On July 1, 2019, the Administrative Regulations on Human Genetic Resources (人类遗传资源管理条例) (the “Regulations”) issued by the State Council of the People’s Republic of China (the “PRC”) came into effect. On October 17, 2020, the Standing Committee of the PRC National People’s Congress promulgated the Biosecurity Law (中华人民共和国生物安全法) (the “Biosecurity Law”), which came into effect as of April 15, 2021. Having replaced its predecessor, the Interim Measures for the Administration of HGR (人类遗传资源管理暂行办法), the Regulations now form the basis of PRC’s regime on its human genetic resources, and govern the collection, preservation, use, and external provision of human genetic resources abroad. The Biosecurity Law further reinforces the Regulations by asserting PRC’s sovereignty over its human genetic resources and re-iterating certain key provisions under the Regulations.
With the increase of cross-border R&D collaborations and international multi-site clinical trials for drugs and medical devices, it is not uncommon for foreign organizations or individuals (or domestic entities formed or controlled by them) (the “Foreign Entities”) to handle human genetic resources sourced from the PRC. These Foreign Entities, as well as PRC institutions and entities looking to engage Foreign Entities in such collaborations or studies, should be aware of the requirements and restrictions imposed on them under the Regulation and Biosecurity Law, as discussed below in further details.
DEFINITION AND SCOPE OF APPLICATION
Both the Regulations and Biosecurity Law define “human genetic resources” to include (1) human genetic resource materials, which refer to genetic materials such as organs, tissues and cells that contain human genomes and genes, and (2) human genetic resource information, which refers to information and data generated from human genetic resource materials. References to “human genetic resources” in this article mean human genetic resources sourced from the PRC.
Entities or individuals that collect, preserve, use, and provide human genetic resources abroad must observe the provisions under the Regulations and Chapter 6 of the Biosecurity Law. However, if such activities are conducted for the purpose of clinical diagnosis and treatment, blood supplying services, criminal investigations, doping detections, and funeral and interment services, then the human genetic resources provisions under the Regulations and Biosecurity Law are not applicable. These exempted activities must in any event adhere to provisions of relevant laws and administrative regulations.
APPROVAL AND FILING REQUIREMENTS FOR COLLECTING, PRESERVING, USING AND PROVIDING HUMAN GENETIC RESOURCES
Entities or individuals that wish to conduct any of the following activities must obtain prior approval from the Ministry of Science and Technology of State Council (“MOST”):
- Collection of human genetic resources of significant hereditary families, specific regions or human genetic resources of a certain type or quantity stipulated by MOST;
- Preservation of human genetic resources;
- Use of human genetic resources for international scientific studies collaboration; and
- Transport, mailing and taking of human genetic resource materials out of the PRC.
The following activities do not require prior approval from MOST, but are subject to filing requirements:
- Research institutions, higher education institutions, medical institutions or enterprises in the PRC (the “PRC Entities”) that intend to provide human genetic resource information to Foreign Entities, or to allow Foreign Entities access to such human genetic resource information, must file with MOST and submit to MOST backup copies of such human genetic resource information; and
- Parties that intend to use human genetic resources in international clinical trials to be conducted in a clinical institution for the purpose of obtaining drugs or medical devices market approvals in the PRC, but without the need to export human genetic resources materials, must file with MOST records stating the type, quantity and purpose of such human genetic resources. Please see the section on “Scope and filing procedure for use of human genetic resources in international clinical trials” below for further details.
It is also worth noting that trading of human genetic resources is strictly prohibited, but payment of reasonable costs and expenses arising from the provision or use of human genetic resources will not be considered an act of “trading.”
FOREIGN ENTITIES MUST COLLABORATE WITH PRC ENTITIES TO USE HUMAN GENETIC RESOURCES FOR INTERNATIONAL SCIENTIFIC STUDIES
The term “Foreign Entities” includes foreign corporate entities, organizations or individuals, and domestic entities formed or controlled by them. According to previous practices, MOST may interpret “control” as direct or indirect control of the domestic entity, whether through equity and/or bonds, irrespective of the percentage or size of the interest. As a general rule, Foreign Entities are prohibited from collecting or preserving human genetic resources in the PRC, or supplying human genetic resources to entities abroad.
Having said that, an exemption is provided for international scientific studies collaboration. If a Foreign Entity wishes to use human genetic resources for scientific studies, it must collaborate with a PRC Entity. The Foreign Entity and the PRC Entity must jointly submit an application to obtain approval from MOST for the use of human genetic resources, while satisfying the following criteria:
- The collaboration poses no threat to public health, national security, and the public interest in the PRC;
- Both entities are legal persons that have the capabilities to carry out the collaboration;
- The purpose and outline of the collaboration are clear and lawful;
- The plan and duration of the collaboration are reasonable;
- The human genetic resources are sourced legally, and are consistent with the outline in terms of type and quantity;
- The collaboration has passed ethics review by the respective jurisdictions of both entities; and
- Attribution of achievements is clear, and there is a reasonable and clear benefit distribution plan in place.
In addition, the PRC Entity must substantively participate in the collaboration studies throughout the process, and have access to all generated records and data information. As such, Foreign Entities cannot simply engage PRC Entities solely for the purpose of satisfying the regulatory requirements to obtain rights to use PRC human genetic resources.
ATTRIBUTION OF RIGHTS DERIVED FROM INTERNATIONAL SCIENTIFIC STUDIES COLLABORATION
Patents derived from an international scientific studies collaboration are to be filed and owned jointly by the Foreign Entity and PRC Entity. Both parties are free to enter into collaborative agreements to agree on the rights to use and transfer scientific results from the collaboration, as well as commercial benefit or reward sharing arrangements. In the absence of agreements, the Regulations expressly stipulate that: (a) both parties will have rights to use the scientific results, (b) if one party wishes to transfer the results, it will need to obtain the other party’s consent), and (c) the parties are to share any gained commercial benefit in proportion to their respective contribution to the collaboration.
However, parties should not draw a general conclusion that all intellectual property rights or other rights derived from their collaboration should be shared equally. Different considerations may be given to different types of studies. For instance, in clinical research, some studies are based on reaching a predetermined target (e.g., endpoints in a drug safety or efficacy study), while other studies may not have such clear scope or concept and are exploratory in nature. There have been cases where MOST, having evaluated the technical aspects of the submission, determined that the parties should share intellectual property rights together with research institutions for an exploratory study; while for other targeted and exploratory studies, it determined that patent rights should be attributed to one party only.
SCOPE AND FILING PROCEDURE FOR USE OF HUMAN GENETIC RESOURCES IN INTERNATIONAL CLINICAL TRIALS
MOST issued filing guidelines targeted at entities and individuals that wish to use human genetic resources in international clinical trials to be conducted in clinical institutions for the purpose of obtaining drug or medical device market approvals in the PRC. However, the guidelines are only applicable to international clinical trials that do not involve the export of human genetic resource materials, as exports of human genetic resource materials would require MOST approvals. To clarify, parties are not required to seek MOST approvals if only human genetic resource information are provided to or shared with Foreign Entities during international clinical trials (for instance, clinical data on the human genetic resource are provided to Foreign Entities to seek FDA market approval), but are required to make a filing with MOST and submit backup copies of such information.
According to the guidelines, “to be conducted in clinical institutions” means:
- The collection, testing, analysis, processing of remaining samples and the performance other related activities of human genetic resources are to be conducted in clinical institutions only; or
- The collection of human genetic resources is to be conducted in clinical institutions, while the testing, analysis, processing of remaining samples and the performance other related activities are to be conducted by entities commissioned by the clinical institutions. A formal agreement must be executed between the clinical institutions and commissioned entities, clearly specifying the type, quantity, content of testing, method of transfer, and the processing of remaining samples and data of the human genetic resources in question. The clinical institutions are to be liable for the activities to be performed by the commissioned entities.
Only legal entities established in the PRC are eligible to make the filing. Entities are to submit the required filing materials electronically through MOST’s online platform, and must provide certain information as set out in a standard form, including details of: (i) the clinical trials, such as the trial period, number of subjects, diseases/conditions and drugs concerned, and research plan; (ii) participating entities and clinical institutions; (iii) human genetic resources to be used, such as the type, quantity and other specifications, and details on biomarkers (if any); (iv) disposal plan of remaining genetic samples; and (v) the individuals in the research team. Supporting documents include corporate certificates, informed consents, ethics review approvals, research plan, international collaboration agreements, agreements executed with commissioned entities, agreements of transfer, and other approvals, notices and filings related to the clinical trials.
For multicenter clinical trials, only one consolidated filing should be made, and each participating medical or clinical center should submit its ethics review approval as part of the consolidated filing.
Parties can proceed with the international clinical trials once the materials have been successfully submitted and a confirmatory filing number has been received. Any subsequent changes to the purpose, content, research plan and period of the collaboration (other than changes to the research plan that are not related to the type, quantity or purpose of the human genetic resources) are material changes that require the parties to make a new filing based on new information.
The Regulations and Biosecurity Law lay down a range of legal liabilities and penalties for violations. For example, entities or individuals that collect or preserve, or use human genetic resources for international scientific collaboration, without obtaining MOST approvals are liable to a fine of RMB500,000 – RMB5 million, with its unlawful gains and sourced human genetic resources being confiscated. If the unlawful gains exceed RMB1 million, the amount of fine will be five to 10 times the amount of such gain. Foreign Entities that collect, preserve, supply abroad or use human genetic resources without collaborating with PRC Entities are liable to a fine of RMB1 million – RMB10 million, with its unlawful gains and sourced human genetic resources being confiscated. If the unlawful gains exceed RMB1 million, the amount of fine will be 10 to 20 times the amount of such gain. For certain violations, MOST may ban liable entities from engaging in collecting, preserving or providing human genetic resources for one to five years, or even permanently in severe cases.
Legal representatives, persons-in-charge, officers with direct responsibilities and other responsible persons of the liable entities may also be subject to penalties, including confiscation of unlawful gains, fines of up to RMB500,000, and run the risk of being banned from participating in human genetic resources activities for a period of time.
RECENT MOST APPROVAL RESULTS
According to recent approval results announced by MOST, MOST has approved all 29 applications that it accepted during the period from December 31, 2021 to January 6, 2022. Out of the 29 approvals, nine approvals were granted for collection of human genetic resources, 19 approvals were granted for use of human genetic resources for international scientific studies collaboration, and one approval was granted for export of human genetic resource materials out of the PRC. The average time that MOST took to approve is seven working days, with the longest time for approval being nine working days.
 According to the Service Guide for Administrative Licensing Items concerning Examination and Approval of Sampling, Collecting, Trading, Exporting Human Genetic Resources, or Taking Such Resources out of the PRC (人类遗传资源采集、收集、买卖、出口、出境审批行政许可事项服务指南) (the “Guide”): (i) human genetic resources of significant hereditary families refer to genetic resources of genetic diseases or specific physical characteristics that occur in 2 or more familial generations or blood-related groups, such as asthma and cancer; and (ii) human genetic resources of specific regions refer to genetic resources of people that are long-time residents of specific environments and have adapted unique physical or physiological traits, such as ethnic minorities living in geographically isolated areas, e.g., on islands.
 According to a “Applications Conditions” announcement by MOST, Hong Kong, Macau and Taiwan corporate entities, organization or individuals, and domestic entities formed or controlled by them, are deemed “Foreign Entities.”