation of the compliance commitment occur, whereas the 2020 Measures only instructed MAHs to suspend the authorization for a medical representative to carry out academic promotional activities should a violation occur. Furthermore, the Draft Measures explicitly prohibit MAHs from hiring medical representatives who are unqualified or have prior commercial bribery records.
Additional Anti-Corruption Requirements
Compared with the 2020 Measures, which imposed a general prohibition on providing direct donations, grants, or sponsorships to internal departments of hospitals and HCPs, the Draft Measures expand the scope of this prohibition to include any benefits to the HCP’s spouses, children, and other relatives and related persons. The Draft Measures also expressly prohibit other kinds of benefits, such as gifts, cash, vouchers, negotiable securities, equity, and other financial products and things of value. Furthermore, the Draft Measures prohibit HCPs from accepting meals, tourist activities, sporting activities, or entertainment activities organized or paid for by medical representatives. The Draft Measures prohibit medical institutions from accepting donations, grants, sponsorships, or other transfers of value if they are conditioned upon additional drug sales.
Cross-Departmental Enforcement and Penalties
Unlike the 2020 Measures, which were formulated solely by NMPA, the development of the Draft Measures was led by NMPA, but with input from six other government agencies and institutions, including the Ministry of Public Security, the National Health Commission, the State Administration for Market Regulation, the National Healthcare Security Administration, the National Administration of Traditional Chinese Medicine, and China’s Center for Disease Prevention and Control.
This cross-departmental collaboration is reflected in the joint enforcement measures specified in articles 26 to 33 of the Draft Measures. Under these measures, information pertaining to drug-related misconduct—such as the transmission of improper benefits, information on drug quality and safety issues, failure to make required medical representative record-filings, commercial bribery, and illegal use of medical insurance funds—will be shared among the above-described agencies and institutions. This collaboration could result in penalties imposed across agencies, including the publication of the relevant misconduct, increased inspection frequency, restrictions on participation in drug procurement and national medical insurance programs, limitations on academic promotional activities, restrictions on the entry of drugs into medical institutions, and adverse impact on the MAH’s social credit evaluations.
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The Draft Measures signal continued scrutiny by China enforcement authorities over drug promotional activities, and are part of the collective effort by multiple authorities to enhance compliance in pharmaceutical promotion and distribution and combat corruption in the healthcare space. The comment period for the Draft Measures ends on December 13, 2024.
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Contributors for the China & APAC Food, Drug, Device, and Cosmetics blog:
John Balzano, Julia Post, Muyun Hu, Kaixin Fan, and Kexin Yang.