16 March, 2016
On 26 February 2016, the China Food and Drug Administration (CFDA) published the long-awaited rules reforming the current health food registration regime. The newly-published Administrative Measures on Health Food Registration and Filing (the “2016 Measures”) will take effect on 1 July 2016.
Market entry is made easier – the new ingredient-based regulatory regime will be more predictable and transparent and greatly eliminate administrative burden for both CFDA and the market players. The 2016 Measures will certainly open up the gate of health food market even wider to more companies in China and abroad.
Implications for Foreign Health Food Companies – the rationalized registration process will render it easier for foreign companies to enter the market. However, it is now worth considering establishing manufacturing capability within China in order to take advantage of the newly-introduced filing system and gain closer access to the ever-growing Chinese market for health foods.
Background
The health food approval regime was first introduced into practice in China by the then Ministry of Health in 1996, which laid the foundation for a product-based regulatory regime for health food. In 2003, the then newly-established State Food and Drug Administration (SFDA) acquired from the then Ministry of Health the power to review and approve the application for health food registration and in 2005 published the Interim Administrative Measures for Health Food Registration (the “2005 Measures”), which established a full-fledged product-based registration system. The 2005 Measures require that all health foods, whether manufactured in China or imported into China, be registered with SFDA before being sold in the Chinese market. As a result, all health foods must go through the same series of tests and review procedures irrespective of their functional ingredients. The lengthy registration process often takes years and is rather costly.
In 2013, SFDA was renamed CFDA and was raised to ministerial level, underscoring the Government’s determination to reform the food and drug regulatory regime. In April 2015, the National People’s Congress promulgated the revised Food Safety Law, which, amongst other measures, for the first time introduced a filing system for health foods, alongside the existing registration regime. In July 2015, CFDA issued the draft 2016 Measures to seek public opinion, heralding the coming of a new regulatory regime for health foods.
Highlights of the 2016 Measures
Introduction of a Filing System
Under the filing system introduced by the 2016 Measures, CFDA will not carry out any of the testing or technical review procedures as required for the registration process and may make the filing decision on the same day as the application upon submission of a complete set of materials. Under the 2016 Measures, the following health foods will be subject to a filing system: (i) health foods containing ingredients covered by the Health Food Ingredient Catalogue (the “Ingredient Catalogue”); and (ii) nutrient supplements (e.g. vitamins and minerals) imported into China for the first time.
Health foods (i) containing ingredients not covered by the Ingredient Catalogue or (ii) imported for the first time (excluding nutrient supplements) are still required to be registered with CFDA. Nonetheless, a large number of health foods will therefore be exempted from the registration process and the manufacturers of such health foods will now benefit from a much more expedient filing system.
An Ingredient-based Regulatory Regime
Unlike the previous product-based regulatory regime, under the 2016 Measures, whether the health foods will be subject to a registration or filing process mainly depends on whether the ingredients are covered by the Ingredients Catalogue. The regulatory focus is now shifted from specific products to the functional ingredients of the product and whether the ingredient is evidentially safe and functional. This is in line with the international best practice and will greatly reduce the administrative burden for both the regulators and the health food manufacturers.
Notably, the 2016 Measures also delete the definition of health food and instead provide that the health functional claims made by health foods must have already been listed in the Health Food Functional Claims Catalogue (the “Claims Catalogue”), marking a change from the original product-focused policy.
The Ingredients Catalogue has not been officially published yet, but CFDA released the draft Administrative Measures on Health Food Functional Claims Catalogue and Raw Materials Catalogue in July 2015 and the draft Ingredients Catalogue (first batch) in February 2016, to seek public opinion. We will keep a close eye on the development of the regulations.
Delegation of Power
CFDA will delegate the power to accept and handle filings of health foods to their branches at the provincial level, except for nutrient supplements imported into China for the first time, which are to be filed with central CFDA. This would also expedite the filing process and help reduce the cost for filings. In the meantime, CFDA itself will focus on new ingredients that are not contained in the Ingredients Catalogue and on the health foods imported into China for the first time.
Rationalized Registration Process
For registration process, applicants may now submit their application directly to CFDA under the 2016 Measures instead of the provincial CFDA office for preliminary review first, and are not required to conduct prior testing with CFDA. In addition, the technical review, on-site inspection and re-examination process may now be conducted concurrently with completion of each process subject to a specified timeframe. Under the 2005 Measures, however, the applicant must first submit samples and materials for detailed testing and examination and obtain a test report from CFDA testing institutions before applying for registration, and the subsequent on-site inspection, re-examination and technical review have to be conducted sequentially.
The new process will no doubt substantially shorten the registration process.
Our Observations
Market Entry Made Easier
An ingredient-based regulatory regime will be more predictable and transparent and greatly eliminate administrative burden for both CFDA and the market players. The streamlined registration process together with the filing system will significantly reduce the time, cost and other resources consumed in the administrative process. The 2016 Measures will certainly open up the gate of health food market even wider to more companies in China and abroad. In the meantime, health food companies are encouraged to pay close attention to the development of Ingredients Catalogue, which we expect to be published within this year.
Implications for Foreign Health Food Companies
A large number of foreign health food manufacturers, who are yet to export their products to China, are still subject to the registration process (except for nutrient supplements), whereas most Chinese manufactures are able to benefit from the filing system. While the rationalized registration process will render it easier for foreign companies to enter the market, it is now worth considering establishing manufacturing capability within China in order to take advantage of the newly-introduced filing system and gain closer access to the ever-growing Chinese appetite for health foods.
For further information, please contact:
Karen Ip, Partner, Herbert Smith Freehills
karen.ip@hsf.com
