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Drug Administration Law of the People’s Republic of China
Posted: August-26-2019Adjust font size:

Order of the President of the People's Republic of China

No. 31

The Drug Administration Law of the People's Republic of China adopted at the 12th Meeting of the Standing Committee of the Thirteenth National People's Congress on August 26, 2019 is hereby promulgated and shall go into effect as of December 1, 2019.

Xi Jinping

President of the People's Republic of China

August 26, 2019


Drug Administration Law of the People’s Republic of China

(Adopted at the 7th Meeting of the Standing Committee of the Sixth National People’s Congress on September 20, 1984; revised for the first time at the 20th Meeting of the Standing Committee of the Ninth National People’s Congress on February 28, 2001; amended for the first time in accordance with the Decision on Revising Seven Laws Including the Marine Environmental Protection Law of the People’s Republic of China adoptedat the 6th Meeting of the Standing Committee of the Twelfth National People’s Congresson December 28, 2013; amended for the second time in accordance with the Decision on Revising the Drug Administration Law of the People’s Republic of China adopted at the 14th Meeting of the Standing Committee of the Twelfth National People’s Congresson April 24, 2015; revised for the second time at the 12th Meeting of the Standing Committee of the Thirteenth National People’s Congress on August 26, 2019)


Contents

Chapter I General Provisions

Chapter II Research and Development and Registration

Chapter III Marketing Authorization Holder

Chapter IV Manufacturing

Chapter V Distribution

Chapter VI Pharmacy Administration in Medical Institutions

Chapter VII Post-marketing Management

Chapter VIII Pricing and Advertising

Chapter IX Stockpile and Supply

Chapter X Regulation

Chapter XI Legal Liability

Chapter XII Supplementary Provisions


Chapter I

General Provisions

Article 1 This Law is enacted to strengthen drug administration, ensure drug quality, protect drug safety and legitimate rights and interests of the public, and protect and promote public health.

Article 2This Law shall apply to activities involving drug development, manufacturing, distribution, and use, and drug regulation in the territory of the People’s Republic of China.

Drugs in this Law refer to substances used in the prevention, treatment, and diagnosis of human diseases and intended for the physiological regulation of the body’s functions, for which indications or functions, dosage, and administration are stipulated, including traditional Chinese medicines, chemical drugs and biological products.

Article 3 Drug administration shall focus on public health, adhere to the principle of risk management, whole chain supervision, and social co-governance, establish a scientific and strict supervision and administration system, comprehensively improve drug quality, and ensure the safety, effectiveness and accessibility of drugs.

Article 4The State develops both modern and traditional medicines to give full play to their role in prevention and treatment of diseases and in the maintenance of health.

The State protects the resources of crude drugs and traditional Chinese medicines and encourages cultivation of traditional Chinese herbs.

Article 5The State encourages research and development of new drugs, and protects the legitimate rights and interests of citizens, legal bodies and other institutions in research and development of new drugs.

Article 6The State implements a marketing authorization holder (MAH) system for drug administration. Drug MAHs shall be legally responsible for drug safety, efficacy, and quality management throughout the process of drug research and development, manufacturing, distribution, and use.

Article 7 The conduct of drug research and development, manufacturing, distribution and use shall comply with applicable laws, regulations, standards and norms, to ensure the authenticity, accuracy, integrity and traceability of information throughout the process.

Article 8The drug regulatory department under the State Council shall be responsible for drug administration nationwide. The relevant departments under the State Council shall be responsible for the related administrative work within the scope of their duties. The drug regulatory department under the State Council shall cooperate with relevant departments under the State Council in implementing national drug development programs and policies.

The drug regulatory departments of the people’s governments of provinces, autonomous regions, or municipalities directly under the central government shall be responsible for drug administration in their administrative areas. The departments in charge of drug administration (hereinafter referred to as the drug regulatory departments) of the people’s governments of municipalities divided into districts or of counties shall be responsible for drug administration in their administrative areas. The relevant departments of the people’s governments at or above the county level shall be responsible for the related administrative work within the scope of their duties.

Article 9 The local people’s governments at or above the county level shall be responsible for the work of drug administration in their administrative areas. They shall lead, organize, and coordinate the work of drug administration within their respective administrative areas as well as the response to drug safety emergencies. They shall establish and improve the drug administration work mechanism and an information-sharing system.

Article 10The people’s governments at or above the county level shall incorporate the work of drug safety into the economic and social development plans of the people at their levels, and include funds for drug safety in their government budgets, strengthen the capacity-building of drug administration, and provide safeguards for drug safety work.

Article 11The drug professional and technical institutions established or designated by drug regulatory departments shall perform review, testing, inspection, monitoring and assessment as required by the conduct of drug administration in accordance with the law.

Article 12 The State establishes and improves the drug traceability system. The drug regulatory department under the State Council shall formulate unified drug traceability standards and norms and facilitate communication and sharing of drug traceability information to achieve drug traceability.

The State establishes the pharmacovigilance system to monitor, detect, assess and control adverse reactions or other harmful reactions related to use of drugs.

Article 13 The people’s governments and their relevant departments at all levels and drug industry associations shall strengthen the publicity and education of drug safety, and work for the popularization of knowledge on laws and regulations of drug safety.

The news media shall publicize knowledge on relevant laws and regulations of drug safety and carry out public opinion supervision over unlawful acts relating to drugs. The coverage and reporting of drugs shall be comprehensive, appropriate, objective, and fair.

Article 14Drug industry associations shall strengthen industry self-discipline, establish and improve industrial standards, strengthen the industrial integrity system, and guide and urge member enterprises to manufacture and distribute drugs in accordance with applicable laws.

Article 15Entities and individuals that have made significant contributions to drug development, manufacturing, distribution, use and supervision and administration shall be commended and rewarded by the people’s government and its relevant departments at or above the county level in accordance with the relevant provisions of the State.


Chapter II

Research and Development and Registration

Article 16The State supports innovation in drug development which is guided by clinical value and has clear or specific therapeutic effect on human diseases, encourages research and development of new drugs with new therapeutic mechanisms, treats serious life-threatening or rare diseases, makes use of targeted and systemic regulatory interventions for humans, and promotes technological advancement in drug development.

The State encourages the use of modern science and technology and conventional methods in the research and development of traditional Chinese medicines, establishes and improves a technical evaluation system that is applicable to the characteristics of traditional Chinese medicines, and promotes inheritance and innovation of traditional Chinese medicines.

The State takes effective measures to encourage research and development and innovation of pediatric drugs, support the development of new varieties, dosage forms, and strengths of pediatric drugs according to pediatric physiological requirements, and prioritizes review and approval of pediatric drugs.

Article 17 Drug research and development activities shall comply with the Good Laboratory Practice for Non-Clinical Studies (GLP) and the Good Clinical Practice (GCP), and the entire drug research and development process shall continuously comply with statutory requirements.

The drug regulatory department under the State Council jointly with relevant departments under the State Council shall formulate the GLP and GCP.

Article 18 The conduct of non-clinical studies for drugs shall meet the relevant provisions of the State, be equipped with proper personnel, field and laboratory equipment, instruments, and management systems relevant to the study, and ensure the authenticity of the data, documents, and samples.

Article 19 To conduct drug clinical trials, relevant data, documents, and samples, such as manufacturing process, quality specifications, and results of pharmacological and toxicological studies, shall be truthfully submitted in accordance with regulations of the drug regulatory department under the State Council and subject to its approval. The drug regulatory department under the State Council shall, within sixty working days from the date of acceptance of a clinical trial application, decide on whether to approve the application and notify the clinical trial sponsor. Where the sponsor is not notified within the stipulated period, the application shall be considered approved. Bioequivalence study applications shall be filed for record with the drug regulatory department under the State Council.

Clinical trials of drugs shall be conducted in clinical trial institutions that meet the relevant conditions. Drug clinical trial institutions are subject to record-keeping management, the specific measures for which shall be jointly formulated by the drug regulatory authorities under the State Council and the health authorities under the State Council.

Article 20The conduct of drug clinical trials shall comply with ethical principles, with a clinical trial protocol developed, and be subject to review and approval by the ethics committee.

The ethics committee shall establish an ethics review system to ensure that the ethics review process is independent, objective, and fair, supervise the standard conduct of drug clinical trials, protect the legitimate rights and interests of trial subjects, and safeguard the public interest.

Article 21When conducting a drug clinical trial, details such as the clinical trial objective and risks shall be truthfully stated and explained to the trial subjects or their guardians, an informed consent letter signed voluntarily by the trial subject or their guardian shall be obtained, and effective measures shall be taken to protect the lawful rights and interests of the trial subjects.

Article 22 Where safety issues or other risks are discovered during a drug clinical trial, the clinical trial sponsor shall promptly adjust the clinical trial protocol, suspend or terminate the clinical trial, and report to the drug regulatory department under the State Council. If necessary, the drug regulatory department under the State Council may order the sponsor to adjust the clinical trial protocol or suspend or end the clinical trial.

Article 23For drugs that are undergoing clinical trials which are to be used for the treatment of severe life-threatening diseases for which there is no effective treatment, where it is concluded from medical observation that such drugs are beneficial and comply with ethical principles, the drugs may, after review and obtaining informed consent, be used on other patients with the same condition within the clinical trial institutions that are conducting the trial.

Article 24Drugs to be marketed in the territory of the People’s Republic of China shall be subject to approval by the drug regulatory department under the State Council to obtain the drug approval license, except for Chinese medicinal materials and prepared slices of Chinese crude drugs which are not subject to review and approval administration. The list of Chinese medicinal materials and prepared slices of Chinese crude drugs subject to review and approval shall be formulated by the drug regulatory department under the State Council jointly with the administrative department for traditional Chinese medicine under the State Council.

To apply for drug registration, data, documents, and samples that are true, adequate, and credible shall be provided to prove the safety, efficacy, and quality management of the drug.

Article 25The drug regulatory department under the State Council shall organize experts in pharmaceutical, medical and other fields to review drug registration applications with regard to drug safety, efficacy and quality management as well as investigate the quality management, risk control and compensation for liability of the sponsor. Where the application meets the criteria, a drug approval license shall be issued.

During the review and approval of a drug application, the drug regulatory department under the State Council shall combine the review and approval of relevant chemical drug substances, the review of relevant excipients and immediate packaging materials and containers and the verification of its specification, manufacturing process, labeling and package insert.

Excipients in this Law refer to the vehicles and additives used for drug manufacturing and prescription dispensing.

Article 26Drugs used for the treatment of severe life-threatening diseases for which there is no effective treatment and drugs urgently needed for public health, where the drug clinical trial data have shown their efficacy and predictable clinical results, may be conditionally approved, and the relevant information should be stated in the drug approval license.

Article 27 The drug regulatory department under the State Council shall optimize the drug review and approval work system, strengthen capacity building, establish and improve upon communication, provide an expert advisory mechanism, optimize the review and approval process, and enhance efficiency of review and approval.

The review conclusion and rationale for the approval of drug marketing shall be made public in accordance with the law. Commercial secrets accessed in the review and approval process shall be kept confidential.

Article 28 Drugs shall meet the national drug standards. Where a drug standard approved by the drug regulatory department exceeds the national drug standards, the approved standards shall be implemented. Where a national drug standard is not in place, relevant drugs shall follow the approved standards.

The Pharmacopoeia of the People’s Republic of China and drug standards issued by the drug regulatory department under the State Council shall serve as the national drug standards.

The drug regulatory department under the State Council, in conjunction with the health department under the State Council, shall organize a Pharmacopoeia Commission, which is responsible for the formulation and revision of national drug standards.

The drug control institution set up or appointed by the drug regulatory department under the State Council shall be responsible for establishing the national standards for drug substances and reference materials.

Article 29A drug name listed in the national drug standards is an adopted name in China and may not be used as a trademark.


Chapter III

Marketing Authorization Holder

Article 30A Marketing Authorization Holder (MAH) refers to an enterprise or R&D institution which holds a drug approval license.

MAHs shall, in accordance with provisions of this Law, be responsible for non-clinical studies, clinical trials, manufacture and distribution, post-marketing studies, and monitoring, reporting, and handling of adverse drug reactions. Other institutions and individuals engaged in activities, such as drug research and development, manufacture, distribution, storage, transportation, and use, shall assume corresponding responsibilities in accordance with the laws.

The legal representative and the principal responsible person of an MAH shall take full responsibility for drug quality.

Article 31MAHs shall establish a drug quality assurance system and appoint dedicated personnel to take charge of drug quality management independently.

MAHs shall conduct audits on the quality management systems of the drug contract manufacturers and drug distributors on a regular basis to supervise and ensure their continuous capability of quality assurance and control.

Article 32MAHs may either manufacture drug products by themselves or entrust a drug manufacturer with production.

MAHs that manufacture their own drug products shall obtain a Drug Manufacturing Certificate in accordance with provisions of this Law. Where a drug is contracted out, the MAH shall entrust a qualified drug manufacturer. The MAH and the contract manufacture shall sign agreements on entrustment quality and shall comply with their obligations under the agreements.

The drug regulatory department under the State Council shall develop guidelines for the quality agreement of contracting out the manufacturing to provide guidance and supervision for MAHs and contract manufacturers to fulfill their obligations of drug quality assurance.

The contract manufacturing of blood products, narcotic drugs, psychotropic substances, toxic drugs for medical use, and pharmaceutical precursor chemicals is prohibited, unless otherwise stipulated by the drug regulatory department under the State Council.

Article 33 MAHs shall establish a marketing release procedure to audit drug products released by drug manufacturers. Drug products shall not be released until signed off by a qualified person and those that do not conform to national drug standards shall not be released.

Article 34 MAHs may either distribute drug products that have obtained drug approval licenses or entrust a drug distributor for distribution. MAHs engaged in drug retail activities shall obtain a Drug Distribution Certificate.

MAHs that distribute drugs shall meet the requirements stipulated in Article 52 of this Law. For distributors entrusted with distribution, a qualified distributor shall be used. The MAH and the entrusted distributor shall sign an entrustment agreement and shall comply with their obligations under the agreement.

Article 35Where MAHs, drug manufacturers or drug distributors entrust a third party to store or transport drugs, they shall assess the entrusted party’s quality assurance and risk management capacity, sign an entrustment agreement with the entrusted party to specify such things as drug quality responsibilities and operation procedures, and supervise the entrusted party.

Article 36 MAHs, drug manufacturers, drug distributors, and medical institutions shall establish and implement drug traceability systems and provide that information in accordance with regulations to ensure the traceability of drug products.

Article 37MAHs shall establish an annual reporting system to report information including drug manufacturing and distribution, post-marketing studies, and risk management to the drug regulatory departments of the people’s governments of provinces, autonomous regions and municipalities directly under the central government in accordance with regulations.

Article 38Where the MAH is an overseas enterprise, an enterprise legal person within the territory of the People’s Republic of China shall be designated to fulfill the obligations of the MAH and assume joint liability with the MAH.

Article 39 Manufacturers of decoction pieces of Chinese medicine shall fulfill relevant obligations of an MAH, and shall implement whole chain management for the manufacture and distribution of decoction pieces of Chinese medicine and establish a traceability system for decoction pieces of Chinese medicine to ensure the safety, efficacy, and traceability thereof.

Article 40An MAH may, upon approval by the drug regulatory department under the State Council, transfer its drug marketing authorization. The transferee shall be capable of quality management, risk control, and compensation for liability to ensure drug safety, efficacy and quality management, and shall fulfill the obligations of the MAH.


Chapter IV

Manufacturing

Article 41The undertaking of drug manufacturing shall be subject to approval by the local drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the central government, and shall obtain a Drug Manufacturing Certificate. No one may manufacture drugs without the certificate.

The valid term and the scope of manufacturing shall be indicated in the Drug Manufacturing Certificate. For renewal of the certificate on expiration, reexamination is required.

Article 42 The undertaking of drug manufacturing shall meet the following requirements:

(1) have legally qualified pharmaceutical and engineering professionals as well as the necessary technical workers;

(2) have the premises, facilities, and hygienic environment required for drug manufacturing;

(3) have the institutions and personnel capable of meeting the quality control and testing requirements for drugs to be produced and the necessary instruments and equipment; and

(4) have rules and regulations in place to ensure the quality of drugs and comply with the requirements of the Good Manufacturing Practice for Pharmaceutical Products (GMP) formulated by the drug regulatory department under the State Council in accordance with this Law.

Article 43 The undertaking of drug manufacturing shall comply with the GMP.A quality management system shall be established and improved for drug manufacturing, to ensure that the whole chain of drug manufacturing continuously complies with statutory requirements.

The legal representative and the principal responsible person of a drug manufacturer shall be fully responsible for the drug manufacturing activities.

Article 44A drug shall be made in accordance with the national drug standards and with production processes approved by the drug regulatory department under the State Council. The production and testing records shall be complete and correct and shall not be fabricated.

Decoction pieces of Chinese medicine shall be processed in accordance with the national drug standards. Those not contained in the standards shall be produced in accordance with the processing procedures formulated by the drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the central government. The said procedures shall be submitted to the drug regulatory department under the State Council for the record. Decoction pieces of Chinese medicine that do not meet the national drug standards or are not produced in accordance with the processing procedures formulated by the drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the central government shall not be released or distributed.

Article 45 The starting materials for the manufacturing of pharmaceutical products shall comply with the medicinal requirements and the relevant GMP.

For drug manufacturing, the manufacturers shall audit the suppliers of drug substances and excipients, as required to ensure that purchases and use of the drug substances and excipients comply with the requirements stipulated in the preceding paragraph.

Article 46 Immediate packaging materials and containers shall meet the requirements for medicinal use and the standards for ensuring human health and safety.

Where the immediate packaging materials and containers are not up to standard, the drug regulatory department shall order a stop to the use of the materials and containers.

Article 47Drug manufacturers shall perform drug quality tests. Drugs that do not meet the national drug standards shall not be released.

Drug manufacturers shall establish drug release procedures and specify the release standards and criteria. Drug products that meet the standards and criteria shall be released upon signature by the qualified person.

Article 48Drug packaging shall conform to drug quality requirements and be convenient for storage, transportation, and medical use.

Chinese medicinal materials shall be packed for transportation. Each package shall indicate the name of the drug, the origin of production, and the date and the name of the consignor, and include a quality certification mark.

Article 49The drug package shall include a label together with a package insert as required by regulations.

The label or package insert shall indicate the adopted name of the drug in China, its ingredients and strength, the name and address of the MAH, the name and address of the manufacturer, approval number, product batch number, production date, date of expiration, indications or functions, dosage and administration, contraindications, adverse drug reactions, and precautions. The wording of the label and package insert shall be clear, and the production date and date of expiration shall be prominent and discernible.

Specified marks shall be printed on the label and package insert of narcotic drugs, psychotropic substances, toxic drugs for medical use, radioactive pharmaceuticals, drugs for topical use, and non-prescription drugs.

Article 50 Staff members of MAHs, drug manufacturers, drug distributors, and medical institutions who are in direct contact with drugs shall undergo annual health checkups. No one who suffers from infectious diseases or any other diseases which may contaminate drugs may engage in any work involving direct contact with drugs.


Chapter V

Distribution

Article 51 The undertaking of drug wholesale is subject to approval of the local drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the central government and requires a Drug Distribution Certificate. The undertaking of drug retail is subject to approval of the drug regulatory department of the local people's government at or above the county level and requires the said certificate. No one may distribute drugs without the certificate.

The valid term and the scope of business shall be indicated in the Drug Distribution Certificate. For renewal of the certificate upon expiration, reexamination is required.

When granting the Drug Distribution Certificate, the drug regulatory department shall see to it that, apart from the requirements specified by the provisions in Article 52 of this Law, that drug purchases are made convenient.

Article 52The undertaking of drug distribution activities shall meet the following requirements:

(1) have legally qualified pharmacists or other pharmaceutical professionals;

(2) have the premises, equipment, warehouses, and hygienic environment required for drug distribution;

(3) have the units or personnel necessary for quality control of the drugs to be distributed; and

(4) have rules and regulations in place to ensure drug quality and comply with the requirements of the Good Supply Practice for Pharmaceutical Products (GSP) formulated by the drug regulatory department under the State Council in accordance with this Law.

Article 53 The undertaking of drug distribution activities shall comply with the GSP.A quality management system for drug distribution shall be established and improved, to ensure that the whole chain of drug distribution continuously complies with statutory requirements.

The State encourages and guides the operation of retail drug chains. The headquarters of a retail drug chain shall establish a unified quality management system and perform management responsibilities for the business activities of the chain retailers.

The legal representative and the principal responsible person of a drug distributor shall be fully responsible for the drug distribution activities.

Article 54The State adopts a classification system for prescription and non-prescription drugs. The specific measures shall be formulated by the drug regulatory department under the State Council together with the competent health department under the State Council.

Article 55MAHs, drug manufacturers, drug distributors and medical institutions shall purchase drugs from an MAH or an enterprise qualified to engage in drug manufacture or distribution, except for procurement of Chinese medicinal materials which are not subject to approval administration.

Article 56For the purchase of drugs, drug distributors shall establish and apply an examination and acceptance system and check the certificate of drug quality, labels, and other marks. Drugs that do not meet the requirements shall not be bought or sold.

Article 57Drug distributors shall keep authentic and complete records when buying and selling drugs. Each record shall indicate the adopted name in China, dosage form, strength, product batch number, date of expiration, MAH, manufacturer, purchase or sale unit, amount purchased or sold (purchase or sale quantity), purchase or sale price, date of purchase or sale, and other items specified by the drug regulatory department under the State Council.

Article 58 Drug distributors shall retail drugs properly and include an accurate description of dosage and administration and precautions. Prescriptions for dispensing shall be checked, and no drugs listed in the prescription may be changed or substituted without authorization. Requests to dispense incompatible or over-dosage prescriptions and prescriptions may be dispensed only after the prescribing physician makes corrections or re-signs the order.

Drug distributors shall indicate the origin of the Chinese medicinal materials to be sold.

Legally qualified pharmacists or other pharmaceutical professionals shall be responsible for the drug management, prescription examination and dispensing, and guidance of rational use of drugs.

Article 59A drug distributor shall establish and apply a system for drug storage, and take necessary measures to ensure quality, such as cold storage, protection against freezing and humidity, and avoidance of insects and rodents.

An examination system shall be applied for storing and releasing drugs from storage.

Article 60 Chinese medicinal materials may be sold at town and country fairs, except those otherwise specified by the State Council.

Chinese medicinal materials may be sold at urban and rural trade markets, unless otherwise stipulated by the State Council.

Article 61 MAHs and drug distributors engaged in online drug sales shall comply with the relevant provisions of this Law on drug distribution. Specific administrative measures shall be formulated by the drug regulatory department under the State Council jointly with the competent health department under the State Council.

Drugs subject to special administration by the State, such as vaccines, blood products, narcotic drugs, psychotropic substances, toxic drugs for medical use, radioactive drugs, and pharmaceutical precursor chemicals, shall not be sold online.

Article 62Third party platform providers for online drug sales shall file a record with the local drug regulatory department of the people’s government of the province, autonomous region or municipality directly under the central government in accordance with the regulations of the drug regulatory department under the State Council.

Third party platform providers shall, in accordance with the law, examine the qualifications of MAHs and drug distributors requesting to operate on their platform to ensure that they comply with statutory requirements, and manage drug distribution activities carried out on their platform.

Where a third party platform provider discovers that an MAH or a drug distributor operating on its platform has violated provisions of this Law, it shall promptly stop the offense and immediately report the incident to the drug regulatory department of the local people's government at the county level. Where a serious illegal act is discovered, the third party platform provider shall immediately cease to provide services to the MAH or drug distributor.

Article 63Newly discovered crude drugs or cultivated crude drugs introduced from abroad may be marketed only after approval by the drug regulatory department under the State Council.

Article 64Drugs shall be imported via the ports where drug importation is permitted, and drug importers shall file a record with the local drug regulatory department at the port. The drugs shall be released by customs on the basis of the Drug Import Note issued by the said departments and shall not release drugs for which no Drug Import Note has been issued.

The drug regulatory department in the place where the port is located shall notify the drug control institutions to sample and test the drugs to be imported in accordance with the regulations of the drug regulatory department under the State Council.

The ports where drugs can be imported shall be proposed by the drug regulatory department under the State Council together with the General Administration of Customs and the proposal shall be submitted to the State Council for approval.

Article 65Where a medical institution has urgent clinical needs for a small quantity of drugs to be imported, such drugs may be imported upon approval by the drug regulatory department under the State Council or by the people’s government of the province, autonomous region or municipality directly under the central government authorized by the State Council. Imported drugs shall be used for specific medical purposes within designated medical institutions.

A small quantity of drugs brought into China by individuals for personal use shall be handled in accordance with the relevant regulations of the State.

Article 66 Anyone who wishes to import or export narcotic drugs or psychotropic substances that fall within the scope specified by the State shall produce the Import License or Export License issued by the drug regulatory department under the State Council.

Article 67The importation of drugs with uncertain therapeutic value, serious adverse reaction, or other factors harmful to human health is prohibited.

Article 68The drug regulatory department under the State Council shall designate drug control institutions to test the following drugs before they are marketed or at the time they are imported. Drugs that are untested or fail testing shall not be marketed or imported;

(1) drugs to be marketed in China for the first time;

(2) biological products specified by the drug regulatory department under the State Council; and

(3) other drugs specified by the State Council.


Chapter VI

Pharmacy Administration in Medical Institutions

Article 69Medical institutions shall be staffed with legally qualified pharmacists or other pharmaceutical professionals who are lawfully qualified to take charge of the medical institution’s drug management, check and dispense prescriptions, and offer reasonable medication guidance. No one who is not a pharmaceutical professional may work in pharmacies.

Article 70For the purchase of drugs, medical institutions shall establish and apply an examination and acceptance system and check the certificate of drug quality, labels, and other marks. Drugs that do not meet the specified requirements shall not be bought or used.

Article 71 Medical institutions shall possess premises, equipment, warehousing facilities, and hygienic environment, establish and apply a system for drug storage, and take necessary measures to ensure drug quality, such as cold storage, protection against freezing and humidity, and avoidance of insects and rodents.

Article 72 Medical institutions shall adhere to the principle of safe, effective, economical and reasonable medication, comply with drug clinical application guidelines, clinical diagnosis and treatment guides and drug package insert. for rational use of drugs, and review the suitability of physician prescriptions and medication orders.

Non-medical institutions using drugs shall comply with the relevant provisions on use of drugs by medical institutions in this Law.

Article 73Prescriptions dispensed by pharmacists or other drug professionals who are qualified in accordance with the law shall be checked, and no drugs listed in the prescriptions may be changed or substituted without authorization. The pharmacists shall refuse to dispense incompatible or over-dosage prescriptions and prescriptions may be dispensed only after the prescribing physician makes corrections or re-signs the order.

Article 74 To dispense pharmaceutical preparations, a medical institution shall be approved by the drug regulatory department of the people’s government of the province, autonomous region or municipality directly under the central government and have a Pharmaceutical Preparation Certificate for Medical Institution. No one may dispense pharmaceutical preparations without the certificate.

The valid term shall be indication in the certificate. For renewal of the certificate upon expiration, reexamination is required.

Article 75Medical institutions engaged in preparing drug preparations shall have facilities, management system, inspection equipment and hygienic environment for ensuring drug quality.

When preparing drug preparations, medical institutions shall perform their duties in accordance with the approved process, and the required active drug ingredients, excipients, and packaging materials shall comply with medicinal requirements.

Article 76The pharmaceutical preparations to be dispensed by the medical institutions shall be those that meet the clinical needs of the institution but are not available on the market and shall be subject to approval in advance by the local drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the central government, with the exception of the preparations of traditional Chinese medicines otherwise specified by the laws.

The quality of the dispensed pharmaceutical preparations shall be tested in accordance with regulations. Those that pass the testing may be used within the institution based on physician’s prescription. In special cases, the pharmaceutical preparations dispensed by a medical institution may be used by other designated medical institutions, upon approval by the drug regulatory department under the State Council or by the drug regulatory department of the people’s government of a province, autonomous region or municipality directly under the central government.

No pharmaceutical preparations dispensed by medical institutions may be marketed.


Chapter VII

Post-marketing Management

Article 77MAHs shall formulate a drug post-marketing risk management plan and take the initiative to conduct drug post-marketing studies to further confirm the safety, efficacy, and quality management of drugs, and strengthen continuous management of marketed drugs.

Article 78For drugs given conditional approval, MAHs shall adopt corresponding risk management measures and complete relevant studies within the stipulated period in accordance with regulations. Where MAHs are unable to complete the study within the stipulated period as required or are unable to prove that the benefits outweigh the risks, the drug regulatory department under the State Council shall handle the matter in accordance with the law, until the drug approval license is revoked.

Article 79Changes in the drug manufacturing process shall be managed by classifications based on the risks and impact of changes on drug safety, efficacy and quality management. Major changes shall be subject to approval by the drug regulatory department under the State Council, and other changes shall be filed for record or reported in accordance with regulations of the drug regulatory department under the State Council.

MAHs shall, in accordance with regulations of the drug regulatory department under the State Council, comprehensively evaluate and confirm the impact of changes on drug safety, efficacy, and quality management.

Article 80 MAHs shall monitor for adverse reactions of marketed drugs, take the initiative to collect, track and analyze information on suspected adverse drug reactions, and promptly take risk control measures for drugs for which risks are identified.

Article 81MAHs, drug manufacturers, drug distributors, and medical institutions shall regularly audit the quality, efficacy, and adverse reactions of the drugs that they manufacture, distribute, and use. Cases of suspected adverse drug reactions shall be reported promptly to the drug regulatory departments and the competent health departments. Detailed measures shall be formulated by the drug regulatory department under the State Council jointly with the competent health department under the State Council.

For drugs for which serious adverse reactions are confirmed, the drug regulatory department under the State Council or the drug regulatory departments of the people’s governments of the provinces, autonomous regions or municipalities directly under the central government shall adopt emergency control measures based on actual conditions to stop manufacture, distribution, and use of the drugs, and shall organize an evaluation within five days and issue an administrative decision within fifteen days from the date of the evaluation conclusion in accordance with the law.

Article 82Where a drug has quality issues or other potential safety concerns, the MAH shall immediately stop selling the drug, notify relevant drug distributors and medical institutions to stop sales and use, recall the sold drugs, promptly announce recall information, stop manufacturing immediately if necessary, and report the situation on drug recall and handling to the drug regulatory departments and the competent health departments of the people’s governments of the provinces, autonomous regions, or municipalities directly under the central government. The drug manufacturers, drug distributors, and medical institutions shall cooperate.

Where the MAH does not recall the drugs in accordance with the law, drug regulatory departments of the people’s government of the provinces, autonomous regions, or municipalities directly under the central government shall order the MAH to recall the drugs.

Article 83MAHs shall conduct periodic post-marketing evaluations on the safety, efficacy, and quality management of marketed drugs. If necessary, the drug regulatory department under the State Council may demand an MAH to conduct post-marketing evaluation or directly organize post-marketing evaluation.

Upon evaluation, the drug approval license of drugs with unclear efficacy, serious adverse reactions, or are otherwise harmful to human health shall be revoked.

Drugs of which the drug approval license is revoked shall not be manufactured or imported, sold or used.

Drugs of which the drug approval licenses are revoked or drugs which are expired. shall be destroyed or decontaminated in accordance with the law under the supervision of the drug regulatory departments.


Chapter VIII

Pricing and Advertising

Article 84The State improves upon the drug procurement and administration system, monitors drug pricing, conducts investigations into costs and pricing, strengthens supervision and inspection of drug pricing, investigates and deals with acts of illegal drug pricing, such as monopoly pricing and aggressive campaigns, and safeguards drug prices.

Article 85For drugs, the prices of which fluctuate based on market factors in accordance with the law, MAHs, drug manufacturers, drug distributors, and medical institutions shall fix the prices on the principles of fairness, rationality, good faith, and commensuration of price with quality to provide users with reasonably priced drugs.

When fixing and indicating retailing prices, MAHs, drug manufacturers, drug distributors and medical institutions shall abide by the regulations on control over drug prices formulated by the competent pricing department under the State Council. Exorbitant profits, monopoly pricing, and fraud are prohibited.

Article 86MAHs, drug manufacturers, drug distributors, and medical institutions shall provide the actual buying and selling prices as well as quantity of the drugs purchased and sold, and other related data to the competent pricing department.

Article 87Medical institutions shall provide patients with a list of drug prices, truthfully publicize the prices of common drugs in compliance with the specified measures, and promote reasonable use of drugs. Specific measures shall be formulated by the competent health department under the State Council.

Article 88MAHs, drug manufacturers, drug distributors and medical institutions are prohibited from offering or accepting rake-offs or other benefits while purchasing and selling drugs.

MAHs, drug manufacturers, drug distributors or their agents are prohibited from offering, under any pretenses, money or things of value or other benefits to leading members, drug purchasers, physicians, pharmacists, or other related persons of the medical institutions where their drugs are used. Leading members, drug purchasers, physicians, pharmacists, or other related persons, on their part, are prohibited from accepting, under any pretenses, money or things of value or other benefits offered by MAHs, drug manufacturers, drug distributors, or their agents.

Article 89 Drug advertisements shall be subject to approval by the advertisement examination authorities determined by the people’s government of the province, autonomous region, or municipality directly under the Central Government at the locality of the advertiser. No one may launch drug advertisements without approval.

Article 90 The content of drug advertisements shall be truthful and lawful. The package inserts approved by the drug regulatory department under the State Council shall be taken as the basis, and no false content may be contained in them.

No unscientific, categorical assertion, or guarantee of described function or safety may be included in drug advertisements. No names or images of government departments, research institutions, and academic institutions, or of experts, scholars, physicians, pharmacists and patients may be used as evidence for drug advertising.

Non-drug advertisements may not involve drug promotion.

Article 91 Where drug pricing and advertising are not covered by the provisions of this Law, the provisions of the Pricing Law of the People’s Republic of China, the Anti-monopoly Law of the People’s Republic of China, the Law of the People’s Republic of China Against Unfair Competition, and the Advertising Law of the People’s Republic of China shall govern.


Chapter IX

Stockpile and Supply

Article 92The State implements a drug stockpile system by the establishment of national and local drug stockpile.

In the event of serious disasters, epidemic outbreaks or other emergencies, urgent drug deployment may be carried out in accordance with the provisions of the Emergency Response Law of the People’s Republic of China.

Article 93 The State implements an essential drugs system to select essential drugs of appropriate quantities, better organize manufacturing and stockpile, improve the supply capacity for essential drugs, and satisfy the need for essential medications for disease prevention and treatment.

Article 94The State establishes a drug supply monitoring system to promptly gather, compile, and analyze the supply information of drugs in shortage, implement advance drug shortage warnings, and take countermeasures.

Article 95The State implements an administration to supply a list of drugs in shortage. Detailed provisions shall be formulated by the competent health department under the State Council jointly with the drug regulatory department under the State Council.

Where an MAH stops manufacture of drugs in shortage, it shall report to thedrugregulatorydepartmentundertheStateCouncilorthedrugregulatorydepartment of the people’s government of the province, autonomous region, or municipality directly under the Central Government.

Article 96The State encourages the research, development, and manufacture of drugs in shortage, and implements priority review and approval for drugs in shortage in urgent clinical needs or new drugs for prevention and treatment of serious infectious diseases and rare diseases.

Article 97The State Council may restrict or prohibit exportation of drugs in shortage. Where necessary, the relevant State Council departments may adopt measures such as organizing the manufacturing, implementing price intervention, or expanding importation to secure drug supply.


Chapter X

Regulation

MAHs, drug manufacturers, and drug distributors shall ensure drug manufacture and supply in accordance with regulations.

Article 98The manufacture (including preparation, same hereinafter), sale, or use of counterfeit or inferior drugs is prohibited.

A drug shall be deemed a counterfeit drug in any of the following circumstances:

(1) the ingredients in the drug are not compliant with the ingredients stipulated in the national drug standards;

(2) a non-drug substance is substituted for a drug or one drug is substituted for another;

(3) a deteriorated drug; or

(4) the indications or functions indicated are beyond the specified scope.

A drug shall be deemed as an inferior drug in any of the following circumstances:

(1) the ingredients of the drug are not compliant with the national drug standards;

(2) a contaminated drug;

(3) the validity period is not indicated or is altered;

(4) the product batch number is not indicated or is altered;

(5) it is beyond the date of expiration;

(6) preservatives or excipients are added without authorization; or

(7) any other cases that do not conform to the national drug standards.

The manufacture or importation of drugs without a drug approval license is prohibited. The use of active drug ingredients, packaging materials, or containers for drug manufacturing, which have not been reviewed and approved in accordance with the provisions, is prohibited.

Article 99Drug regulatory departments shall, in accordance with the laws and regulations, supervise and inspect drug research and development, manufacturing, distribution, and use of drugs by institutions, and other activities, and where necessary, conduct extended inspection on institutions and individuals providing products or services for drug research and development, manufacture, distribution, and use. Relevant organizations and individuals shall cooperate and shall not refuse inspection or conceal information.

Drug regulatory departments shall implement intensive supervision and inspection for high-risk drugs.

Where there is evidence to prove that there are safety hazards, drug regulatory departments shall, based on supervision and inspection findings, adopt measures such as issuing a warning, scheduling an interview, ordering a correction within a stipulated period, or suspending manufacture, distribution, use, and importation, and shall promptly announce inspection and the outcome.

When conducting supervision and inspection, the drug regulatory departments shall present their credentials and keep commercial secrets which have come to their knowledge during supervision and inspection confidential.

Article 100Drug regulatory departments may sample and test drug quality based on the needs of supervision and inspection. With regard to selective sampling and testing, samples shall be taken in accordance with the relevant regulations, and no fees shall be charged. Any sample taken for testing shall be purchased. Necessary expenses shall be listed and covered in accordance with the regulations of the State Council.

For drugs and related materials that are known to be potentially harmful to human health, the drug regulatory department may seal or seize them and shall, within seven days, make an administrative decision. Where it is necessary to make an assessment, it shall, within fifteen days from the date the testing report is issued, make an administrative decision.

Article 101The drug regulatory department under the State Council and the drug regulatory departments of people’s governments of provinces, autonomous regions and municipality directly under the central government shall announce the results of selective sampling and testing of drug quality. Where the announcement is improper, a correction shall be made within the scope of the original announcement.

Article 102Where the party objects to the results of testing, it may, within seven days from the date it receives the results, apply for re-testing to the original drug control institution, or to an institution established or designated by the drug regulatory department at the next higher level, and it may also directly apply to the drug control institution established or designated by the drug regulatory department under the State Council. The drug control institution that accepts the application shall, within the time limit specified by the drug regulatory department under the State Council, draw a review conclusion from the re-test.

Article 103Drug regulatory departments shall inspect compliance with GMP, GSP, GLP, and GCP by MAHs, drug manufacturers, drug distributors, drug non-clinical safety evaluation research institutions, and drug clinical trial organizations, and supervise them to make sure that they continuously comply with statutory requirements.

Article 104 The State establishes a professional and specialized team of drug inspectors who are familiar with drug laws and regulations and have professional knowledge of drugs.

Article 105Drug regulatory departments establish drug safety credit record for MAHs, drug manufacturers, drug distributors, drug non-clinical safety evaluation research institutions, drug clinical trial organizations, and medical institutions to record issuance of permits, regular supervision and inspection findings, and investigations and handling of illegal acts, and shall make the records available to the public in accordance with the law and promptly update them. They may increase the frequency of supervision and inspection for entities with poor credit records and may implement joint punishment in accordance with the provisions of the State.

Article 106Drug regulatory departments shall list their email addresses and phone numbers to accept enquiries, complaints, and reports, and shall promptly reply, verify, and handle enquiries, complaints, and reports in accordance with the law. For verified reports, the whistleblower shall be rewarded in accordance with the relevant provisions.

Drug regulatory departments shall keep the identity information of whistleblowers confidential and protect their legitimate rights and interests. Where a whistleblower lodges a report against their employer, the employer shall not retaliate against the whistleblower by way of rescission, amendment of their labor contract, or otherwise.

Article 107 The State implements a unified announcement system for drug safety information. General information on national drug safety, drug safety warnings, and serious drug safety incidents, as well as information on investigations and handling thereof and other information required by the State Council to be announced on a unified basis, shall be announced by the drug regulatory department of the State Council on a unified basis. Drug safety warnings, serious drug safety incidents, and information on investigations and handling thereof which have an impact on a specific region may be announced by the drug regulatory department of the people’s government of the relevant province, autonomous region, or municipality directly under the Central Government. Unauthorized announcement of the aforesaid information is prohibited.

Announcement of drug safety information shall be prompt, correct, comprehensive, and accompanied by necessary explanations to avoid misunderstanding.

No organization or individual shall fabricate or disseminate false drug safety information.

Article 108The people’s governments at or above the county level shall formulate emergency plans for drug safety incidents. MAHs, drug manufacturers, drug distributors, and medical institutions shall formulate their own action plans for handling drug safety incidents and organize and conduct training and drills.

Upon occurrence of a drug safety incident, a people’s government at or above the county level shall organize countermeasures without delay in accordance with the emergency plan. The relevant organization shall forthwith adopt effective measures to handle the matter and prevent escalation.

Article 109Where a drug regulatory department fails to discover systemic risks of drug safety in a timely manner or fails to eliminate drug safety hazards within their supervision and administration region in a timely manner, the people’s government at the same level or the drug regulatory department of the people’s government at a higher level shall schedule a warning meeting with the person-in-charge of the drug regulatory department.

Where a local people’s government fails to perform its drug safety duties or fails to eliminate serious drug safety hazards within their region in a timely manner, the people’s government at a higher level or the drug regulatory department of the people’s government at a higher level shall schedule a warning meeting with the person-in-charge of the local people’s government.

The department and the local people’s government shall forthwith adopt measures to rectify drug supervision and administration work.

The scheduled warning meeting and the rectification shall be included in the drug supervision and administration work review and appraisal records of the relevant department and the local people’s government.

Article 110A local people’s government and its drug regulatory departments shall not use means such as drug inspection, examination, or approval. To restrict or exclude drugs of non-local MAHs or drug manufacturers from entering the locality.

Article 111The drug regulatory departments and the professional and technical institutions for drugs established or appointed by the drug regulatory departments shall not participate in drug manufacture and business activities, and shall not recommend or supervise drug manufacture and sale in their names.

Staff of the drug regulatory departments and the drug professional and technical institutions established or appointed by the drug regulatory departments shall not take part in drug manufacturing and business activities.

Article 112Where the State Council has other special administrative provisions on narcotic drugs, psychiatric drugs, toxic drugs for medical use, radioactive drugs, and pharmaceutical precursor chemicals., such provisions shall be followed.

Article 113Upon discovery of illegal behaviors related to drugs which allegedly constitutes a criminal offense, the drug regulatory departments shall promptly forward the case to the public security authorities.

Where it is not necessary to pursue criminal liability in accordance with the law or criminal punishment is not required in accordance with the law, but it is necessary to pursue administrative liability, the public security authorities, the People’s Procuratorate and the People’s Court shall promptly forward the case to the drug regulatory departments.

Where the public security authorities, the People’s Procuratorate and the People’s Court seek assistance from the drug regulatory departments, the ecology and environment departments, etc., to provide inspection conclusion and confirmation opinion as well as decontamination of the involved drugs, the relevant departments shall promptly provide assistance.


Chapter XI

Legal Liability

Article 114Illegal acts that violate this Law and constitutes a crime shall be subject to severe criminal liabilities in accordance with the law.

Article 115Any organization that, without obtaining a Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution, manufactures or distributes drugs shall be ordered to close down, the drugs illegally produced or sold and the illegal gains there from shall be confiscated, and they shall be fined not less than fifteen times but not more than thirty times the value of the drugs illegally produced or sold (including the drugs sold and not sold, the same below). If the illegal values are less than RMB 100,000, it shall be counted as RMB 100,000.

Article 116Where counterfeit drugs are produced or sold, the drugs illegally produced or sold and the illegal gains therefrom hall be confiscated, an order shall be given to suspend production or business operations for rectification, drug approval documents shall be revoked, and a fine of not less than fifteen times but not more than thirty times the value of the said drugs shall be imposed. If the illegal values are less than RMB 100,000, it shall be counted as RMB 100,000. If the circumstances are serious, the Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution shall be revoked and the corresponding application shall be refused for the next ten years. If the drug MAHs are overseas enterprises, their drug importation shall be banned for the next ten years.

Article 117Where inferior drugs are produced or sold, the drugs illegally produced or sold and the illegal gains therefrom shall be confiscated, and a fine of not less than ten times but not more than twenty times the value of the said drugs shall be imposed. If the value of the drugs illegally produced or sold are less than RMB 100,000, it shall be counted as RMB 100,000. If the illegal values are less than RMB 10,000, it shall be counted as RMB 10,000. If the circumstances are serious, an order shall be given to suspend production or business operations for rectification, until revocation of drug approval documents, Drug Manufacturing Certificate, Drug Distribution Certificate, and Pharmaceutical Preparation Certificate for Medical Institution.

Where the decoction pieces of Chinese medicine produced and sold do not meet the national drug standards, but do not affect safety and effectiveness, an order shall be given to make rectifications within a time limit and a disciplinary warning shall be issued and a fine of not less than RMB 100,000 but not more than RMB 500,000 shall be imposed.

Article 118Where manufactured or distributed drugs are counterfeit drugs, or are inferior drugs resulting in serious consequences, the legal representative, the principal responsible persons, the persons directly in charge, and other directly responsible persons shall be subject to a confiscation of income received from their institutions during the occurrence of the violations and a fine of not less than 30% but not more than three times the income, and they shall be banned from engaging in drug production and distribution for life and detained by the public security authorities for not less than five days but not more than fifteen days.

Raw materials, excipients, packaging materials, and equipment used specifically for producing counterfeit or inferior drugs shall be confiscated.

Article 119Where drug use institutions use counterfeit drugs or inferior drugs, they shall be punished in accordance with the provisions on the sale of counterfeit drugs and inferior drugs. In serious circumstances, and if the legal representative, the principal responsible persons, the persons directly in charge, and other directly responsible persons as well as other responsible personnel have a medical license, the medical license shall be revoked.

Article 120Anyone who knows or should know that drug is counterfeit or inferior or falls under drugs prescribed in paragraph one of item (1) to item (5) in Article 124 of this Law and provides conveniences such as storage and transportation, the income from the illegal storage and transportation shall be confiscated, and a fine of not less than one time but not more than five times the illegal income shall be imposed. In serious circumstances, the offender shall be subject to a fine of not less than five times but not more than fifteen times. If the illegal values are less than RMB 50,000, it shall be counted as RMB 50,000.

Article 121The quality testing results provided by the drug control institution shall be included in the penalty notification on counterfeit and inferior drugs.

Article 122 If anyone falsifies, alters, trades in, rents out, or illegally lends certificates or drug approval documents, the illegal income shall be confiscated and a fine of not less than one time but not more than five times the illegal income shall be imposed. In serious circumstances, a fine of not less than five times but not more than fifteen times shall be imposed, and the Drug Manufacturing Certificate, Drug Distribution Certificate, Pharmaceutical Preparation Certificate for Medical Institution, and drug approval documents shall be revoked. The legal representative, the principal responsible persons, the persons directly in charge, and other directly responsible persons as well as other responsible personnel shall be subject to a fine of not less than RMB 20,000 but not more than RMB 200,000 and be banned from engaging in drug production and distribution for the next ten years, and may be detained by the public security authorities for not less than five days but not more than fifteen days. If the illegal values are less than RMB 100,000, it shall be counted as RMB 100,000.

Article 123Where an entity provides false certificates, data, materials, or samples, or fraudulently obtains a clinical trial permit, Drug Manufacturing Certificate, Drug Distribution Certificate, Pharmaceutical Preparation Certificate for Medical Institution or drug registration certificate, the relevant permit shall be revoked, and the corresponding application shall be refused for the next ten years and the entity shall be subject to a fine of not less than RMB 500,000 but not more than RMB 5,000,000. In serious circumstances, the legal representative, the principal responsible persons, the persons directly in charge, and other directly responsible persons as well as other responsible personnel shall be subject to a fine of not less than RMB 20,000 but not more than RMB 200,000 and be banned from engaging in the drug production and distribution activities for the next ten years, and may be detained by the public security authorities for not less than five days but not more than fifteen days.

Article 124In any of the following circumstances in violation of this Law, illegal gains, illegally manufactured, imported and distributed drugs and raw materials, excipients, packaging materials, and equipment used specifically for producing illegal drugs shall be confiscated, and the offender shall be ordered to stop production and business operations for rectification and shall be fined not less than fifteen times but not more than thirty times the value of the drugs illegally manufactured, imported, or distributed. If the illegal values are less than RMB 100,000, it shall be counted as RMB 100,000. In serious circumstance, the offender is subject to revocation of relevant approval documents until the Drug Manufacturing Certificate, Drug Distribution Certificate, or Pharmaceutical Preparation Certificate for Medical Institution is revoked. The legal representative, the principal responsible person, the persons directly in charge, and other directly responsible persons as well as other responsible personnel shall be subject to a confiscation of the income received from their institutions during the occurrence of the violations and a fine of not less than 30% but not more than three times the income, and they shall be banned from engaging in drug production and operation for ten years to life, and may be detained by the public security authorities for not less than five days but not more than fifteen days:

(1) manufacture of import drugs without drug approval documents;

(2) manufacture or import drugs with drug approval documents obtained by deception;

(3) manufacture medicines using active drug ingredients that have not been reviewed and approved;

(4) sale of drugs that have not been evaluated as required;

(5) manufacture or sale of drugs prohibited by the drug regulatory department of the State Council;

(6) fabricate production or testing records; or

(7) make significant changes in the drug production process without approval.

The sale of drugs prescribed in item (1) to item (3) of the preceding paragraph, or the use of drugs prescribed in item (1) to item (5) of the preceding paragraph by drug use institutions, shall be punished in accordance with the provisions of the preceding paragraph. In serious circumstances, where the legal representative, the principal responsible person, the persons directly in charge, and other directly responsible persons as well as other responsible personnel that have a medical license, the medical license shall be subject to revocation.

The importation of a small number of drugs that are already legally marketed overseas without approval, if the circumstances are relatively minor, may be given lighter punishment or exempted from punishment in accordance with the law.

Article 125In any of the following circumstances in violation of this Law, illegal gains, illegally manufactured, imported and distributed drugs and raw materials, excipients, packaging materials, and equipment used specifically for producing illegal drugs shall be confiscated, and the offender shall be ordered to stop production and business operations for rectification and be fined not less than RMB 500,000 but not more than RMB 5,000,000 the value of the drugs illegally manufactured, imported, or distributed. In serious circumstances, the offender shall be subject to revocation of relevant approval documents, Drug Manufacturing Certificate, and Drug Distribution Certificate, and the legal representative, the principal responsible person, the persons directly in charge, and other directly responsible persons as well as other responsible personnel shall be subject to a fine of not less than RMB 20,000 but not more than RMB 200,000, and shall be banned from engaging in drug production and operation for ten years to life.

(1) conduct drug clinical trial without approval;

(2) use packing materials or containers which come into direct contact with drugs and which have not been reviewed and approved for drug manufacture or distribution;

(3) use labels or packaging insert which have not been reviewed and approved.

Article 126Except where provided in this Law, MAHs, drug manufacturers, drug distributors, drug non-clinical safety evaluation research institutions, and drug clinical trial organizations which do not comply with GMP, GSP, GLP, or GCP shall be ordered to make correction within the time limit and be given a disciplinary warning. Where correction is not made within the prescribed period, it shall be subject to a fine of not less than RMB 100,000 but not more than RMB 500,000. In serious circumstances, it shall be subject to a fine of not less than RMB 500,000 but not more than RMB 2,000,000 and be ordered to stop production for rectification until revocation of drug approval documents, Drug Manufacturing Certificate, and Drug Distribution Certificate. Drug non-clinical safety evaluation research institution and drug clinical trial organizations shall be banned from conducting drug non-clinical safety evaluation studies or drug clinical trials for the next five years. The legal representative, the principal responsible person, the persons directly in charge, and other directly responsible persons as well as other responsible personnel shall be subject to a confiscation of income received from their institutions during the occurrence of the violations and a fine of not less than 10% but not more than 50% the income, and shall be banned from engaging in drug production and distribution for ten years to life.

Article 127In any of the following circumstances in violation of this Law, the offender shall be ordered to make correction within the time limit and be given a disciplinary warning. Where correction is not made within the prescribed period, it shall be subject to a fine of not less than RMB 100,000 but not more than RMB 500,000.

(1) conduct bioequivalence trial without filing;

(2) the clinical trial sponsor fails to promptly adjust the clinical trial plan, suspends or terminates clinical trial protocol, or fails to report to the drug regulatory department of the State Council during drug clinical trial, upon discovery of safety issues or other risks;

(3) fails to establish and implement a drug tracking system as required;

(4) fails to submit annual reports as required;

(5) does not file or report changes in drug manufacturing as required;

(6) fails to formulate a risk management plan after a drug goes to market; or

(7) does not conduct a drug post-marketing launch study or assessment as required.

Article 128Where drug packaging does include a label, or a packaging insert is not included as required, or where relevant information or the prescribed mark are not included as required, or where the literature does not include the relevant information or the prescribed mark as required, except for those treated as counterfeit or inferior drugs, an instruction for rectification and a disciplinary warning shall be given. If the circumstances are serious, the drug approval documents shall be revoked.

Article 129Where a drug MAH, drug manufacturer, drug distributor, or medical institution fails to procure drugs from a drug MAH or an enterprise which is qualified to manufacture or distribute drugs in violation of this Law, it shall be ordered to make rectification and illegally purchased drugs and the illegal gains therefrom shall be confiscated, and it shall be subject to a fine of not less than two times but not more than ten times the value of the drugs illegally purchased. In serious circumstances, the offender shall be subject to a fine of not less than ten times but not more than thirty time the value and revocation of relevant approval documents, Drug Manufacturing Certificate, Drug Distribution Certificate, and Pharmaceutical Preparation Certificate for Medical Institution. If the illegal values are less than RMB 50,000, it shall be counted as RMB 50,000.

Article 130Where a drug distributor fails to keep records for procurement and sale of drugs as prescribed, fails to state the dosage and administration of retail drugs correctly, or fails to make prescriptions, the offender shall be ordered to make correction within the time limit and be given a disciplinary warning. In serious circumstances, drug approval documents shall be revoked.

Article 131Where a third party platform provider for online drug transactions fails to perform its obligations, such as examine qualifications, report incidents, and cease to provide online services in violation of this Law, the offender shall be ordered to make correction and subject to a confiscation of illegal income and a fine of not less than RMB 200,000 but not more than RMB 2,000,000. In serious circumstances, the offender shall be ordered to stop production for rectification and be subject a fine of not less than RMB 2,000,000 but not more than RMB 5,000,000.

Article 132For importation of drugs that have obtained drug approval licenses, where the importer fails to file records with the drug regulatory departments of the designated port for importation in violation of this Law, the offender shall be ordered to make correction within the time limit and be given a disciplinary warning. Where correction is not made within the prescribed period, it shall be subject to revocation of relevant drug approval documents. 

Article 133Where a medical institution sells self-made preparations in violation of this Law, it shall be ordered to make correction, and be subject to a confiscation of preparations illegally sold and the illegal gains therefrom and a fine of not less than two times but not more than five times of the value of the illegally sold preparations. In serious circumstances, the offender is subject to a fine of not less than five times but not more than fifteen times of the illegal value. If the illegal values are less than RMB 50,000, it shall be counted as RMB 50,000.

Article 134Where a drug MAH fails to monitor adverse drug reactions or report suspected adverse drug reactions as required, the offender shall be ordered to make correction within the time limit and be given a disciplinary warning. Where correction is not made within the prescribed period, it shall be subject to production suspension and be fined not less than RMB 100,000 but not more than RMB 1,000,000.  

Where a drug distributor fails to report suspected adverse drug reactions as required, the offender shall be ordered to make correction within the time limit and be given a disciplinary warning. Where correction is not made within the prescribed period, it shall be subject to production suspension for rectification and be fined not less than RMB 50,000 but not more than RMB 500,000.

Where a medical institution fails to report suspected adverse drug reactions, the offender shall be ordered to make correction within the time limit and be given a disciplinary warning. Where correction is not made within the prescribed period, it shall be subject to a fine of not less than RMB 50,000 but not more than RMB 500,000.

Article 135Where a drug MAH is ordered by the drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the Central Government to recall a drug but refuses, it shall be subject to a fine of not less than five times but not more than ten times the value of the drug to be recalled. If the illegal values are less than RMB 100,000, it shall be counted as RMB 100,000. In serious circumstances, drug approval documents, Drug Manufacturing Certificate, and Drug Distribution Certificate shall be revoked. The legal representative, the principal responsible person, the persons directly in charge, and other directly responsible persons as well as other responsible personnel shall be subject to a fine of not less than RMB 20,000 but not more than RMB 200,000. Where a drug manufacturer, drug distributor or medical institution refuses to cooperate in the recall, it shall be subject to a fine of not less than RMB 100,000 but not more than RMB 500,000.

Article 136 Where the drug MAH is an overseas enterprise, and the appointed enterprise legal persons in China fail to perform relevant obligations in accordance with this Law, the provisions of this Law on the legal liability of drug MAH shall apply.

Article 137Any of the following acts shall be subject to heavier punishment within the scope of punishment in accordance with this Law:

(1) substitute narcotics, psychotropic substances, toxic drugs for medical use, radioactive drugs or pharmaceutical precursor chemicals for other drugs, or vice versa;

(2) produce or sell counterfeit or inferior drugs of which the main users are pregnant and parturient women, infants and children;

(3) manufacture and sale of counterfeit or inferior biological products;

(4) manufacture and sale of counterfeit or inferior drugs which cause personal injuries;

(5) repeated violations of manufacture and sale of counterfeit or inferior drugs; or

(6) refuse or evade supervision and inspection, forge, destroy, or conceal relevant evidential materials, or use seized or confiscated items without approval.

Article 138Where a drug control institution issues a false Certificate of Analysis (CoA), it shall be ordered to make correction and be given a disciplinary warning, and be subject to a fine of not less than RMB 200,000 but not more than RMB 1,000,000. The persons directly in charge and other directly responsible persons shall be demoted, removed, or dismissed in accordance with the law, illegal income shall be confiscated, and a fine of not more than RMB 50,000 shall be imposed. In serious circumstances, the qualification for testing shall be annulled. Where the drug control institution issues false testing conclusions and causes damages, it shall bear the corresponding liability of compensation for losses.

Article 139Administrative punishment prescribed in Article 115 to Article 138 of this Law shall be decided by the drug regulatory departments of people’s governments at or above the county level in accordance with division of work. The revocation of a permit or certificate shall be decided by the original issuing departments.

Article 140Where a drug MAH, drug manufacturer, drug distributor or medical institution violates the provisions of this Law in staff recruitment, the drug regulatory departments or the competent health departments shall order the drug MAH, drug manufacturer, drug distributor or medical institution to dismiss the staff, and impose a fine of not less than RMB 50,000 but not more than RMB 200,000.  

Article 141Where a drug MAH, drug manufacturer, drug distributor or medical institution gives or receives rake-offs or other benefits in the course of purchasing and selling drugs, or the drug MAH, drug manufacturer, drug distributor, or its agent gives or receives rake-offs or other improper gains to leading members, drug purchasers, physicians, and pharmacists of medical institutions using their drugs, the market regulatory department shall confiscate the illegal income and impose a fine of not less than RMB 300,000 but not more than RMB 3,000,000. In serious circumstances, the business license of the drug MAH, drug manufacturer and drug distributor shall be revoke and the drug approval documents, Drug Manufacturing Certificate and Drug Distribution Certificate shall be revoked by the drug regulatory departments.

Where a drug MAH, drug manufacturer or drug distributor bribes State officials in the process of drug development, manufacture, and distribution, the legal representative, the principal responsible person, the persons directly in charge, and other directly responsible persons as well as other responsible personnel shall be banned from engaging in drug production and operation for life.

Article 142Where leading members and procurement staff of a drug MAH, drug manufacturer, or drug distributor receives rake-offs or other improper gains in drug procurement and sale activities from other drug MAHs, drug manufacturers, drug distributors, or their agents, the illegal income shall be confiscated and punishment shall be imposed in accordance with the law. In serious circumstances, the offenders shall be banned from engaging in drug production and operation for the next five years.

Where leading members, drug purchasers, physicians, and pharmacists of a medical institution receives rake-offs or other improper gains from a drug MAH, drug manufacturer, drug distributor, or its agent, the competent health departments or the said medical institution shall impose punishment and confiscate the illegal income. In serious circumstances, their licenses to practice shall be revoked.

Article 143Persons who violate the provisions of this Law in fabricating or disseminating false drug safety information, if it constitutes a violation of security administration, the public security authorities shall impose security administration punishment in accordance with the law.

Article 144Where a drug MAH, drug manufacturer, drug distributor or medical institution harms users of their drugs in violation of this Law, it shall bear compensation liability in accordance with the law.

People who suffer problems due to drug quality issues may seek compensation from the drug MAH and the drug manufacturer and may also seek compensation from the drug distributor and medical institution. Upon receiving a claim for compensation, the entity is responsible for compensation. After the compensation has been made, it may seek recovery on the compensation in accordance with the law.

Where counterfeit or inferior drugs are manufactured or sold knowingly, in addition to seeking compensation, the victims or their immediate relatives may also seek indemnity of ten times the payment amount or three times the damages. Where the added compensation amount is less than RMB 1,000, it shall be counted as RMB 1,000.

Article 145Where a drug regulatory department or its designated drug professional and technical institutions participate in drug manufacturing and business activities, it shall be ordered by its higher-level competent administrative department to make correction, and its illegal income shall be confiscated. In serious circumstances, the persons directly in charge and other directly responsible persons shall be punished in accordance with the law.

Where the staff of a drug regulatory department or a drug professional and technical institution established or appointed by the drug regulatory department participate in drug manufacturing and business activities, they shall be punished in accordance with the law.

Article 146Where a drug regulatory department or its designated drug control institution illegally collects inspection fees during drug supervision and inspection, the relevant government department shall order it to return the fees and punish the persons directly in charge and other directly responsible persons in accordance with the law. In serious circumstances, the qualification for testing shall be annulled.

Article147Where a drug regulatory department commits any of the following acts in violation of this Law, the relevant permit shall be revoked, and the persons directly in charge and other directly responsible persons shall be punished in accordance with the law:

(1) approve drug clinical trials which do not satisfy the criteria;

(2) issue drugregistrationcertificatesfordrugswhichdonotsatisfythecriteria; or

(3) issue a Drug Manufacturing Certificate, Drug Distribution Certificate, or Pharmaceutical Preparation Certificate for Medical Institution to organizations which do not satisfy the criteria.

Article 148Where a people's government at or above the county level commits any of the following acts in violation of this Law, the persons directly in charge and other directly responsible persons shall be given a demerit or serious demerit. In serious circumstances, such individuals shall be demoted, removed, or dismissed:

(1) conceal, withhold, or omit information or make false reports of drug safety incidents;

(2) fail to promptly eliminate serious regional drug safety hazards and causing a severe drug safety incident within their administrative region or recurrent serious drug safety incidents; or

(3) incompetence in the performance of duties which causes serious adverse effects or serious losses.

Article 149Where a drug regulatory department commits any of the following acts in violation of this Law, the persons directly in charge and other directly responsible persons shall be given a demerit or serious demerit. In relatively serious circumstances, they shall be demoted or removed and in serious circumstances, they shall be dismissed:

(1) conceal, withhold, or omit information or make false reports of drug safety incidents;

(2) do not promptly investigate and deal with drug safety violations upon discovery;

(3) fail to promptly discover systemic risks of drug safety, or fail to promptly eliminate drug safety hazards within their supervision and administration region, resulting in serious effects; or

(4) do not perform drug supervision and administration duties, resulting in serious adverse effects or serious losses.

Article 150Where drug supervision and administration officers abuse their powers, engage in malpractice for personal gains, or neglect their duties, they shall be punished in accordance with the law.

Where the persons directly in charge and other directly responsible persons of a drug regulatory department fail to discharge their duties or commit misconduct in the investigation and punishment of illegal acts involving counterfeit or inferior drugs, they shall be subject to heavier punishment in accordance with the law.

Article151The value of products mentioned in this Chapter shall be calculated based on the marked prices of the drugs illegally produced or sold. Where there is no marked price, the value shall be calculated according to the market prices of drugs of the same type.


Chapter XII

Supplementary Provisions

Article 152Measures for cultivation, collection and breeding of Chinese medicinal materials shall be regulated in accordance with the provisions of applicable laws and administrative regulations.

Article 153Measures for traditional crude drugs customarily used in certain regions shall be formulated by the drug regulatory department together with the competent department for traditional Chinese medicines under the State Council.

Article 154Measures for enforcement of this Law by the Chinese People’s Liberation Army and Chinese Armed Police Force shall be formulated by the State Council and Central Military Commission in accordance with this Law.

Article 155 This Law shall go into effect as of December 1, 2019.

Source: Editor: Lydia
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