China Fully Liberalizes TCM Clinic Establishment with Simplified Filing Process, Company Submits IPO Prospectus

VCBeat (WeChat: vcbeat) reports. The state is determined to carry through the reform of streamlining administration and delegating power to the fullest extent, with this round targeting China’s national essence—Traditional Chinese Medicine (TCM).

Recently, the National Administration of Traditional Chinese Medicine released two documents for public comment—the “Interim Measures for the Filing and Registration of TCM Clinics” and the “Interim Measures for the Examination and Registration Management of Physicians with Demonstrated Expertise in Traditional Chinese Medicine”—providing specific details on the transition of TCM clinic oversight from an approval-based system to a filing-based system.

In fact, the shift from an approval-based system to a filing-based system for establishing TCM clinics was mentioned last year. In December last year, the "Law on Traditional Chinese Medicine" was reviewed and approved at the 25th session of the Standing Committee of the National People's Congress, with relevant content addressed in the chapter on TCM services.

The Law on Traditional Chinese Medicine describes the establishment of TCM clinics as follows:

Those establishing a traditional Chinese medicine clinic shall report the clinic’s name, address, scope of diagnosis and treatment, staffing arrangements, and other relevant information to the local county-level people’s government department responsible for traditional Chinese medicine.Practice activities may commence upon completion of filing.。

The rationale behind this regulation is that TCM clinics primarily rely on the four diagnostic methods—inspection, auscultation and olfaction, inquiry, and palpation—offering simplified services that do not require the diverse array of testing equipment and instruments typical of Western medicine; therefore, the licensing requirements for establishing such clinics should be correspondingly more flexible.

However, the *Law on Traditional Chinese Medicine* does not specify detailed implementation rules; instead, it stipulates that “specific measures shall be drafted by the competent department of traditional Chinese medicine under the State Council and submitted to the health administrative department of the State Council for review and promulgation.”

The Interim Measures for the Filing of Traditional Chinese Medicine Clinics further stipulate, on the basis of previous regulations, that “the establishment of traditional Chinese medicine clinics shall not be subject to the provisions of the local Plan for the Establishment of Medical Institutions.”Limitations on the Number of Healthcare Institutions and Their Proximity。”

This means that the number and density of traditional Chinese medicine (TCM) clinics are not restricted; any entity with the requisite capability may apply for record-filing to establish a TCM clinic.

To establish a traditional Chinese medicine clinic, the following basic conditions shall be met:

(I) Individuals establishing a TCM clinic shall hold a Physician Qualification Certificate in the category of Traditional Chinese Medicine and be registered with a medical, preventive, or healthcare institution.5+ Years of Practice, or hold the “Qualification Certificate for Traditional Chinese Medicine Practitioners through Apprenticeship and Demonstrated Expertise (Provisional Name)”;

Where a legal entity establishes a traditional Chinese medicine (TCM) clinic, its person in charge shall meet the aforementioned conditions.

(II) Possessing an appropriate name and premises that meet the Basic Standards for Traditional Chinese Medicine Clinics (2017 Edition)

The TCM Physician Qualification Certificate is easy to understand, “Certificate of Qualification for Traditional Chinese Medicine Practitioners through Apprenticeship and Demonstrated ExpertiseThis is precisely the purpose behind the issuance of another document, the “Interim Measures for the Administration of Examination and Registration of Physicians with Demonstrated Expertise in Traditional Chinese Medicine.”

Regarding “Qualifications for Traditional Chinese Medicine Apprenticeship and Demonstrated Expertise,” it is described as follows:

(Apprenticeship Personnel) Individuals with specialized expertise in Traditional Chinese Medicine (TCM) who have studied through apprenticeship shall possess a high school diploma or equivalent educational level and have continuously apprenticed under a mentor.Five Years of Study in Traditional Chinese Medicine，Mastering Unique, Safe, and Effective Traditional Chinese Medicine Diagnostic and Therapeutic Techniques, upon being assessed as qualified by the supervising instructor, and recommended by at least two licensed practitioners of Traditional Chinese Medicine within the province (autonomous region, or municipality) where they are located (excluding the supervising instructor).

(Practitioners with Years of Practice) TCM practitioners with proven expertise acquired through years of practice must simultaneously meet several conditions, includingHigh school education or equivalent, lineage in traditional Chinese medicine, certification from the neighborhood or village committee, and recommendation by at least two licensed TCM practitioners within the jurisdiction.。

Both categories of personnel are required to participate in the qualification examination for physicians with demonstrated expertise in traditional Chinese medicine (TCM) techniques, which is organized and implemented by the TCM administrative department of the provincial-level people's government within their respective jurisdictions. The examination categories include:Internal MedicationandExternal Treatment TechniquesTwo categories; upon passing the assessment, one mayApplication for Registration。

The Law on Traditional Chinese Medicine will officially come into force on July 1 of this year. Barring any unforeseen circumstances, the implementation guidelines for these two “new regulations” will take effect simultaneously. This means that TCM clinics will rapidly proliferate across China; however, opinions remain divided regarding the development of traditional Chinese medicine.

Some view this as a positive signal of the government’s efforts to streamline administration and delegate power, indicating that deregulating approval processes does not equate to abandoning oversight.Lenient Entry, Strict Exit, the standardization of traditional Chinese medicine clinics is just around the corner.

Some argue that traditional Chinese medicine (TCM) has been progressing toward standardization and modernization, seeking to shed the label of “empirical formulas.” With the recent relaxation of approval requirements, all previous efforts have been rendered futile. Moreover, the newly introduced assessment for practitioners with proven expertise in specific TCM techniques leaves ample room for human manipulation in its procedural design.Unfair and Unobjective, failing to meet the standards for physician assessment yet performing the same diagnosis and treatment as those who have passed the assessment poses significant risks to patients.

Another perspective holds that Traditional Chinese Medicine (TCM) should focus more on health preservation, while diagnosis and treatment should be conducted at major hospitals. For such TCM clinics, the primary role of Chinese herbal medicine is not to cure diseases, but rather to provide regulation and preventive care.It is understandable to have slightly lower standards.。

The commentary also pointed out that previously “Barefoot Doctor”、“"Ancestral Traditional Chinese Medicine Practitioner"“Such phenomena must become a thing of the past; we should no longer see elderly practitioners in their seventies or eighties still rote-memorizing key points for the Licensed Physician Examination. This approach can also effectively enhance the influence and sustainability of Traditional Chinese Medicine (TCM), ensuring that this national essence does not vanish.”

However, what is certain is that Chinese herbal medicine slices may benefit from this round of reforms, as the most direct incremental stimulus brought by the increase in TCM clinics isChinese Herbal Pieces。

Since the beginning of this year, a series of pharmaceutical-related policies have been released, including the cancellation of audits for B and C licenses in pharmaceutical e-commerce, accelerated approval of imported drugs, separation of prescribing from dispensing, and the removal of approval requirements for traditional Chinese medicine clinics, making it a “major year for policy.” Overall, the purpose of these policies is clear: to regulate the pharmaceutical and healthcare industries through various means and meet residents’Diversified and Personalized Diagnosis and Treatment Needs, the effectiveness of such reforms is worth anticipating.