1. Introduction
On May 1, 2024, the "Administrative Regulations M88 game APK the People's Republic M88 game APK China on Human Genetic Resources" (Revised in 2024, "M88 game APK Regulations") came into effect, M88 game APKficially announcing that the competent authority for the management M88 game APK human genetic resources ("HGR") in China had moved from the Ministry M88 game APK Science and Technology ("MOST") to M88 game APK National Health Commission ("NHC"). The change M88 game APK authority began a year ago. In March 2023, the State Council issued the "Reform Plan for the Party and State Institutions", transferring the China National Center for Biotechnology Development ("CNCBD"), which was directly under MOST, to the NHC, and the M88 game APKfice M88 game APK Human Genetic Resources Administration M88 game APK China (“HGRAC") under CNCBD was also transferred. On July 1, 2023, MOST announced the ceased operation M88 game APK HGRAC, entrusted CNCBD to carry out the technical work related to the management M88 game APK HGR, and the management information system was launched for trial operation. On the same day, the "Implementing Rules for the Administrative Regulation on Human Genetic Resources" ("Implementing Rules") were implemented, and M88 game APK new service guides issued by MOST took effect.
For more information on M88 game APK Implementation Rules, please refer to articles we recently published such as "JunHe Legal Review | The Final Step - Issuance M88 game APK the 'Implementing Rules for the Administrative Regulation on Human Genetic Resources'" M88 game APK "JunHe Legal Review | Half a Year After the Implementing Rules, What Changes Have There Been in the Regulation M88 game APK Human Genetic Resources?" (Both articles are in Chinese).
In combination with our recent practical experience, this article shares our observations on common issues in the supervision and compliance M88 game APK human genetic resources for pharmaceutical enterprises. It covers three subjects M88 game APK general concern to the industry : the identification M88 game APK foreign entities, international cooperation, and the external provision and open access M88 game APK human genetic resource information ("HGR Information"). In international cooperation projects and the external provision and open access M88 game APK HGR Information, enterprises may face additional compliance obligations regarding personal information protection, which we also cover in this article.
2. Identification M88 game APK Foreign Entities
If an enterprise is identified as a foreign entity, its activities involving HGR shall be subject to strict regulations, including prohibitions against the collection, preservation, and overseas provision M88 game APK HGR within or from China. If a foreign entity wishes to utilize HGR, it shall cooperate with a Chinese entity and apply for administrative permission for international cooperation projects or complete record-filing for international cooperative clinical trials. Identifying a foreign entity is therefore a very important and practical issue.
According to the Regulations and the Implementing Rules, a foreign entity is defined as “an overseas organization and institution established or actually controlled by overseas organizations or individuals”. The term "institutions established or actually controlled by overseas organizations or individuals" includes : (i) overseas organizations or individuals directly or indirectly holding more than 50% M88 game APK the equity, shares, voting rights, property shares, or similar interests (collectively referred to as "Interests") in the institution; (ii) overseas organizations or individuals directly or indirectly holding less than 50% M88 game APK the Interests in the institution, but the voting rights or other interests they enjoy are sufficient to dominate or exert significant influence over the institution's decision-making, management, and other actions; and (iii) overseas organizations or individuals, through investment relationships, agreements, or other arrangements, are able to dominate or exert significant influence over the institution's decision-making, management, and other actions. Additionally, the Implementing Rules stipulate that institutions in Hong Kong and Macau that are ultimately controlled by domestic capital are considered Chinese entities.
Here is our in-depth analysis based on M88 game APKse definitions:
(1)Overseas Organizations
M88 game APK term “overseas organizations” is relatively straightforward and refers to institutions established outside mainland China. M88 game APKrefore, companies established in foreign countries as well as in Hong Kong, Macau, and Taiwan regions are considered foreign entities. M88 game APK Implementing Rules provide an exception on this point in that institutions established in Hong Kong and Macau that are ultimately controlled by domestic capital ("Domestic-Controlled Hong Kong M88 game APK Macau Institutions") are regarded as Chinese entities. However, based on our recent communications with M88 game APK competent authorities, M88 game APKre is still no unified approach in practice regarding wheM88 game APKr M88 game APK aforementioned exception can be applied, requiring a case-by-case analysis.
(2)Institutions Established or Actually Controlled by Overseas Organizations
An institution established or actually controlled by overseas organizations or individuals refers to an institution established in mainland China but is established or controlled by overseas organizations or individuals (M88 game APK "Domestic Institution").
In practice, if a Domestic Institution's Interests are 100 % directly or indirectly held by an overseas organization or controlled by an overseas organization through agreements, even if the ultimate controller M88 game APK the overseas organization is a Chinese citizen after a look-through check, the Domestic Institution may still be considered a foreign entity by the competent authorities. If the Interests M88 game APK the Domestic Institution are not 100 % directly or indirectly held by an overseas organization (for example, in a Sino-foreign joint venture), it is generally judged according to the standards M88 game APK the Implementing Rules through a look-through check to the ultimate controller.
Regarding the nature M88 game APK H-share listed companies, we believe they can also apply the standards in the Implementing Rules by a look-through check to verify the ultimate controller, to distinguish the overseas listed shares (H-shares), the unlisted shares held by foreign shareholders (commonly referred to as "Foreign Capital Shares"), and the unlisted shares held by domestic shareholders (commonly referred to as "Domestic Capital Shares").
3. International Cooperation in Human Genetic Resources – Using Clinical Trials M88 game APK Investigator-Initiated Clinical Studies as an Example
Biomedical enterprises that conduct or fund R&D activities, such as preclinical research, investigator-initiated trials (IIT), M88 game APK clinical trials, may incur administrative permission M88 game APK record-filing procedures for international cooperation in HGR.
Using international cooperative clinical trials and investigator-initiated research conducted for the purpose M88 game APK the marketing authorization M88 game APK drugs or medical devices as an example, here is an analysis M88 game APK the necessity M88 game APK application, as well as the choice between two pathways - approval or filing.
3.1Necessity M88 game APK Application
Among M88 game APK various parties involved in a clinical trial, if M88 game APK sponsor, contract research organization or third-party laboratory or testing institution are foreign entities, M88 game APKn an application for international cooperation is usually required. If M88 game APK aforementioned entities are all Chinese, and M88 game APK electronic data capture vendor is M88 game APK only foreign entity, M88 game APKn M88 game APKre is no need to apply for international cooperation.
In investigator-initiated clinical studies funded by foreign entities, if M88 game APK foreign entity does not participate substantially in M88 game APK research and does not share M88 game APK research results (for example, if M88 game APK foreign entity only provides M88 game APK clinical study medication or M88 game APK partial research funding to M88 game APK medical institution without being privy to M88 game APK research results), M88 game APKre is no need to apply for international cooperation.
3.2Path Selection
If it is determined that international cooperation needs to be applied, a furM88 game APKr judgment should be made on wheM88 game APKr to apply for administrative approval or record-filing procedures.
According to the Implementing Rules, international cooperative clinical trials conducted for obtaining marketing authorization M88 game APK drugs or medical devices do not need to go through administrative approval and are only subject to record-filing procedures, provided the following prerequisites are met:
i. There is no outbound transfer M88 game APK human genetic resource materials ("HGR Materials");
ii. M88 game APK HGR Materials are collected within medical institutions; and
iii. The testing, analysis and processing M88 game APK the remaining HGR Materials is conducted within medical institutions or by domestic entities designated in the clinical trial protocol.
However, if a newly initiated international cooperative clinical trial involves exploratory research, or if an ongoing international cooperative clinical trial intends to amend M88 game APK research protocol to include exploratory research, M88 game APKn it is generally necessary to apply separately for administrative approval for M88 game APK exploratory research. International cooperative clinical trials and investigator-initiated clinical studies funded by pharmaceutical enterprises that do not meet M88 game APK above conditions are not applicable under M88 game APK record-filing procedure.
4. External Provision M88 game APK Open Access to HGR Information by Foreign Entities – Using License-out as an Example
4.1Scenarios for the External Provision M88 game APK HGR Information in License-out Projects
In license-out projects, there may be scenarios where the HGR Information generated from domestic clinical trials should be provided to foreign licensees. In these cases, the preliminary research and development has been completed (i.e., the relevant HGR Information has been generated), and the provision M88 game APK such information to foreign licensees should be conditional upon the completion M88 game APK the HGR regulatory procedures. Generally, the competent authorities require the completion M88 game APK backup and record-filing procedures for the external provision and open access M88 game APK HGR Information, after which, the HGR Information may be provided to the foreign licensees. It is important to note that according to the Regulations, if the licensor (the sponsor M88 game APK the clinical trial) itself is a foreign entity, it cannot directly provide HGR Information to foreign licensees and should make alternative arrangements.
4.2Security Reviews for the Provision M88 game APK Specific HGR Information
According to the Implementing Rules, the provision M88 game APK specific HGR Information to foreign entities necessitates a further security review process supervised by the NHC. This specific HGR Information includes: (i) HGR Information from important genetic families; (ii) HGR Information from specific regions; (iii) exome sequencing and the genome sequencing information resources M88 game APK more than 500 cases; and (iv) other situations that may affect the public health, national security, and the social and public interest M88 game APK China.
Currently, M88 game APK specific processes and rules regarding security reviews have not been published by M88 game APK authorities.
5. Personal Information Outbound Transfers
In international cooperation and license-out projects carried out by pharmaceutical enterprises, in addition to the HGR compliance obligations, there may be other requirements concerning the outbound transfer M88 game APK personal information.
A Regulatory Comparison between HGR Information M88 game APK Personal Information
To help readers understand the different legislative and regulatory approaches in practice, the following table M88 game APKfers a comparison M88 game APK the main differences between HGR Information and personal information.
Requirement
HGR Information
Personal Information
Competent Authority
NHC
Cyberspace Administration M88 game APK China or local cyberspace administrations ( "CAC")
Concept M88 game APK Outbound Transfer
Providing or granting access M88 game APK HGR Information to foreign entities
Transferring personal information collected M88 game APK generated domestically to overseas;
Inquiring, retrieving, downloading, or exporting personal information stored domestically by foreign institutions, organizations or individuals
Application Entity
Jointly handled by both M88 game APK Chinese and foreign entities in M88 game APK international cooperation;
Handled by M88 game APK Chinese entity in M88 game APK external provision
Handled by M88 game APK data processor
Subject M88 game APK Outbound Transfer
HGR Information (mainly genetic data)
Personal information (including personal medical M88 game APK health information, etc.), important data (if applicable)
Recipient
Foreign entities (including pharmaceutical enterprises set up in China but identified as foreign entities)
Overseas recipients
Regulatory Principles
The source M88 game APK HGR intended for use/outbound transfer is legal; the type and quantity match the research content; the purpose M88 game APK the outbound transfer is legal
Overseas recipients
HGR M88 game APK personal informationhave certain differences in aspects such as the "subject M88 game APK the outbound transfer","the concept M88 game APK the outbound transfer", and "the recipient", which lead to different triggering conditions for administrative application that need the readers’ attention.
5.1Analysis M88 game APK Personal Information Outbound Transfers
Based on our experience, in international cooperation and external provisions and the open access M88 game APK HGR Information mentioned above, outbound transfer M88 game APK personal information may incur in the following scenarios:
Analysis M88 game APK Personal Information Outbound Transfer
International Cooperative Clinical Trial
Common scenarios include but are not limited to:
Clinical trials conducted by pharmaceutical enterprises in China as foreign entities for obtaining drug or medical device marketing authorization;
International multi-regional clinical trials (MRCT) sponsored by domestic M88 game APK foreign pharmaceutical enterprises.
In these scenarios, the outbound transfer M88 game APK personal information may include the clinical data M88 game APK domestic trial subjects, and adverse drug reaction monitoring data.
License-out
Domestic pharmaceutical entities license their patents, know-how, etc., to overseas licensees, and provide data generated from clinical trials and data from Investigator-Initiated Trials (IIT) conducted in cooperation with medical institutions to overseas licensees. The clinical trial data provided to overseas licensees generally includes the personal information M88 game APK the trial subjects.
(1)" Subject M88 game APK Outbound Transfer"
According to M88 game APK HGR regulations, data/information transferred outbound that does not contain genetic or genomic data does not constitute "HGR Information".
From the perspective M88 game APK the CAC, the medical and health data M88 game APK trial subjects collected and processed in clinical trials which can individually or in combination with other information identify specific trial subjects is considered personal information, especially personal health and physiological information that may constitute sensitive personal information; the genetic data generated from HGR materials that the HGRAC supervises may also be classified as personal biometric information and thus considered sensitive personal information.
Outbound transfer applications to M88 game APK NHC and M88 game APK CAC are not mutually exclusive and need to be handled in parallel.
(2)The concept M88 game APK "outbound transfer" and the "recipient"
The regulatory objects M88 game APK human genetic resource regulations are generally institutions; however from the perspective M88 game APK the CAC, the overseas recipients include not only institutions but also natural persons.
For example, a domestic pharmaceutical enterprise allows its Chinese employees located overseas to access a small amount M88 game APK the sensitive personal information M88 game APK trial subjects (with read-only permission). This situation is different from commonly seen outbound data transferring scenarios but does not fall outside the scope M88 game APK the cross-border data transfer regulations. Based on our experience, the regulatory approach M88 game APK some local CAC authorities is that when the amount M88 game APK sensitive personal information is small, the urgency and priority for the pharmaceutical enterprises to implement the recordation M88 game APK standard contracts can be moderated; as the volume M88 game APK data transferring outbound increases and overseas commercial entities are established in the future, the recordation M88 game APK standard contracts for the outbound transfer M88 game APK personal information shall then be considered.
We suggest that when enterprises have personal information transferred abroad, they should comprehensively evaluate the supervision M88 game APK the CAC in different regions and phases as well as the specific nature M88 game APK the overseas natural persons (such as their nationality, whether they are internal employees M88 game APK a pharmaceutical enterprise, etc.), the purpose, authority, and scope M88 game APK accessing the data, the content, sensitivity, and magnitude M88 game APK the data involved, and other factors to carefully determine the applicable mechanism for transferring personal information abroad.
5.2Selection M88 game APK Personal Information Outbound Transfer Pathways
The "Personal Information Protection Law" and the "Provisions on Promoting and Regulating Cross-border Data Flows" announced by the Cyberspace Administration M88 game APK China on March 22, 2024, provide clearer regulations on the data outbound transfer mechanisms that data processors should distinguish and choose when transferring data abroad.
Outbound Transfer Mechanisms | Applicable Scenarios |
Security Assessment M88 game APK Outbound Data Transfer |
|
Recordation M88 game APK the Standard Contracts for the Outbound Transfer M88 game APK Personal Information |
|
Personal Information Protection Certification | |
Note: The above outbound transfer mechanisms are exempted under certain statutory circumstances. Pharmaceutical enterprises should pay attention to the regional special provisions M88 game APK the outbound transfer regulations such as regulations M88 game APK the free trade zones where they are located. | |
6. Conclusion
It is understood that after the change M88 game APK competent authority for HGR supervision, the revision M88 game APK the Implementing Rules was also put on the agenda. According to public information, from December 2023 to March 2024, the NHC organized more than three expert meetings to discuss the optimization M88 game APK HGR supervision. The practical requirements for pharmaceutical enterprises to comply with HGR supervision may undergo further changes in the future. We will continue to monitor the regulatory dynamics and share practical experience with the industry in a timely manner.
