Revised Drug Administration Law of the People's Republic of China to Take Effect on December 1

August 26,The Drug Administration Law of the People's Republic of China was revised and adopted at the 12th Session of the Standing Committee of the 13th National People's Congress., which will take effect on December 1, 2019. VCBeat(WeChat ID: vcbeat) republished the full text.

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

Article 2 This Law shall apply to the activities of drug research and development, production, distribution, use, and supervision and administration within the territory of the People's Republic of China.

“Drugs” as referred to in this Law mean substances used for the prevention, treatment, or diagnosis of human diseases, intended to regulate human physiological functions, and for which indications or functional indications, usage, and dosage are specified, including traditional Chinese medicines, chemical drugs, and biological products.

Article 3 Drug administration shall be people-centered, adhering to the principles of risk management, whole-process control, and collaborative social governance. A scientific and stringent supervision and administration system shall be established to comprehensively improve drug quality and ensure the safety, efficacy, and accessibility of drugs.

Article 4 The State develops modern pharmaceuticals and traditional medicines, giving full play to their roles in disease prevention, medical treatment, and healthcare.

The State protects wild medicinal resource and traditional Chinese medicine varieties, and encourages the cultivation of authentic Chinese medicinal materials.

Article 5 The State encourages the research and development of new drugs, and protects the lawful rights and interests of citizens, legal persons, and other organizations in the research and development of new drugs.

Article 6 The State implements a marketing authorization holder system for drug administration. Drug marketing authorization holders shall be responsible for the safety, efficacy, and quality controllability of drugs throughout the entire process of drug research and development, production, distribution, and use, in accordance with the law.

Article 7 Entities engaged in the research and development, manufacturing, distribution, and use of drugs shall comply with laws, regulations, rules, standards, and norms, and ensure that information throughout the entire process is authentic, accurate, complete, and traceable.

Article 8 The drug regulatory department under the State Council shall be in charge of national drug supervision and administration. Relevant departments under the State Council shall be responsible for drug-related supervision and administration within their respective scopes of duties. The drug regulatory department under the State Council shall coordinate with relevant departments under the State Council to implement the national development plan and industrial policies for the pharmaceutical industry.

The drug regulatory departments of the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government shall be responsible for drug supervision and administration within their respective administrative areas. The departments bearing drug supervision and administration responsibilities of the people’s governments at the level of cities divided into districts and at the county level (hereinafter referred to as “drug regulatory departments”) shall be responsible for drug supervision and administration within their respective administrative areas. Relevant departments of local people’s governments at or above the county level shall be responsible for supervision and administration related to drugs within the scope of their respective duties.

Article 9 Local people's governments at or above the county level shall be responsible for drug supervision and administration within their respective administrative areas, provide unified leadership, organization, and coordination of drug supervision and administration as well as responses to drug safety emergencies, and establish and improve mechanisms for drug supervision and administration and information sharing.

Article 10 People's governments at or above the county level shall incorporate drug safety work into their respective national economic and social development plans, include funding for drug safety work in their respective government budgets, strengthen the capacity building of drug supervision and administration, and provide safeguards for drug safety work.

Article 11 The drug-related professional and technical institutions established or designated by the drug regulatory departments shall undertake tasks such as review, inspection, verification, monitoring, and evaluation required for the lawful implementation of drug supervision and administration.

Article 12 The State shall establish and improve a drug traceability system. The drug regulatory department under the State Council shall formulate unified standards and specifications for drug traceability, promote the interoperability and sharing of drug traceability information, and achieve full traceability of drugs.

The State establishes a pharmacovigilance system to monitor, identify, assess, and control adverse drug reactions and other harmful reactions associated with medication use.

Article 13 People's governments at all levels and their relevant departments, drug industry associations, etc., shall strengthen publicity and education on drug safety and carry out work to popularize knowledge of laws, regulations, and other matters related to drug safety.

News media shall conduct public welfare publicity on knowledge regarding laws and regulations on drug safety, and exercise public opinion supervision over illegal drug-related activities. Publicity and reporting on drugs shall be comprehensive, scientific, objective, and fair.

Article 14 Drug industry associations shall strengthen self-discipline, establish and improve industry standards, promote the construction of an industry credit system, and guide and supervise members to carry out drug production, operation, and other activities in accordance with the law.

Article 15 People's governments at or above the county level and their relevant departments shall, in accordance with relevant state provisions, commend and reward entities and individuals that have made outstanding contributions to the research and development, production, distribution, use, supervision, and administration of drugs.

Article 16 The State supports drug innovation guided by clinical value and demonstrating clear or special therapeutic efficacy for human diseases, encourages the development of new drugs featuring novel mechanisms of action, treatments for life-threatening diseases or rare diseases, or multi-target systemic regulatory and interventional effects on the human body, so as to promote technological progress in pharmaceuticals.

The State encourages the application of modern science and technology and traditional Chinese medicine (TCM) research methodologies to conduct scientific and technological research on TCM and drug development, establishes and improves a technical evaluation system that aligns with the characteristics of TCM, and promotes the inheritance and innovation of TCM.

The State shall take effective measures to encourage the research, development, and innovation of pediatric drugs, support the development of new varieties, dosage forms, and strengths of pediatric drugs that align with children’s physiological characteristics, and grant priority review and approval for pediatric drugs.

Article 17 Entities engaged in drug development activities shall comply with the Good Laboratory Practice for Non-Clinical Studies and the Good Clinical Practice for Drug Clinical Trials, to ensure that the entire process of drug development remains in continuous compliance with statutory requirements.

The Good Laboratory Practice for Non-Clinical Studies of Drugs and the Good Clinical Practice for Drug Clinical Trials shall be formulated by the drug regulatory department under the State Council in conjunction with other relevant departments under the State Council.

Article 18 Non-clinical drug studies shall be conducted in compliance with relevant national regulations, and shall have personnel, premises, equipment, instruments, and management systems commensurate with the research project, so as to ensure the authenticity of relevant data, materials, and samples.

Article 19 To conduct drug clinical trials, relevant data, materials, and samples—such as development methods, quality specifications, and results of pharmacological and toxicological studies—shall be submitted truthfully in accordance with the regulations of the drug regulatory department under the State Council, and approval shall be obtained from said department. The drug regulatory department under the State Council shall decide whether to approve the clinical trial application and notify the sponsor within 60 working days from the date of acceptance; failure to notify within this period shall be deemed as approval. For bioequivalence studies, filing with the drug regulatory department under the State Council shall be made.

Clinical drug trials shall be conducted at clinical trial institutions that meet the corresponding requirements. Clinical trial institutions for drugs are subject to a filing management system, with specific measures jointly formulated by the drug regulatory department and the health administrative department under the State Council.

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

The Ethics Committee shall establish working procedures for ethical review to ensure that the ethical review process is independent, objective, and impartial; supervise the standardized conduct of drug clinical trials; protect the lawful rights and interests of subjects; and safeguard public social interests.

Article 21 When conducting drug clinical trials, the purpose, risks, and other detailed information of the clinical trial shall be truthfully explained to the subjects or their guardians. Informed consent forms voluntarily signed by the subjects or their guardians shall be obtained, and effective measures shall be taken to protect the legitimate rights and interests of the subjects.

Article 22 During the conduct of drug clinical trials, if safety issues or other risks are identified, the 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. Where necessary, the drug regulatory department under the State Council may order adjustments to the clinical trial protocol, suspension, or termination of the clinical trial.

Article 23 For drugs under clinical trial that are intended to treat life-threatening diseases with no effective treatment available, if medical observation indicates potential benefits and ethical principles are met, such drugs may be used for other patients with the same condition within the institution conducting the clinical trial, subject to review and informed consent.

Article 24 Drugs marketed within the territory of China shall be approved by the drug regulatory department under the State Council and obtain a drug registration certificate; however, this shall not apply to traditional Chinese medicinal materials and prepared slices thereof that are not subject to approval management. The catalog of traditional Chinese medicinal materials and prepared slices subject to approval management shall be formulated by the drug regulatory department under the State Council in conjunction with the competent department of traditional Chinese medicine under the State Council.

Applications for drug registration shall provide authentic, sufficient, and reliable data, materials, and samples to demonstrate the safety, efficacy, and quality controllability of the drug.

Article 25 For drugs applied for registration, the drug regulatory department under the State Council shall organize pharmaceutical, medical and other technical personnel to conduct review, examine the safety, efficacy and quality controllability of the drugs, as well as the applicant’s capabilities in quality management, risk prevention and control, and liability compensation; those meeting the conditions shall be issued a Drug Registration Certificate.

When approving drugs, the drug regulatory department under the State Council shall conduct concurrent review and approval of chemical active pharmaceutical ingredients (APIs), concurrent review of related excipients and packaging materials and containers in direct contact with drugs, and concurrent approval of drug quality standards, manufacturing processes, labels, and package inserts.

"Excipients as referred to in this Law mean the excipients and additives used in the production of drugs and the preparation of prescriptions."

Article 26 For drugs intended to treat diseases that are seriously life-threatening and for which no effective treatment is currently available, as well as drugs urgently needed for public health purposes, conditional approval may be granted if existing data from drug clinical trials demonstrate efficacy and allow prediction of their clinical value. The relevant matters shall be specified in the Drug Registration Certificate.

Article 27 The drug regulatory department under the State Council shall improve the system for drug review and approval, strengthen capacity building, establish and improve mechanisms for communication, consultation with experts, etc., optimize the review and approval process, and enhance the efficiency of drug review and approval.

The review conclusions and basis for approved drugs shall be disclosed in accordance with the law to accept public supervision. Trade secrets known during the review and approval process shall be kept confidential.

Article 28 Drugs shall comply with the national drug standards. Where the drug quality standards approved by the drug regulatory department under the State Council are higher than the national drug standards, the approved drug quality standards shall apply; where there are no national drug standards, the drugs shall comply with the approved drug quality standards.

The "Pharmacopoeia of the People's Republic of China" and drug standards promulgated by the drug regulatory department under the State Council constitute the national drug standards.

The drug regulatory department of the State Council, in conjunction with the health administrative department of the State Council, shall organize the Pharmacopoeia Commission to be responsible for the formulation and revision of national drug standards.

The drug testing institutions established or designated by the drug regulatory department under the State Council shall be responsible for the calibration of national drug reference standards and reference substances.

Article 29 The drug names included in the national drug standards are the generic names of drugs. Where a name has already been adopted as a generic name for a drug, such name shall not be used as a drug trademark.

Article 30 A drug marketing authorization holder refers to an enterprise or a drug research and development institution that has obtained a drug registration certificate.

Marketing authorization holders for drugs shall, in accordance with the provisions of this Law, assume responsibility for non-clinical studies, clinical trials, production and operation, post-marketing research, adverse reaction monitoring, reporting, and handling of drugs. Other entities and individuals engaged in drug development, production, distribution, storage, transportation, and use shall bear corresponding responsibilities in accordance with the law.

The legal representative and principal person in charge of the drug marketing authorization holder shall bear full responsibility for drug quality.

Article 31 The drug marketing authorization holder shall establish a drug quality assurance system and assign dedicated personnel to independently be responsible for drug quality management.

Marketing Authorization Holders (MAHs) shall conduct regular audits of the quality management systems of contracted drug manufacturers and drug distributors to supervise their continued capability in quality assurance and control.

Article 32 A drug marketing authorization holder may manufacture drugs on its own or entrust a drug manufacturer to produce them.

Where a drug marketing authorization holder manufactures drugs on its own, it shall obtain a Drug Manufacturing License in accordance with the provisions of this Law; where it entrusts the manufacturing to another party, it shall entrust a qualified drug manufacturing enterprise. The drug marketing authorization holder and the entrusted manufacturing enterprise shall enter into an entrustment agreement and a quality agreement, and strictly fulfill the obligations stipulated therein.

The drug regulatory department under the State Council shall formulate guidelines for quality agreements on entrusted drug production, to guide and supervise drug marketing authorization holders and contracted manufacturing enterprises in fulfilling their drug quality assurance obligations.

Blood products, narcotic drugs, psychotropic substances, medicinal toxic drugs, and drug precursor chemicals shall not be manufactured under contract; however, exceptions may apply as stipulated by the drug regulatory department of the State Council.

Article 33 The marketing authorization holder of a drug shall establish procedures for the release of drugs to the market, review the drugs released from the manufacturing facility by the drug manufacturer, and only release them after being signed off by the authorized person for quality. Drugs that do not meet national drug standards shall not be released.

Article 34 A drug marketing authorization holder may sell the drugs for which it has obtained a drug registration certificate on its own, or may entrust a drug operation enterprise to sell such drugs. Where a drug marketing authorization holder engages in drug retail activities, it shall obtain a Drug Operation License.

Where a drug marketing authorization holder sells drugs on its own, it shall meet the conditions stipulated in Article 52 of this Law; where it entrusts sales to another party, it shall engage a qualified drug distribution enterprise. The drug marketing authorization holder and the entrusted distribution enterprise shall enter into an entrustment agreement and strictly fulfill the obligations agreed upon therein.

Article 35 Where a drug marketing authorization holder, drug manufacturer, or drug distributor entrusts the storage and transportation of drugs to another party, it shall assess the entrusted party’s quality assurance capabilities and risk management capabilities, enter into an entrustment agreement specifying matters such as drug quality responsibilities and standard operating procedures, and supervise the entrusted party.

Article 36 Drug marketing authorization holders, drug manufacturers, drug distributors, and medical institutions shall establish and implement a drug traceability system, provide traceability information in accordance with regulations, and ensure that drugs are traceable.

Article 37 Marketing authorization holders for drugs shall establish an annual reporting system, and report annually to the drug regulatory departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government on the production and sales of drugs, post-marketing research, risk management, and other matters in accordance with regulations.

Article 38 Where the drug marketing authorization holder is an overseas enterprise, a corporate legal person designated by it within the territory of China shall fulfill the obligations of the drug marketing authorization holder and bear joint and several liability with the drug marketing authorization holder.

Article 39 Manufacturers of traditional Chinese medicine (TCM) decoction pieces shall fulfill the relevant obligations of the drug marketing authorization holder, implement whole-process management over the production and sales of TCM decoction pieces, establish a traceability system for TCM decoction pieces, and ensure that TCM decoction pieces are safe, effective, and traceable.

Article 40 Upon approval by the drug regulatory department under the State Council, a drug marketing authorization holder may transfer the drug marketing authorization. The transferee shall possess the capabilities in quality management, risk prevention and control, and liability compensation necessary to ensure the safety, efficacy, and quality controllability of the drug, and shall fulfill the obligations of a drug marketing authorization holder.

Article 41 Any entity engaged in drug production activities shall obtain approval from the drug regulatory department of the people's government of the province, autonomous region, or municipality directly under the Central Government where it is located, and obtain a Drug Production License. No drug may be produced without a Drug Production License.

The Drug Manufacturing License shall indicate the validity period and scope of production, and shall be subject to re-examination and reissuance upon expiration.

Article 42 To engage in drug manufacturing activities, the following conditions shall be met:

(1) Having legally qualified pharmaceutical technicians, engineering technicians, and corresponding skilled workers;

(2) Possessing manufacturing premises, facilities, and hygienic conditions appropriate for pharmaceutical production;

(3) Having an organization, personnel, and necessary instruments and equipment capable of conducting quality management and quality inspection of the drugs produced;

(4) It has rules and regulations to ensure drug quality, which comply with the Good Manufacturing Practice for Drugs formulated by the drug regulatory department under the State Council in accordance with this Law.

Article 43 Entities engaged in drug manufacturing activities shall comply with the Good Manufacturing Practice for Drugs, establish and improve a quality management system for drug production, and ensure that the entire drug manufacturing process continuously meets statutory requirements.

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

Article 44 Drugs shall be manufactured in accordance with the national drug standards and the manufacturing processes approved by the drug regulatory department. Production and inspection records shall be complete and accurate, and shall not be fabricated.

Chinese herbal medicine pieces shall be processed in accordance with national drug standards; where no national drug standards are specified, they shall be processed in accordance with the processing specifications formulated by the drug regulatory departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government. The processing specifications formulated by the drug regulatory departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government shall be filed with the drug regulatory department of the State Council for record. Those that do not comply with national drug standards or are not processed in accordance with the processing specifications formulated by the drug regulatory departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government shall not be released from the factory or sold.

Article 45 The raw materials and excipients required for drug production shall comply with the requirements for pharmaceutical use and the relevant provisions of the Good Manufacturing Practice for Drugs.

For drug manufacturing, suppliers of raw materials, excipients, and other inputs shall be audited in accordance with regulations to ensure that the purchased and used raw materials, excipients, and other inputs comply with the requirements stipulated in the preceding paragraph.

Article 46 Packaging materials and containers that come into direct contact with drugs shall meet pharmaceutical requirements and comply with standards for safeguarding human health and safety.

For packaging materials and containers that directly contact drugs and fail to meet quality standards, the drug regulatory authority shall order their discontinuation of use.

Article 47 Drug manufacturing enterprises shall conduct quality testing on drugs. Drugs that fail to meet the national drug standards shall not be released from the factory.

Pharmaceutical manufacturers shall establish procedures for the release of finished products, specifying the standards and conditions for such release. Products that meet the specified standards and conditions may be released only after being signed off by the Qualified Person.

Article 48 Drug packaging shall meet the requirements for drug quality and facilitate storage, transportation, and medical use.

Chinese medicinal materials shall be packaged for shipment. Each package shall be labeled with the product name, place of origin, date, and supplier, and shall bear a mark indicating compliance with quality standards.

Article 49 Drug packaging shall be printed or affixed with labels in accordance with regulations and accompanied by package inserts.

Labels and package inserts shall specify the drug’s generic name, ingredients, specifications, marketing authorization holder and its address, manufacturing enterprise and its address, approval number, batch number, date of manufacture, expiration date, indications or functional indications, dosage and administration, contraindications, adverse reactions, and precautions. The text on labels and package inserts shall be clear, and items such as the date of manufacture and expiration date shall be prominently marked and easily identifiable.

The labels and package inserts of narcotic drugs, psychotropic substances, medicinal toxic drugs, radioactive pharmaceuticals, external-use drugs, and over-the-counter (OTC) drugs shall bear the prescribed marks.

Article 50 Personnel of drug marketing authorization holders, drug manufacturers, drug distributors, and medical institutions who have direct contact with drugs shall undergo health examinations annually. Those suffering from infectious diseases or other conditions that may contaminate drugs shall not engage in work involving direct contact with drugs.

Article 51 Entities engaged in pharmaceutical wholesale activities shall obtain approval from the drug regulatory department of the people's government of the province, autonomous region, or municipality directly under the Central Government where they are located, and obtain a Drug Operation License. Entities engaged in pharmaceutical retail activities shall obtain approval from the drug regulatory department of the local people's government at or above the county level where they are located, and obtain a Drug Operation License. No entity may engage in pharmaceutical operations without a Drug Operation License.

The Drug Operation Permit shall indicate the validity period and scope of business, and shall be re-examined and reissued upon expiration.

Drug regulatory authorities shall, when granting drug operation licenses, in addition to adhering to the conditions stipulated in Article 52 of this Law, follow the principle of facilitating public access to medications.

Article 52 Entities engaged in pharmaceutical business operations shall meet the following conditions:

(1) There are legally qualified pharmacists or other pharmaceutical technical personnel;

(2) Possess business premises, equipment, warehousing facilities, and a hygienic environment appropriate for the pharmaceutical products being handled;

(3) Possession of a quality management department or personnel commensurate with the pharmaceutical products handled;

(4) Have rules and regulations to ensure drug quality, and comply with the Good Supply Practice (GSP) for Drugs formulated by the drug regulatory department of the State Council in accordance with this Law.

Article 53 Entities engaged in drug distribution shall comply with the Good Supply Practice for Pharmaceutical Products, establish and improve a quality management system for drug distribution, and ensure that the entire process of drug distribution continuously meets statutory requirements.

The State encourages and guides the chain operation of drug retail. The headquarters of enterprises engaged in drug retail chain operations shall establish a unified quality management system and fulfill management responsibilities for the business activities of their affiliated retail enterprises.

The legal representative and principal person in charge of a drug distribution enterprise shall bear full responsibility for the enterprise’s drug distribution activities.

Article 54 The State implements a classified management system for prescription drugs and over-the-counter drugs. Specific measures shall be formulated by the drug regulatory department under the State Council in conjunction with the health administrative department under the State Council.

Article 55 Marketing authorization holders for drugs, drug manufacturers, drug distributors, and medical institutions shall procure drugs from marketing authorization holders for drugs or enterprises qualified for drug production or distribution; however, this shall not apply to the procurement of Chinese crude drugs that are not subject to approval administration.

Article 56 Drug trading enterprises purchasing drugs shall establish and implement a system for inspection and acceptance of incoming goods, verifying the certificates of conformity and other labels of the drugs; those that do not meet the prescribed requirements shall not be purchased or sold.

Article 57 Drug trading enterprises shall maintain authentic and complete records for the purchase and sale of drugs. Such records shall specify the generic name, dosage form, specification, batch number, expiration date, marketing authorization holder, manufacturer, purchasing or selling entity, quantity purchased or sold, price, date of transaction, and other particulars as required by the drug regulatory department under the State Council.

Article 58 Drug operation enterprises shall ensure the accuracy of retail drug sales, and correctly explain the usage, dosage, and precautions. Prescription dispensing shall be subject to verification; drugs listed in the prescription shall not be altered or substituted without authorization. Prescriptions with compatibility contraindications or excessive dosages shall be refused for dispensing; if necessary, dispensing may proceed only after the prescribing physician has made corrections or re-signed the prescription.

Pharmaceutical trading enterprises selling Chinese herbal medicines shall indicate the place of origin.

Pharmacists and other pharmaceutical technical personnel who have been legally qualified shall be responsible for the enterprise’s drug management, prescription review and dispensing, and guidance on rational drug use.

Article 59 Drug trading enterprises shall formulate and implement drug storage management systems, and take necessary measures such as refrigeration, freeze protection, moisture proofing, insect control, and rodent control to ensure drug quality.

Inspection procedures shall be implemented for the inbound and outbound handling of pharmaceutical products.

Article 60 Chinese herbal medicines may be sold in urban and rural fair trade markets, except as otherwise provided by the State Council.

Article 61 Marketing authorization holders of drugs and drug operation enterprises that sell drugs via the Internet shall comply with the relevant provisions of this Law on drug operation. Specific administrative measures shall be formulated by the drug regulatory department under the State Council in conjunction with the health administrative department under the State Council and other relevant departments.

Vaccines, blood products, narcotic drugs, psychotropic substances, medicinal toxic drugs, radioactive pharmaceuticals, and drug precursor chemicals subject to special state management shall not be sold online.

Article 62 Providers of third-party platforms for online drug transactions shall file records with the drug regulatory departments of the people's governments of the provinces, autonomous regions, or municipalities directly under the Central Government where they are located, in accordance with the provisions of the drug regulatory department under the State Council.

Third-party platform providers shall, in accordance with the law, review the qualifications of drug marketing authorization holders and drug distribution enterprises applying to operate on the platform, ensure their compliance with statutory requirements, and oversee drug distribution activities conducted on the platform.

Where a third-party platform provider discovers that a drug marketing authorization holder or a drug trading enterprise operating on its platform has engaged in conduct violating the provisions of this Law, it shall promptly halt such conduct and immediately report the matter to the drug regulatory department of the people’s government at the county level in its locality; where serious illegal conduct is discovered, it shall immediately suspend the provision of online transaction platform services.

Article 63 Newly discovered medicinal materials and those introduced from abroad may be sold only after approval by the drug regulatory department under the State Council.

Article 64 Drugs shall be imported through ports authorized for drug importation, and the enterprises importing such drugs shall file records with the drug regulatory department at the location of the port. The Customs shall handle customs clearance procedures based on the Drug Import Clearance Certificate issued by the drug regulatory department. Without a Drug Import Clearance Certificate, the Customs shall not release the goods.

The drug regulatory authority at the port of entry shall notify the drug testing institution to conduct random sampling and testing of imported drugs in accordance with the regulations of the State Council's drug regulatory authority.

The ports permitted for drug imports shall be proposed by the drug regulatory department under the State Council in conjunction with the General Administration of Customs, and submitted to the State Council for approval.

Article 65 Where medical institutions urgently need to import a small quantity of drugs for clinical purposes, such imports may be approved by the drug regulatory department under the State Council or by the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government as authorized by the State Council. The imported drugs shall be used within designated medical institutions for specific medical purposes.

Bringing a small quantity of medicines into the country for personal use shall be handled in accordance with relevant national regulations.

Article 66 The import and export of narcotic drugs and psychotropic substances within the scope prescribed by the State shall require an Import Permit or Export Permit issued by the drug regulatory department under the State Council.

Article 67 The importation of drugs with unproven efficacy, severe adverse reactions, or those that pose a risk to human health for other reasons is prohibited.

Article 68 The drug regulatory department under the State Council shall designate drug testing institutions to conduct testing on the following drugs prior to sale or importation; any such drugs that have not been tested or fail to pass the testing shall not be sold or imported:

(1) Drugs sold for the first time within the territory of China;

(2) Biological products as prescribed by the drug regulatory department of the State Council;

(3) Other drugs as prescribed by the State Council.

Article 69 Medical institutions shall be staffed with pharmacists or other pharmaceutical technical personnel who have been qualified in accordance with the law, to undertake tasks such as drug management, prescription review and dispensing, and guidance on rational drug use within their respective institutions. Non-pharmaceutical technical personnel shall not directly engage in pharmaceutical technical work.

Article 70 Medical institutions purchasing drugs shall establish and implement a system for inspection and acceptance of incoming goods, verifying the drug quality certification and other labels; those that do not meet the prescribed requirements shall not be purchased or used.

Article 71 Medical institutions shall have premises, equipment, storage facilities, and sanitary environments appropriate for the drugs they use, formulate and implement drug storage management systems, and take necessary measures such as refrigeration, freeze protection, moisture proofing, insect control, and rodent control to ensure drug quality.

Article 72 Medical institutions shall adhere to the principles of safe, effective, economical, and rational drug use, ensure rational medication in accordance with the guiding principles for clinical application of drugs, clinical diagnosis and treatment guidelines, and drug package inserts, and review the appropriateness of physicians' prescriptions and medication orders.

Other drug-using entities outside of medical institutions shall comply with the provisions of this Law regarding the use of drugs by medical institutions.

Article 73 Pharmacists or other pharmaceutical technicians who are qualified in accordance with the law shall verify prescriptions when dispensing them, and shall not unauthorizedly alter or substitute the medications listed therein. Prescriptions containing incompatibilities or exceeding dosage limits shall be refused for dispensing; where necessary, such prescriptions may be dispensed only after the prescribing physician has made corrections or re-signed them.

Article 74 Medical institutions preparing pharmaceutical preparations 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 where they are located, and obtain a Medical Institution Preparation License. Without a Medical Institution Preparation License, no pharmaceutical preparations may be prepared.

The Medical Institution Preparation License shall indicate its validity period, and shall be subject to re-examination and reissuance upon expiration.

Article 75 Medical institutions that prepare pharmaceutical preparations shall have facilities, management systems, testing instruments, and sanitary environments capable of ensuring the quality of such preparations.

Medical institutions preparing pharmaceutical preparations shall conduct such preparation in accordance with the approved manufacturing processes, and the required raw materials, excipients, packaging materials, and other components shall comply with pharmaceutical requirements.

Article 76 The preparations compounded by medical institutions shall be varieties that are clinically needed by the institutions themselves but not available on the market, and 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 where the institutions are located; however, exceptions shall apply where laws provide otherwise for the compounding of traditional Chinese medicine preparations.

Preparations compounded by medical institutions shall undergo quality inspection in accordance with relevant regulations; those that pass the inspection may be used within the institution upon presentation of a physician’s prescription. With approval from the drug regulatory department under the State Council or from the drug regulatory departments of the people’s governments of provinces, autonomous regions, or municipalities directly under the Central Government, such preparations may be allocated for use among designated medical institutions.

Preparations compounded by medical institutions shall not be sold on the market.

Article 77 The marketing authorization holder of a drug shall formulate a post-marketing risk management plan for the drug, proactively conduct post-marketing studies, further verify the safety, efficacy, and quality controllability of the drug, and strengthen the continuous management of marketed drugs.

Article 78 For drugs granted conditional approval, the drug marketing authorization holder shall implement corresponding risk management measures and complete the relevant studies as required within the specified time limit. If the studies are not completed as required within the prescribed period, or if it fails to demonstrate that the benefits outweigh the risks, the drug regulatory department under the State Council shall take action in accordance with the law, up to and including the revocation of the drug registration certificate.

Article 79 Changes in the drug manufacturing process shall be subject to classified management according to the degree of risk and impact on the safety, efficacy, and quality controllability of the drugs. Major changes shall be approved by the drug regulatory department under the State Council, while other changes shall be filed or reported in accordance with the regulations of the drug regulatory department under the State Council.

Marketing Authorization Holders shall, in accordance with the regulations of the drug regulatory department under the State Council, comprehensively assess and verify the impact of changes on the safety, efficacy, and quality controllability of drugs.

Article 80 The marketing authorization holder shall conduct post-marketing adverse reaction monitoring for drugs, proactively collect and track suspected adverse drug reaction information, and promptly implement risk control measures for drugs with identified risks.

Article 81 Drug marketing authorization holders, drug manufacturers, drug distributors, and medical institutions shall regularly monitor the quality, efficacy, and adverse reactions of the drugs they produce, distribute, or use. Upon discovery of suspected adverse reactions, they shall promptly report to the drug regulatory department and the health administrative department. Specific measures shall be formulated by the drug regulatory department under the State Council in conjunction with the health administrative department under the State Council.

For drugs confirmed to have caused serious adverse reactions, the drug regulatory department under the State Council or the drug regulatory departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government shall take emergency control measures, such as suspending production, distribution, and use, based on actual circumstances. They shall organize an evaluation within five days and make an administrative handling decision in accordance with the law within fifteen days from the date when the evaluation conclusion is issued.

Article 82 Where a drug has quality issues or other safety hazards, the drug marketing authorization holder shall immediately cease sales, notify relevant drug distributors and medical institutions to stop selling and using the drug, recall the sold drugs, promptly disclose recall information, and, if necessary, immediately halt production. The drug marketing authorization holder shall report the status of the drug recall and disposal to the drug regulatory department and the health administrative department of the people’s government of the province, autonomous region, or municipality directly under the Central Government. Drug manufacturers, drug distributors, and medical institutions shall cooperate.

Where a drug marketing authorization holder fails to recall drugs as required by law, the drug regulatory department of the people's government of the province, autonomous region, or municipality directly under the Central Government shall order it to do so.

Article 83 The marketing authorization holder of a drug shall conduct regular post-marketing evaluations on the safety, efficacy, and quality controllability of marketed drugs. Where necessary, the drug regulatory department under the State Council may order the marketing authorization holder to conduct a post-marketing evaluation or directly organize and conduct such evaluation.

Upon evaluation, the drug registration certificate shall be revoked for drugs with uncertain efficacy, significant adverse reactions, or those that pose a risk to human health for other reasons.

Drugs whose drug registration certificates have been cancelled shall not be manufactured, imported, sold, or used.

Drugs whose drug registration certificates have been revoked, or that have exceeded their expiration dates, shall be destroyed under the supervision of the drug regulatory department or subjected to other harmless disposal measures in accordance with the law.

Article 84 The State shall improve the drug procurement management system, monitor drug prices, conduct cost and price investigations, strengthen supervision and inspection of drug pricing, investigate and punish price-related illegal acts such as price monopoly and price gouging in accordance with the law, and maintain order in drug pricing.

Article 85 For drugs subject to market-regulated pricing in accordance with the law, drug marketing authorization holders, drug manufacturers, drug distributors, and medical institutions shall set prices in accordance with the principles of fairness, reasonableness, honesty and good faith, and consistency between quality and price, so as to provide drug users with reasonably priced drugs.

Drug marketing authorization holders, drug manufacturers, drug distributors, and medical institutions shall comply with the regulations on drug price management issued by the State Council’s competent department for drug pricing, establish and clearly display retail drug prices, and are prohibited from engaging in practices such as excessive profiteering, price monopolies, and price fraud.

Article 86 Marketing authorization holders, drug manufacturers, drug distributors, and medical institutions shall provide the competent authority for drug pricing with information such as the actual purchase and sale prices and volumes of their drugs, in accordance with the law.

Article 87 Medical institutions shall provide patients with a price list of the drugs used, truthfully disclose the prices of their commonly used drugs in accordance with regulations, and strengthen the management of rational drug use. Specific measures shall be formulated by the health administrative department of the State Council.

Article 88: Marketing authorization holders, drug manufacturers, drug distributors, and medical institutions are prohibited from offering or accepting kickbacks or other improper benefits in the purchase and sale of drugs.

Marketing authorization holders, drug manufacturers, and drug distributors or their agents are prohibited from providing property or other improper benefits to the heads of medical institutions that use their drugs, as well as to drug procurement personnel, physicians, pharmacists, and other relevant individuals, under any pretext. The heads of medical institutions, drug procurement personnel, physicians, pharmacists, and other relevant individuals are prohibited from accepting property or other improper benefits provided by marketing authorization holders, drug manufacturers, and drug distributors or their agents, under any pretext.

Article 89 Drug advertisements shall be approved by the advertisement review authority designated by the people's government of the province, autonomous region, or municipality directly under the Central Government where the advertiser is located; no drug advertisement may be published without such approval.

Article 90 The content of drug advertisements shall be truthful and lawful, based on the drug package inserts approved by the drug regulatory department under the State Council, and shall not contain any false information.

Drug advertisements shall not contain any assertions or guarantees regarding efficacy or safety; nor shall they use the names or images of state organs, scientific research institutions, academic institutions, industry associations, or experts, scholars, physicians, pharmacists, patients, etc., for recommendations or endorsements.

Non-drug advertisements shall not contain any promotion related to drugs.

Article 91 With respect to drug pricing and advertising, matters not provided for in this Law shall be governed by the provisions of the Price Law of the People's Republic of China, the Anti-Monopoly Law of the People's Republic of China, the Anti-Unfair Competition Law of the People's Republic of China, the Advertising Law of the People's Republic of China, and other relevant laws.

Article 92 The State shall implement a system for the reserve of drugs and establish a two-tier drug reserve system at the central and local levels.

In the event of major disasters, epidemics, or other emergencies, pharmaceuticals may be urgently requisitioned in accordance with the provisions of the Emergency Response Law of the People's Republic of China.

Article 93 The State shall implement the National Essential Medicines System, select an appropriate number of essential medicine varieties, strengthen organized production and reserves, enhance the supply capacity of essential medicines, and meet the basic medication needs for disease prevention and control.

Article 94 The State shall establish a monitoring system for the supply and demand of drugs, timely collect, aggregate, and analyze information on the supply and demand of drugs in short supply, issue early warnings for such drugs, and take response measures.

Article 95 The State shall implement a list-based management system for drugs in short supply. Specific measures shall be formulated by the health administrative department of the State Council in conjunction with the drug regulatory department of the State Council and other relevant departments.

If a drug marketing authorization holder ceases the production of drugs in short supply, it shall report to the drug regulatory department under the State Council or to the drug regulatory departments of the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government, in accordance with relevant regulations.

Article 96 The State encourages the research, development, and production of drugs in short supply, and gives priority to the review and approval of new drugs that are urgently needed for clinical use or for the prevention and treatment of major infectious diseases, rare diseases, and other conditions.

Article 97 The State Council may restrict or prohibit the export of drugs in short supply. When necessary, relevant departments under the State Council may take measures such as organizing production, intervening in pricing, and expanding imports to ensure drug supply.

Drug Marketing Authorization Holders, drug manufacturers, and drug distributors shall ensure the production and supply of drugs in accordance with relevant regulations.

Article 98 The production (including preparation, as hereinafter referred to), sale, and use of counterfeit drugs and inferior drugs are prohibited.

The following circumstances shall be considered as counterfeit drugs:

(1) The ingredients contained in the drug do not conform to those specified in the national drug standards;

(2) Passing off non-drug products as drugs, or passing off one type of drug as another;

(3) Deteriorated drugs;

(4) The indications or functional indications stated on the drug label exceed the prescribed scope.

A drug shall be deemed substandard if any of the following circumstances exists:

(1) The content of the drug ingredients does not comply with the national drug standards;

(2) Contaminated drugs;

(3) Drugs without an indicated expiration date or with an altered expiration date;

(4) Drugs without indicated or with altered batch numbers;

(5) Drugs that have exceeded their expiration date;

(6) Drugs with preservatives or excipients added without authorization;

(7) Other drugs that do not comply with drug standards.

The production and importation of drugs without drug approval certificates are prohibited; the use of active pharmaceutical ingredients, packaging materials, and containers that have not been reviewed and approved in accordance with regulations for drug production is prohibited.

Article 99 The drug regulatory department shall, in accordance with the provisions of laws and regulations, conduct supervision and inspection of activities such as drug research and development, production, distribution, and use by drug-using entities. Where necessary, it may conduct extended inspections on entities and individuals that provide products or services for drug research and development, production, distribution, and use. Relevant entities and individuals shall cooperate and shall not refuse or conceal information.

Drug regulatory authorities shall implement key supervision and inspection for high-risk drugs.

Where there is evidence indicating potential safety hazards, the drug regulatory authority shall, based on the findings of supervision and inspection, take measures such as issuing warnings, conducting regulatory interviews, requiring rectification within a specified time limit, and suspending production, sales, use, and importation, and shall promptly disclose the results of the inspection and subsequent actions.

When conducting supervision and inspections, drug regulatory authorities shall present their credentials and maintain the confidentiality of any trade secrets obtained during such inspections.

Article 100 The drug regulatory department may, as required for supervision and administration, conduct spot checks and inspections on drug quality. Such spot checks and inspections shall be carried out by sampling in accordance with relevant provisions, and no fees shall be charged; samples shall be purchased. The expenses incurred shall be disbursed in accordance with the regulations of the State Council.

For drugs and related materials for which there is evidence indicating potential harm to human health, the drug regulatory department may seal or detain them and make an administrative disposition decision within seven days; if the drugs require testing, the administrative disposition decision shall be made within fifteen days from the date of issuance of the test report.

Article 101 The drug regulatory departments of the State Council and of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government shall regularly announce the results of spot checks and inspections on drug quality; where an announcement is inappropriate, corrections shall be made within the original scope of the announcement.

Article 102 Where a party has objections to the results of drug testing, it may, within seven days from the date of receipt of such results, apply for re-testing to the original drug testing institution or to a drug testing institution established or designated by the drug regulatory department at the next higher level; alternatively, it may directly apply for re-testing to a drug testing institution established or designated by the drug regulatory department under the State Council. The drug testing institution accepting the application for re-testing shall issue a re-testing conclusion within the time limit prescribed by the drug regulatory department under the State Council.

Article 103 The drug regulatory department shall conduct inspections of drug marketing authorization holders, drug manufacturers, drug distributors, non-clinical drug safety evaluation research institutions, and drug clinical trial institutions regarding their compliance with the Good Manufacturing Practice for Drugs, the Good Supply Practice for Drugs, the Good Laboratory Practice for Non-clinical Drug Research, and the Good Clinical Practice for Drug Trials, and supervise their continuous adherence to statutory requirements.

Article 104 The State shall establish a professional and specialized team of drug inspectors. Inspectors shall be familiar with laws and regulations on drugs and possess professional knowledge of drugs.

Article 105 The drug regulatory department shall establish credit files on drug safety for drug marketing authorization holders, drug manufacturers, drug distributors, non-clinical safety evaluation research institutions, drug clinical trial institutions, and medical institutions. These files shall record information such as license issuance, results of routine supervision and inspections, and handling of illegal activities, and shall be disclosed to the public in accordance with the law and updated in a timely manner. For entities with adverse credit records, the frequency of supervision and inspections shall be increased, and joint disciplinary actions may be implemented in accordance with state regulations.

Article 106 The drug regulatory department shall publish its email address and telephone number to accept inquiries, complaints, and reports, and shall respond, verify, and handle them in a timely manner in accordance with the law. Rewards shall be granted to informants whose reports are verified as true, in accordance with relevant regulations.

Drug regulatory authorities shall keep the informant’s information confidential and safeguard the informant’s legitimate rights and interests. Where an informant reports violations committed by their employer, the employer shall not retaliate against the informant by terminating or modifying the labor contract, or by any other means.

Article 107 The State shall implement a system for the unified release of drug safety information. The overall status of national drug safety, drug safety risk warnings, major drug safety incidents and their investigation and handling information, as well as other information determined by the State Council to require unified release, shall be uniformly released by the drug regulatory department under the State Council. Where the impact of drug safety risk warnings and information on major drug safety incidents and their investigation and handling is confined to specific regions, such information may also be released by the drug regulatory departments of the people’s governments of the relevant provinces, autonomous regions, or municipalities directly under the Central Government. No entity or individual may release the aforementioned information without authorization.

The release of drug safety information shall be timely, accurate, and comprehensive, accompanied by necessary explanations to avoid misleading the public.

No entity or individual may fabricate or disseminate false drug safety information.

Article 108 People’s governments at or above the county level shall formulate emergency response plans for drug safety incidents. Marketing authorization holders, drug manufacturers, drug distributors, and medical institutions shall develop their own plans for handling drug safety incidents, and organize training and emergency drills.

In the event of a drug safety incident, people's governments at or above the county level shall immediately organize and carry out response efforts in accordance with emergency contingency plans; relevant entities shall immediately take effective measures to handle the situation and prevent the escalation of harm.

Article 109 Where the drug regulatory department fails to promptly identify systemic risks to drug safety or fails to timely eliminate hidden dangers to drug safety within its area of supervision and administration, the people's government at the corresponding level or the drug regulatory department of the people's government at the next higher level shall conduct a regulatory interview with its principal responsible person.

Where a local people’s government fails to fulfill its drug safety responsibilities or fails to promptly eliminate major regional drug safety hazards, the people’s government at the next higher level or the drug regulatory department of the people’s government at the next higher level shall conduct regulatory interviews with its principal responsible persons.

The departments and local people's governments subject to regulatory interviews shall immediately take measures to rectify their drug supervision and administration work.

The details of regulatory interviews and rectification measures shall be incorporated into the evaluation and assessment records of drug supervision and administration work conducted by relevant departments and local people's governments.

Article 110 Local people's governments and their drug regulatory departments shall not restrict or exclude drugs manufactured by drug marketing authorization holders or drug manufacturing enterprises from other regions from entering their respective regions by means such as requiring drug testing or approval.

Article 111 The drug regulatory department and the drug-related professional technical institutions established or designated by it shall not engage in drug production or business activities, nor shall they recommend, supervise the manufacture of, or supervise the sale of drugs in their own name.

Staff members of drug regulatory authorities and their affiliated or designated professional technical institutions for drugs shall not engage in drug production and business activities.

Article 112 Where the State Council has other special administrative provisions for narcotic drugs, psychotropic substances, medicinal toxic drugs, radioactive pharmaceuticals, and drug-related precursor chemicals, such provisions shall apply.

Article 113 Where the drug regulatory department discovers that a drug-related violation is suspected of constituting a crime, it shall promptly transfer the case to the public security organ.

Where criminal liability is not pursued in accordance with the law or criminal punishment is exempted, but administrative liability should be pursued, the public security organs, people’s procuratorates, and people’s courts shall promptly transfer the case to the drug regulatory department.

Where public security organs, people’s procuratorates, or people’s courts request assistance from drug supervision and administration departments, ecological environment competent departments, and other relevant departments in providing inspection conclusions, expert opinions, and harmless disposal of drugs involved in the case, the relevant departments shall provide such assistance in a timely manner.

Article 114 Where a violation of the provisions of this Law constitutes a crime, criminal liability shall be investigated in accordance with the law.

Article 115 Where drugs are produced or sold without a Drug Production License, Drug Operation License, or Medical Institution Preparation License, the entity shall be ordered to close down, the illegally produced or sold drugs and illegal gains shall be confiscated, and a fine of not less than fifteen times but not more than thirty times the value of the illegally produced or sold drugs (including both sold and unsold drugs, as hereinafter referred to) shall be imposed; if the value is less than RMB 100,000, it shall be calculated as RMB 100,000.

Article 116 Where counterfeit drugs are produced or sold, the illegally produced or sold drugs and the illegal gains therefrom shall be confiscated; an order shall be issued to suspend production and business operations for rectification; the 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 illegally produced or sold drugs shall be imposed. If the value is less than RMB 100,000, it shall be calculated as RMB 100,000. In serious circumstances, the Drug Production License, Drug Operation License, or Medical Institution Preparation License shall be revoked, and no corresponding applications shall be accepted within ten years. Where the drug marketing authorization holder is an overseas enterprise, the importation of its drugs shall be prohibited for ten years.

Article 117 Where inferior drugs are produced or sold, the illegally produced or sold drugs and the illegal gains shall be confiscated, and a fine of not less than ten times but not more than twenty times the value of the illegally produced or sold drugs shall be imposed; where the value of the illegally produced or wholesaled drugs is less than RMB 100,000, it shall be calculated as RMB 100,000, and where the value of the illegally retailed drugs is less than RMB 10,000, it shall be calculated as RMB 10,000; if the circumstances are serious, an order shall be issued to suspend production or business operations for rectification, up to the revocation of drug approval documents, Drug Production License, Drug Operation License, or Medical Institution Preparation License.

Where the production or sale of processed traditional Chinese medicinal decoction pieces fails to comply with drug standards but does not yet affect safety or efficacy, an order shall be issued to rectify the violation within a specified time limit and a warning shall be given; a fine of not less than RMB 100,000 but not more than RMB 500,000 may also be imposed.

Article 118 Where counterfeit drugs are produced or sold, or substandard drugs are produced or sold under serious circumstances, the legal representative, principal person in charge, directly responsible supervisor, and other liable persons shall have their income derived from the entity during the period of the illegal act confiscated, and shall be fined not less than 30% but not more than three times such income; they shall be permanently prohibited from engaging in drug production and operation activities, and may be subject to administrative detention of not less than five days but not more than fifteen days by the public security organs.

Confiscate raw materials, excipients, packaging materials, and production equipment that are specifically used by manufacturers for the production of counterfeit or substandard drugs.

Article 119 Where a drug-using entity uses counterfeit or substandard drugs, it shall be penalized in accordance with the provisions governing the sale of counterfeit drugs and the retail of substandard drugs; if the circumstances are serious, the legal representative, principal person in charge, directly responsible supervisor, and other liable persons who hold medical and health professional practice certificates shall also have their practice certificates revoked.

Article 120 Where a person knows or should have known that the drugs in question are counterfeit drugs, inferior drugs, or those specified in Items 1 through 5 of Paragraph 1 of Article 124 of this Law, and yet provides facilitating conditions such as storage and transportation for such drugs, all income derived from 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; if the circumstances are serious, a fine of not less than five times but not more than fifteen times the illegal income shall be imposed; where the illegal income is less than RMB 50,000, it shall be calculated as RMB 50,000.

Article 121 The decision on administrative penalties for counterfeit drugs and inferior drugs shall, in accordance with the law, specify the quality inspection conclusions issued by drug testing institutions.

Article 122 Where a drug manufacturing license, drug distribution license, medical institution preparation license, or drug approval document is forged, altered, leased, lent, or illegally bought or sold, the illegal gains shall be confiscated, and a fine of not less than one time but not more than five times the illegal gains shall be imposed; where the circumstances are serious, a fine of not less than five times but not more than fifteen times the illegal gains shall be imposed, the drug manufacturing license, drug distribution license, medical institution preparation license, or drug approval document shall be revoked, and the legal representative, principal person in charge, directly responsible supervisor, and other liable persons shall be fined not less than RMB 20,000 but not more than RMB 200,000, prohibited from engaging in drug production and operation activities for ten years, and may be detained by the public security organ for not less than five days but not more than fifteen days; where the illegal gains are less than RMB 100,000, they shall be calculated as RMB 100,000.

Article 123 Where false certificates, data, materials, or samples are provided, or other means are adopted to fraudulently obtain approvals for clinical trials, drug production, drug distribution, preparation of medical institution formulations, drug registration, or other related licenses, such approvals shall be revoked, no corresponding applications shall be accepted within ten years, and a fine of not less than RMB 500,000 but not more than RMB 5 million shall be imposed; if the circumstances are serious, the legal representative, principal person in charge, directly responsible supervisor, and other liable persons shall be fined not less than RMB 20,000 but not more than RMB 200,000, prohibited from engaging in drug production and distribution activities for ten years, and may be subject to administrative detention of not less than five days but not more than fifteen days by the public security organs.

Article 124 Where any of the following acts is committed in violation of the provisions of this Law, the drugs illegally produced, imported, or sold, the illegal gains, and the raw materials, excipients, packaging materials, and production equipment specifically used for illegal production shall be confiscated; an order shall be issued to suspend production and business operations for rectification; and a fine of not less than fifteen times but not more than thirty times the value of the drugs illegally produced, imported, or sold shall be imposed; if the value is less than RMB 100,000, it shall be calculated as RMB 100,000; where the circumstances are serious, the drug approval documents shall be revoked, up to and including the revocation of the Drug Production License, Drug Operation License, or Medical Institution Preparation License; the income obtained by the legal representative, principal responsible person, directly responsible supervisor, and other liable persons from their entity during the period when the illegal act occurred shall be confiscated, and a fine of not less than 30% but not more than three times such income shall be imposed; they shall be prohibited from engaging in drug production and operation activities for ten years up to a lifetime; and public security organs may impose detention of not less than five days but not more than fifteen days.

(1) Producing or importing drugs without obtaining drug approval documents;

(2) Producing or importing drugs using drug approval documents obtained through fraudulent means;

(3) Producing drugs using active pharmaceutical ingredients that have not undergone review and approval;

(4) Selling drugs that should have been inspected but were not;

(5) Producing or selling drugs that are prohibited for use by the drug regulatory department under the State Council;

(6) Fabricating production and inspection records;

(7) Making major changes in the drug production process without approval.

Those who sell the drugs specified in Items 1 through 3 of the preceding paragraph, or drug-using entities that use the drugs specified in Items 1 through 5 of the preceding paragraph, shall be penalized in accordance with the provisions of the preceding paragraph; where the circumstances are serious, the legal representative, principal person in charge, directly responsible supervisor, and other liable personnel of the drug-using entity who hold medical and health professional practice certificates shall also have their practice certificates revoked.

Importing small quantities of drugs that are legally marketed overseas without approval may, in cases with minor circumstances, result in mitigated or exempted penalties in accordance with the law.

Article 125 Where, in violation of the provisions of this Law, any of the following acts is committed, the illegally produced or sold drugs, illegal gains, and packaging materials and containers shall be confiscated; an order shall be issued to suspend production and business operations for rectification; and a fine of not less than RMB 500,000 but not more than RMB 5 million shall be imposed. In serious circumstances, the drug approval documents, Drug Production License, and Drug Operation License shall be revoked; the legal representative, principal person in charge, directly responsible supervisor, and other liable persons shall be fined not less than RMB 20,000 but not more than RMB 200,000; and they shall be prohibited from engaging in drug production and operation activities for a period of ten years up to a lifetime.

(1) Conducting drug clinical trials without approval;

(2) Producing drugs using packaging materials or containers that directly contact the drugs and have not undergone review, or selling such drugs;

(3) Use of unapproved labels and package inserts.

Article 126 Unless otherwise provided in this Law, where a drug marketing authorization holder, drug manufacturer, drug distributor, institution conducting non-clinical safety evaluation of drugs, institution conducting clinical trials of drugs, or any other entity fails to comply with the Good Manufacturing Practice for Drugs, Good Supply Practice for Drugs, Good Laboratory Practice for Non-Clinical Research on Drugs, Good Clinical Practice for Drug Trials, etc., it shall be ordered to make corrections within a specified time limit and given a warning; if it fails to make corrections within the time limit, a fine of not less than RMB 100,000 but not more than RMB 500,000 shall be imposed; if the circumstances are serious, a fine of not less than RMB 500,000 but not more than RMB 2,000,000 shall be imposed, and it shall be ordered to suspend production or business operations for rectification, up to revocation of drug approval documents, Drug Manufacturing License, Drug Operation License, etc.; institutions conducting non-clinical safety evaluation of drugs and institutions conducting clinical trials of drugs shall be prohibited from engaging in non-clinical safety evaluation research and clinical trials of drugs for five years; and the legal representative, principal person in charge, directly responsible supervisor, and other liable persons shall have their income derived from the entity during the period when the illegal acts occurred confiscated, and shall be fined an amount equal to not less than 10% but not more than 50% of such income, and shall be banned from engaging in drug production, operation, and other related activities for ten years or even for life.

Article 127 Where any of the following acts is committed in violation of the provisions of this Law, an order shall be issued to make corrections within a specified time limit and a warning shall be given; if corrections are not made within the time limit, a fine of not less than RMB 100,000 but not more than RMB 500,000 shall be imposed:

(1) Failure to file for bioequivalence studies;

(2) During the conduct of drug clinical trials, if safety issues or other risks are identified, and the clinical trial sponsor fails to promptly adjust the clinical trial protocol, suspend or terminate the clinical trial, or report to the drug regulatory department under the State Council;

(3) Failure to establish and implement a drug traceability system in accordance with regulations;

(4) Failure to submit annual reports as required;

(5) Failure to file or report changes in the drug manufacturing process as required;

(6) Failure to establish a post-marketing risk management plan for the drug;

(7) Failure to conduct post-marketing studies or post-marketing evaluations of drugs in accordance with regulations.

Article 128 Where drug packaging fails to bear printed or affixed labels or include package inserts as required, or where the labels and package inserts fail to indicate relevant information or display prescribed marks as required, unless penalized in accordance with the law as counterfeit or substandard drugs, the entity shall be ordered to make corrections and given a warning; if the circumstances are serious, the drug registration certificate shall be revoked.

Article 129 Where, in violation of the provisions of this Law, a drug marketing authorization holder, drug manufacturer, drug distributor, or medical institution fails to purchase drugs from a drug marketing authorization holder or an enterprise qualified for drug production or distribution, it shall be ordered to make corrections, the illegally purchased drugs and illegal gains shall be confiscated, and a fine of not less than two times but not more than ten times the value of the illegally purchased drugs shall be imposed; if the circumstances are serious, a fine of not less than ten times but not more than thirty times the value shall be imposed, and the drug approval documents, Drug Production License, Drug Operation License, or Medical Institution Practice License shall be revoked; where the value is less than RMB 50,000, it shall be calculated as RMB 50,000.

Article 130 Where a drug trading enterprise, in violation of the provisions of this Law, fails to keep records of drug purchases and sales as required, fails to properly explain usage, dosage, and other matters for retail drugs, or fails to dispense prescriptions in accordance with regulations, it shall be ordered to make corrections and given a warning; if the circumstances are serious, its Drug Trading License shall be revoked.

Article 131 Where a provider of a third-party online platform for drug transactions fails to perform its obligations, such as verifying qualifications, reporting, and suspending the provision of online platform services, in violation of the provisions of this Law, it shall be ordered to make corrections, its illegal gains shall be confiscated, and it shall be fined not less than RMB 200,000 but not more than RMB 2 million; if the circumstances are serious, it shall be ordered to suspend business for rectification and be fined not less than RMB 2 million but not more than RMB 5 million.

Article 132 Where imported drugs for which drug registration certificates have been obtained fail to be filed with the drug regulatory department in the place where the port allowing drug imports is located, as required, the entity shall be ordered to make corrections within a specified time limit and given a warning; if corrections are not made within the time limit, the drug registration certificate shall be revoked.

Article 133 Where a medical institution, in violation of the provisions of this Law, sells preparations compounded by it on the market, it shall be ordered to make corrections, and the preparations illegally sold and the illegal gains therefrom shall be confiscated; furthermore, a fine of not less than two times but not more than five times the value of the illegally sold preparations shall be imposed. If the circumstances are serious, a fine of not less than five times but not more than fifteen times the value shall be imposed. If the value is less than RMB 50,000, it shall be calculated as RMB 50,000.

Article 134 Where a drug marketing authorization holder fails to conduct monitoring of adverse drug reactions or report suspected adverse drug reactions in accordance with regulations, it shall be ordered to make corrections within a specified time limit and given a warning; if it fails to make corrections within the time limit, it shall be ordered to suspend production and business operations for rectification, and imposed a fine of not less than RMB 100,000 but not more than RMB 1,000,000.

Where a drug distribution enterprise fails to report suspected adverse drug reactions in accordance with regulations, it shall be ordered to make corrections within a specified time limit and given a warning; if it fails to make corrections within the time limit, it shall be ordered to suspend production and business operations for rectification, and shall be fined not less than 50,000 yuan but not more than 500,000 yuan.

If a medical institution fails to report suspected adverse drug reactions in accordance with regulations, it shall be ordered to make corrections within a specified time limit and given a warning; if it fails to make corrections within the time limit, a fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed.

Article 135 Where a drug marketing authorization holder refuses to recall drugs after being ordered to do so by the drug regulatory department of the people's government of the province, autonomous region, or municipality directly under the Central Government, it shall be fined not less than five times but not more than ten times the value of the drugs subject to recall; if the value is less than RMB 100,000, it shall be calculated as RMB 100,000. In serious circumstances, the drug approval documents, Drug Production License, and Drug Operation License shall be revoked, and the legal representative, principal person in charge, directly responsible supervisor, and other liable persons shall be fined not less than RMB 20,000 but not more than RMB 200,000. Where drug manufacturing enterprises, drug trading enterprises, or medical institutions refuse to cooperate with the recall, they shall be fined not less than RMB 100,000 but not more than RMB 500,000.

Article 136 Where the marketing authorization holder for a drug is an overseas enterprise, and the corporate legal person it has designated within the territory of China fails to perform relevant obligations in accordance with the provisions of this Law, the provisions of this Law concerning the legal liabilities of marketing authorization holders for drugs shall apply.

Article 137 Any of the following acts shall be subject to heavier penalties within the scope of punishment prescribed by this Law:

(1) Passing off narcotic drugs, psychotropic substances, medicinal toxic drugs, radioactive pharmaceuticals, or drug precursor chemicals as other drugs, or passing off other drugs as the aforementioned substances;

(2) Producing or selling counterfeit or substandard drugs primarily intended for use by pregnant women, nursing mothers, and children;

(3) The biological products manufactured or sold are counterfeit or substandard drugs;

(4) Production and sale of counterfeit or substandard drugs, resulting in personal injury;

(5) Reoffending after having been penalized for the production or sale of counterfeit or substandard drugs;

(6) Refusing or evading supervision and inspection, forging, destroying, or concealing relevant evidentiary materials, or unauthorizedly using sealed or seized items.

Article 138 Where a drug testing institution issues a false inspection report, it shall be ordered to make corrections and given a warning; the institution shall also be fined 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 subject to administrative sanctions of demotion, dismissal from post, or expulsion in accordance with the law; their illegal gains shall be confiscated, and they shall also be fined not more than RMB 50,000. In serious circumstances, their qualification for inspection shall be revoked. Where the inspection results issued by a drug testing institution are inaccurate and cause losses, the institution shall bear corresponding liability for compensation.

Article 139 The administrative penalties stipulated in Articles 115 through 138 of this Law shall be decided by the drug regulatory departments of the people's governments at or above the county level in accordance with their respective division of duties; decisions on revocation of approvals and cancellation of licenses shall be made by the original approving and licensing authorities.

Article 140 Where a drug marketing authorization holder, drug manufacturer, drug distributor, or medical institution violates the provisions of this Law in recruiting personnel, the drug regulatory department or the health administrative department shall order the dismissal of such personnel and impose a fine of not less than RMB 50,000 but not more than RMB 200,000.

Article 141 Where a drug marketing authorization holder, drug manufacturer, drug distributor, or medical institution offers or accepts kickbacks or other improper benefits in the purchase and sale of drugs, or where a drug marketing authorization holder, drug manufacturer, drug distributor, or agent provides property or other improper benefits to the persons in charge, drug procurement personnel, physicians, pharmacists, and other relevant personnel of medical institutions that use their drugs, the market supervision and administration department shall confiscate the illegal gains and impose a fine of not less than RMB 300,000 but not more than RMB 3 million; if the circumstances are serious, the business licenses of the drug marketing authorization holder, drug manufacturer, and drug distributor shall be revoked, and the drug approval documents, Drug Manufacturing License, and Drug Operation License shall be revoked by the drug supervision and administration department.

Where drug marketing authorization holders, drug manufacturers, or drug distributors offer bribes to state functionaries in the course of drug research and development, production, or distribution, their legal representatives, principal responsible persons, directly responsible supervisors, and other liable personnel shall be permanently prohibited from engaging in drug production and business activities.

Article 142 Where the persons in charge, procurement personnel, and other relevant staff of drug marketing authorization holders, drug manufacturing enterprises, or drug distribution enterprises accept property or other improper benefits from other drug marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, or their agents in the course of drug purchase and sale, their illegal gains shall be confiscated, and they shall be subject to penalties in accordance with the law; where the circumstances are serious, they shall be prohibited from engaging in drug production and operation activities for five years.

Where persons responsible for medical institutions, drug procurement personnel, physicians, pharmacists, and other relevant personnel accept property or other improper benefits from drug marketing authorization holders, drug manufacturers, drug distributors, or their agents, the health authorities or their employing institutions shall impose disciplinary sanctions and confiscate illegal gains; in serious cases, their practice licenses shall also be revoked.

Article 143 Where, in violation of the provisions of this Law, any person fabricates or disseminates false information on drug safety, which constitutes an act violating public security administration, the public security organ shall impose administrative penalties for public security in accordance with the law.

Article 144 Where a drug marketing authorization holder, drug manufacturer, drug distributor, or medical institution violates the provisions of this Law and causes damage to drug users, it shall bear liability for compensation in accordance with the law.

Where harm is caused by drug quality issues, the victim may claim compensation from the drug marketing authorization holder or the drug manufacturer, and may also claim compensation from the drug distributor or medical institution. The party receiving the victim’s claim for compensation shall implement the system of primary liability and make advance payment; after making such advance payment, it may seek recourse in accordance with the law.

Where counterfeit or substandard drugs are produced, or sold or used with knowledge that they are counterfeit or substandard, the victim or their close relatives may, in addition to claiming compensation for losses, demand punitive damages equal to ten times the purchase price or three times the losses incurred; if the additional compensation amounts to less than RMB 1,000, it shall be RMB 1,000.

Article 145 Where a drug regulatory authority or any drug-related professional technical institution established or designated by it engages in drug production or business activities, its superior competent authority shall order it to make corrections and confiscate the illegal income; if the circumstances are serious, sanctions shall be imposed in accordance with the law on the persons directly in charge and other directly liable persons.

Where staff members of the drug regulatory authorities or their established or designated professional technical institutions for drugs participate in drug production and business operations, disciplinary sanctions shall be imposed in accordance with the law.

Article 146 Where the drug regulatory department or the drug testing institutions established or designated by it illegally collect inspection fees during drug supervision and inspection, the relevant government departments shall order the refund of such fees, and administrative sanctions shall be imposed on the persons directly in charge and other directly responsible persons in accordance with the law; if the circumstances are serious, their qualification for conducting inspections shall be revoked.

Article 147 Where the drug regulatory department commits any of the following acts in violation of the provisions of this Law, the relevant permits shall be revoked, and administrative sanctions shall be imposed on the persons directly in charge and other directly responsible persons in accordance with the law:

(1) Approving the conduct of clinical drug trials despite failure to meet the required conditions;

(2) Issuing drug registration certificates to drugs that do not meet the requirements;

(3) Issuing Drug Manufacturing Licenses, Drug Operation Licenses, or Medical Institution Preparation Licenses to entities that do not meet the required conditions.

Article 148 Where a local 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 a major demerit; if the circumstances are serious, they shall be given a sanction of demotion, dismissal from post, or expulsion:

(1) Concealing, falsifying, delaying, or omitting reports on drug safety incidents;

(II) Failure to promptly eliminate major regional drug safety hazards, resulting in the occurrence of particularly major drug safety incidents within the administrative jurisdiction, or consecutive occurrences of major drug safety incidents;

(3) Ineffective performance of duties, resulting in serious adverse impact or significant losses.

Article 149 Where the drug regulatory department or any other relevant department violates the provisions of this Law by committing any of the following acts, the persons directly in charge and other directly responsible persons shall be given a demerit or a major demerit; if the circumstances are relatively serious, they shall be demoted or dismissed from their posts; if the circumstances are serious, they shall be expelled:

(1) Concealing, falsifying, delaying, or omitting reports of drug safety incidents;

(2) Failure to promptly investigate and deal with discovered illegal acts related to drug safety;

(3) Failure to timely identify systemic risks in drug safety, or failure to promptly eliminate drug safety hazards within the supervised area, resulting in serious consequences;

(4) Other failures to fulfill drug supervision and administration responsibilities, resulting in serious adverse impacts or significant losses.

Article 150 Where drug supervision and administration personnel abuse their powers, engage in malpractice for personal gain, or neglect their duties, they shall be subject to disciplinary sanctions in accordance with the law.

Where there is dereliction of duty or neglect of duty in the investigation and handling of illegal activities involving counterfeit and substandard drugs, the persons directly in charge and other directly responsible personnel of the drug supervision and administration department shall be given heavier disciplinary sanctions in accordance with the law.

Article 151 The value of goods stipulated in this Chapter shall be calculated based on the marked price of the drugs produced or sold in violation of the law; if there is no marked price, it shall be calculated based on the market price of similar drugs.

Article 152 The administration of the cultivation, collection, and breeding of Chinese crude drugs shall be conducted in accordance with the provisions of relevant laws and regulations.

Article 153 The administrative measures for regionally used traditional medicinal materials shall be formulated by the drug regulatory department under the State Council in conjunction with the competent department of traditional Chinese medicine under the State Council.

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

Article 155 This Law shall come into force as of December 1, 2019.

Source: The National People's Congress of China Website