Compliance Highlights and Strategies in High-Risk Clinical Research Landscape

Authors: Aaron GU丨Sophie SHI丨Yvaine LIU丨Cathy ZHENG丨Matt ZHANG丨Franky YU丨Naifang ZHANG丨Shuwen SUN丨Krystal ZHAO丨Lingyu SHENG

Several news have recently drawn widespread attention in China's life sciences industry, bringing compliance issues in clinical research under the spotlight.  Numerous companies have reached out to us for urgent consultations on these matters.  As China's clinical research and drug development enter a new stage of growth, how to effectively manage the compliance risk in the meantime of development has become a shared concern across the industry.

Clinical research in China has been developing rapidly, gradually positioning China as a key player in the global clinical landscape.  An increasing number of multinational life sciences companies are choosing to carry out early-stage investigator-initiated trials (IITs) and registration clinical trials in China.  This trend reflects over a decade of continuous regulatory reform, during which China has steadily refined its review and approval processes as well as clinical data oversight.  As a result, the quality of trials conducted in China has received growing recognition from international regulatory authorities.  (For our previous insights on the recent regulatory developments in China's clinical research sector, please refer to: 汉坤 • 观点 | 热点追踪：药物临床试验机构日常监管风险提示；汉坤 • 观点 | 解读“722风暴”后时代药物临床试验机构检查新规) At the same time, China has been continuously strengthening the regulation of human genetic resources (HGR), and also streamlining compliance requirements for clinical research to effectively support innovation and development.  (For our insights on the HGR regulation in China, please refer to: Highlights on HGR Regulation Implementation Rules; Key Takeaways on the New HGR FAQs Issued by the MOST of China; 汉坤 • 快评 | 《人类遗传资源管理条例》再次修订)

China's clinical research landscape has matured in parallel.  Key stakeholders, including clinical sites (Sites), principal investigators (PIs), contract research organizations (CROs) and site management organizations (SMOs), have significantly improved their expertise in execution and operation in clinical research projects, resulting in higher quality and more efficient trials.  Meanwhile, as Chinese drug and medical device companies rapidly expand their global footprint, license-out deals and collaborations with multinational life science companies are booming.  This momentum is advancing China's position within the global landscape of drug registration and clinical development.  (For our insights on licensing transactions in life science sector, please refer to: 2024 Data Analytics: China Life Sciences NewCo & Licensing Terms; Six Key Insights into China Biotech's NewCo Model; Insights into China Biotech's New Approach: Spin-off-NewCo Model; Anatomy of Licensing Deals from China Regulatory Perspective)

Key compliance highlights in life sciences clinical research

I.   Data integrity and quality management

The authenticity, completeness, and integrity of clinical research data remain fundamental to the success of any clinical research.  Incidents such as data falsification, non-compliant subject enrollment, or manipulation of follow-up records can severely undermine data quality, jeopardize product registration and commercialization, and may trigger regulatory penalties by the authorities as well as reputational damage to the company.

China has been continuously improving its regulatory framework for clinical research quality.  For example, the Measures for Supervision and Inspection of Drug Clinical Trial Institutions (Trial) and the Measures for Supervision and Inspection of Medical Device Clinical Trial Institutions, both implemented in 2024, place emphasis on strengthening oversight of institutions where investigators are concurrently involved in a high volume of clinical trials, or where limited management capacity or insufficient research staffing may pose risks to data integrity and overall trial quality.  China has developed a tiered and integrated regulatory framework for clinical research quality management—ranging from overarching laws such as the Drug Administration Law and the Regulation for the Supervision and Administration of Medical Devices, to practical guidelines including the Key Points and Criteria for Drug Registration Inspection (Trial), the Key Points and Criteria for Supervision and Inspection of Drug Clinical Trial Institutions (Trial) and the Key Points and Criteria for Supervision and Inspection of Medical Device Clinical Trial Projects.  These developments reflect China's increasingly rigorous and granular approach to ensuring clinical trial quality.

Companies are reminded to stay aligned with all applicable and evolving regulatory requirements, and to take active steps to strengthen oversight of clinical research quality.

II.   Anti-corruption compliance

Life sciences industry has long been a primary focus of China's anti-corruption regulatory enforcement, and clinical research remains subject to stringent regulatory scrutiny.  Amid the intensified nationwide anti-corruption campaign targeting life sciences sector in recent years, there is an increased imperative for companies to proactively strengthen compliance management addressing commercial bribery risks associated with clinical research activities.

The Compliance Guidelines for Healthcare Companies to Prevent Commercial Bribery Risks, issued by the State Administration for Market Regulation in January 2025, explicitly delineate the commercial bribery risks that companies should identify and mitigate in clinical research.  Specifically, the guidelines prohibit offering improper benefits to clinical trial sites and investigators in exchange for competitive advantages, business opportunities, undue acceleration of clinical processes, or manipulation of clinical trial data.  In practice, regulatory authorities will scrutinize clinical research activities based on these standards to determine whether commercial bribery has occurred.  Sponsors should accordingly review their clinical trials for any arrangements that may be construed as commercial bribery, such as patient recruitment bonuses or data verification rewards provided to investigators, in order to relax enrollment criteria, grant preferential enrollment, or conceal issues discovered during the trial.

If a company is found to have violated anti-commercial bribery provisions under China's Criminal Law, Anti-Unfair Competition Law, or Drug Administration Law, both companies and their responsible personnel may face administrative penalties or criminal liabilities.  Notably, the latest revision of the Anti-Unfair Competition Law introduces personal liability for the first time under the framework of anti-unfair competition, for a company's legal representatives, principal executives, and responsible individuals directly involved.  These personnel may be subject to confiscation of illicit gains and fines up to RMB 1 million.  The Drug Administration Law has introduced personal "disqualification penalties" earlier, providing that if drug marketing authorization holders, manufacturers, or distributors are found to have bribed public officials during drug development, manufacturing, or marketing activities, the legal representatives, principal executives, directly responsible supervisors, and other relevant personnel could face a lifetime ban from engaging in drug manufacturing or distribution activities.

Accordingly, companies and their responsible personnel should conduct comprehensive reviews to ensure the authenticity, legality, and appropriateness of clinical research activities, with particular focus on financial expenditures, etc.  For instance, the China Good Clinical Practice (GCP) explicitly requires contracts between sponsors, investigators, and sites to clearly address potential and actual conflicts of interest, and to ensure that trial funding is reasonable and consistent with market norms.  Excessive payments in clinical research may trigger regulatory scrutiny, making it essential to evaluate risks carefully in the context of each specific project.

We recommend that companies and their responsible personnel take anti-corruption risks seriously by establishing and enforcing robust compliance programs, proactively addressing identified risks, and steadfastly upholding compliance standards in clinical research.

III.   Other key issues

Apart from the key considerations outlined above, clinical research is also subject to a range of other compliance requirements, including but not limited to HGR management, ethics review, data compliance and personal information protection, as well as subject injury compensation.  Given the scope of this article, we will not elaborate on these topics herein.  If you would like to explore any of these topics in more detail, please feel free to contact us.  (For our previous insights on the HGR regulation and ethical review, please refer to: Top 10 Traps to Avoid: Navigating China's HGR Applications; 汉坤 • 观点 | 伦理审查新规重点快评; China Released New Ethics Rules Requiring Company's Internal EC; 汉坤 • 观点 | 解读2024年版《赫尔辛基宣言》最新亮点 — 全球医学研究伦理准则系统性更新)

Practical strategies for managing clinical research risks

I.   Risk identification and assessment

Companies and their corporate groups are encouraged to undertake a systematic review of all clinical research projects, including past, ongoing, and planned ones, whether self-initiated or collaborative, to identify key risks that may compromise regulatory compliance or undermine commercialization processes.  Moreover, for enterprises considering financing, mergers and acquisitions, licensing arrangements, or IPOs, compliance issues related to clinical research often constitute key areas of due diligence and can be critical factors influencing valuation and the transaction outcomes.

In practice, key aspects requiring careful attention include the compliance status of ethics review, the reasonableness of financial terms, the roles and performance of clinical sites and investigators, the compliance background of collaborators, and the structure and terms of agreements.  Each of these areas requires careful and case-by-case risk analysis due to the complexity and project-specific characteristics.  We recommend that companies place special emphasis on clinical research compliance and conduct thorough risk reviews in collaboration with internal or external legal counsel.

II.   Remedies and responses

For projects and agreements with key risk areas or significant potential compliance issues, targeted compliance reviews and risk assessments are recommended.  Based on the specific circumstance, practical corrective measures should be implemented, including, but are not limited to, implementing dedicated CAPA (Corrective and Preventive Actions), supplementing compliance clauses, revising existing agreements, adding tailored provisions in transaction documents, or reassessing relevant business plans.  In cases that have drawn regulatory attention or involve serious compliance deficiencies, it is essential to develop regulatory response strategies to address feedback and mitigate potential impact.  Where necessary, companies should also consider whether terminating the relevant cooperation is warranted to protect overall corporate interests.

III.   Compliance development and regulatory monitoring

We recommend companies establish and continuously improve their clinical research compliance management systems with support from internal or external legal counsel by clearly defining responsibilities and standardizing procedures.  Regular training by internal or external legal experts is also essential to raise awareness and ensure effective implementation.  Meanwhile, companies should closely monitor the latest regulations, policies, and enforcement updates from drug regulatory authorities, and accordingly adjust strategies and update management systems.

We will also keep a close watch on regulatory trends and, drawing on practical experience, provide companies with timely and professional policy insights and support.

Conclusion

China's life sciences sector is entering a dynamic and vibrant new phase, with clinical research facing unprecedented opportunities and challenges.  As regulatory framework becomes more comprehensive and compliance guidelines become increasingly detailed, the quality management of clinical trials in China continues to advance, providing a solid foundation for the development of innovative medical products and supporting the sustainable growth of the industry.  We believe China's life sciences sector will grow increasingly robust and make stronger strides onto the global stage.

We will continue to stand alongside Chinese life sciences companies, helping them improve compliance management and strengthen their domestic presence, and expand globally.  At the same time, we remain committed to supporting foreign enterprises in navigating the Chinese market, identifying and managing compliance risks, fostering collaboration, and achieving mutually beneficial outcomes.