Drug Administration Law of the People's Republic of China (2019 Revision).

Promulgated by: Standing Committee of the National People’s Congress.
Document No.: Presidential Order No. 31.
Adopted at the 7th Session of the Standing Committee of the 6th National People’s Congress on September 20, 1984; first revised at the 20th Session of the Standing Committee of the 9th National People’s Congress on February 28, 2001; first amended in accordance with the Decision on Amending Seven Laws Including the Marine Environment Protection Law of the People’s Republic of China adopted at the 6th Session of the Standing Committee of the 12th National People’s Congress on December 28, 2013; second amended in accordance with the Decision on Amending the Drug Administration Law of the People’s Republic of China adopted at the 14th Session of the Standing Committee of the 12th National People’s Congress on April 24, 2015; second revised at the 12th Session of the Standing Committee of the 13th National People’s Congress on August 26, 2019.
Effective December 1, 2019.

Chapter 1 General Provisions

Article 1. This Law is formulated in order to strengthen drug administration, ensure drug quality, safeguard the safety of drug use and the lawful rights and interests of the public, and protect and promote public health.

Article 2. This Law shall apply to the research, manufacture, distribution, use of drugs, and the supervision and administration thereof within the territory of the People’s Republic of China.

For the purposes of this Law, “drug” means a substance used for the prevention, treatment, or diagnosis of human diseases, intended to purposefully regulate human physiological functions, and prescribed with indications or functions and major uses, usage, and dosage, including Chinese medicine, chemical drugs, and biological products, among others.

Article 3. Drug administration shall be centered on people’s health, adhere to the principles of risk management, whole-process control, and joint social governance, establish a scientific and strict supervision and administration system, comprehensively improve drug quality, and ensure the safety, efficacy, and accessibility of drugs.

Article 4. The State shall develop modern medicine and traditional medicine and give full play to their roles in prevention, medical treatment, and health care.

The State shall protect wild medicinal-material resources and varieties of Chinese medicine, and encourage the cultivation of authentic, region-specific (daodi) Chinese medicinal materials.

Article 5. The State shall encourage the research and creation of new drugs, and protect the lawful rights and interests of citizens, legal persons, and other organizations in researching and developing new drugs.

Article 6. The State shall implement a marketing authorization holder (MAH) system for drug administration. The marketing authorization holder shall, in accordance with the law, be responsible for the safety, efficacy, and quality controllability of a drug throughout the entire process of the drug’s research, manufacture, distribution, and use.

Article 7. Those engaged in the research, manufacture, distribution, and use of drugs shall comply with laws, regulations, rules, standards, and norms, and ensure that information for the entire process is true, accurate, complete, and traceable.

Article 8. The drug regulatory authority under the State Council shall take charge of nationwide drug supervision and administration. The relevant departments under the State Council shall, within their respective scopes of responsibility, be responsible for the supervision and administration of matters relating to drugs. The drug regulatory authority under the State Council shall cooperate with the relevant departments under the State Council in implementing the State’s drug-industry development plans and industrial policies.

The drug regulatory authorities 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 regions. The departments of districted-city-level and county-level people’s governments that undertake drug supervision and administration responsibilities (hereinafter referred to as drug regulatory authorities) shall be responsible for drug supervision and administration within their respective administrative regions. The relevant departments of local people’s governments at or above the county level shall, within their respective scopes of responsibility, be responsible for the supervision and administration of matters relating to drugs.

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

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

Article 11. The specialized drug technical institutions established or designated by drug regulatory authorities shall undertake the review, inspection, verification, monitoring and evaluation, and other work required for the implementation of drug supervision and administration in accordance with the law.

Article 12. The State shall establish and improve a drug traceability system. The drug regulatory authority under the State Council shall formulate unified drug traceability standards and norms, advance the interconnection and sharing of drug traceability information, and achieve drug traceability.

The State shall establish a pharmacovigilance system to monitor, identify, assess, and control adverse drug reactions and other harmful reactions related to drug use.

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

The news media shall conduct public-interest publicity of knowledge of drug-safety laws and regulations and other matters, and exercise public-opinion supervision over drug-related illegal acts. Publicity and reporting concerning drugs shall be comprehensive, scientific, objective, and fair.

Article 14. Drug industry associations shall strengthen industry self-discipline, establish and improve industry norms, advance the building of an industry integrity system, and guide and urge members to carry out drug manufacture, distribution, 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 the relevant provisions of the State, commend and reward entities and individuals that have made outstanding contributions in the research, manufacture, distribution, use, and supervision and administration of drugs.

Chapter 2 Drug Research and Registration

Article 16. The State shall support drug innovation that is oriented toward clinical value and has clear or special efficacy against human diseases, shall encourage the research and development of new drugs that have new treatment mechanisms, treat diseases that seriously endanger life or rare diseases, or have multi-target systemic regulatory and intervention functions on the human body, and shall promote the technological progress of drugs.

The State shall encourage the use of modern science and technology and traditional Chinese-medicine research methods to carry out scientific and technological research and drug development of Chinese medicine, establish and improve a technical evaluation system that conforms to the characteristics of Chinese medicine, and promote the inheritance and innovation of Chinese medicine.

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

Article 17. Those engaged in drug research activities shall comply with the Good Laboratory Practice for Non-clinical Drug Studies and the Good Clinical Practice for Drugs, and ensure that the entire process of drug research continuously conforms to statutory requirements.

The Good Laboratory Practice for Non-clinical Drug Studies and the Good Clinical Practice for Drugs shall be formulated by the drug regulatory authority under the State Council jointly with the relevant departments under the State Council.

Article 18. Those carrying out non-clinical drug studies shall comply with the relevant provisions of the State, have personnel, premises, equipment, instruments, and management systems suitable for the research project, and ensure the authenticity of the relevant data, materials, and samples.

Article 19. Those carrying out drug clinical trials shall, in accordance with the provisions of the drug regulatory authority under the State Council, truthfully submit relevant data, materials, and samples such as the research methods, quality indicators, and the results of pharmacological and toxicological tests, and obtain the approval of the drug regulatory authority under the State Council. The drug regulatory authority under the State Council shall, within sixty working days from the date of acceptance of a clinical-trial application, decide whether to grant approval and notify the clinical-trial sponsor; where no notification is given upon the expiration of the time limit, approval shall be deemed to have been granted. Where a bioequivalence trial is to be conducted, a filing shall be made with the drug regulatory authority under the State Council.

Drug clinical trials shall be carried out at clinical-trial institutions that possess the corresponding conditions. Drug clinical-trial institutions shall be subject to filing administration, and the specific measures shall be jointly formulated by the drug regulatory authority under the State Council and the health authority under the State Council.

Article 20. Those carrying out drug clinical trials shall comply with ethical principles, formulate a clinical-trial protocol, and obtain the review and approval of an ethics committee.

The ethics committee shall establish an ethical-review work system, ensure that the ethical-review process is independent, objective, and fair, supervise the standardized conduct of drug clinical trials, safeguard the lawful rights and interests of subjects, and protect the public interest of society.

Article 21. When conducting a drug clinical trial, the subject or the subject’s guardian shall be truthfully informed and given an explanation of the purpose and risks of the clinical trial and other detailed matters, an informed-consent form voluntarily signed by the subject or the subject’s guardian shall be obtained, and effective measures shall be taken to protect the lawful rights and interests of the subject.

Article 22. During a drug clinical trial, where a safety problem or other risk is discovered, the clinical-trial sponsor shall promptly adjust the clinical-trial protocol, suspend or terminate the clinical trial, and report to the drug regulatory authority under the State Council. Where necessary, the drug regulatory authority under the State Council may order the adjustment of the clinical-trial protocol or the suspension or termination of the clinical trial.

Article 23. Where a drug undergoing a clinical trial is used to treat a disease that seriously endangers life and for which there is as yet no effective means of treatment, and medical observation indicates that benefit may be obtained and ethical principles are met, such drug may, upon review and informed consent, be used at the institution conducting the clinical trial for other patients with the same condition.

Article 24. Drugs to be marketed within the territory of China shall be approved by the drug regulatory authority under the State Council and obtain a drug registration certificate; however, this shall not apply to Chinese medicinal materials and prepared slices of Chinese crude drugs that are not subject to approval administration. The catalogue of varieties of Chinese medicinal materials and prepared slices of Chinese crude drugs subject to approval administration shall be formulated by the drug regulatory authority under the State Council jointly with the traditional Chinese medicine authority under the State Council.

An application for drug registration shall provide true, sufficient, and reliable data, materials, and samples to prove the safety, efficacy, and quality controllability of the drug.

Article 25. For a drug applied for registration, the drug regulatory authority under the State Council shall organize pharmaceutical, medical, and other technical personnel to conduct a review, examining the safety, efficacy, and quality controllability of the drug as well as the applicant’s capabilities for quality management, risk prevention and control, and liability compensation; where the conditions are met, a drug registration certificate shall be issued.

When approving a drug, the drug regulatory authority under the State Council shall review and approve the chemical active pharmaceutical ingredient together with the drug, review the relevant excipients and the packaging materials and containers in direct contact with the drug together with the drug, and verify the quality standards, manufacturing processes, labels, and package inserts of the drug together with the drug.

For the purposes of this Law, “excipients” means the shaping agents and additives used in the manufacture of drugs and the dispensing of prescriptions.

Article 26. For drugs used to treat diseases that seriously endanger life and for which there is as yet no effective means of treatment, as well as drugs urgently needed for public health, where existing data from drug clinical trials show efficacy and can predict their clinical value, conditional approval may be granted, and the relevant matters shall be stated in the drug registration certificate.

Article 27. The drug regulatory authority under the State Council shall improve the drug review and approval work system, strengthen capacity building, establish and improve mechanisms for communication and exchange and expert consultation, optimize the review and approval process, and improve the efficiency of review and approval.

The review conclusions and bases for drugs approved for marketing shall be made public in accordance with the law and subject to social supervision. Trade secrets learned of during review and approval shall be kept confidential.

Article 28. Drugs shall conform to national drug standards. Where the drug quality standards verified by the drug regulatory authority under the State Council are higher than the national drug standards, the verified drug quality standards shall be applied; where there are no national drug standards, the verified drug quality standards shall be conformed to.

The Pharmacopoeia of the People’s Republic of China and the drug standards promulgated by the drug regulatory authority under the State Council shall be the national drug standards.

The drug regulatory authority under the State Council shall, jointly with the health authority under the State Council, organize a pharmacopoeia commission to be responsible for the formulation and revision of national drug standards.

The drug inspection institutions established or designated by the drug regulatory authority under the State Council shall be responsible for calibrating national drug reference standards and reference substances.

Article 29. The name of a drug listed in the national drug standards shall be the generic name of the drug. A name that has already been used as a generic name of a drug shall not be used as a drug trademark.

Chapter 3 Marketing Authorization Holders

Article 30. A marketing authorization holder means an enterprise or drug research institution, among others, that has obtained a drug registration certificate.

A marketing authorization holder shall, in accordance with the provisions of this Law, bear responsibility for the non-clinical study, clinical trial, manufacture and distribution, post-marketing study, and adverse-reaction monitoring as well as the reporting and handling thereof, of the drug. Other entities and individuals engaged in the research, manufacture, distribution, storage, transportation, and use of drugs shall bear corresponding responsibilities in accordance with the law.

The legal representative and principal responsible person of a marketing authorization holder shall bear overall responsibility for drug quality.

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

A marketing authorization holder shall conduct regular reviews of the quality management systems of the entrusted drug manufacturing enterprises and drug distribution enterprises, and supervise their continuous possession of quality assurance and control capabilities.

Article 32. A marketing authorization holder may manufacture drugs by itself or may entrust the manufacture to a drug manufacturing enterprise.

Where a marketing authorization holder manufactures drugs by itself, it shall obtain a drug manufacturing license in accordance with the provisions of this Law; where it entrusts the manufacture, it shall entrust a qualified drug manufacturing enterprise. The marketing authorization holder and the entrusted manufacturing enterprise shall conclude an entrustment agreement and a quality agreement, and strictly perform the obligations stipulated in the agreements.

The drug regulatory authority under the State Council shall formulate guidelines for drug entrusted-manufacture quality agreements to guide and supervise the marketing authorization holder and the entrusted manufacturing enterprise in performing their drug quality assurance obligations.

Blood products, narcotic drugs, psychotropic drugs, toxic drugs for medical use, and drug-category precursor chemicals shall not be manufactured under entrustment; except as otherwise provided by the drug regulatory authority under the State Council.

Article 33. A marketing authorization holder shall establish drug marketing-release procedures, review the drugs released from the factory by the drug manufacturing enterprise, and release them only after they are signed off by the qualified person for quality. Drugs that do not conform to the national drug standards shall not be released.

Article 34. A marketing authorization holder may sell by itself the drugs for which it has obtained a drug registration certificate, or may entrust a drug distribution enterprise to sell them. A marketing authorization holder that engages in drug retail activities shall obtain a drug distribution license.

Where a marketing authorization holder sells drugs by itself, it shall possess the conditions prescribed in Article 52 of this Law; where it entrusts the sale, it shall entrust a qualified drug distribution enterprise. The marketing authorization holder and the entrusted distribution enterprise shall conclude an entrustment agreement and strictly perform the obligations stipulated in the agreement.

Article 35. Where a marketing authorization holder, drug manufacturing enterprise, or drug distribution enterprise entrusts the storage or transportation of drugs, it shall assess the quality-assurance capability and risk-management capability of the entrusted party, conclude an entrustment agreement with it stipulating the drug quality responsibilities, operating procedures, and other contents, and supervise the entrusted party.

Article 36. Marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall establish and implement a drug traceability system, provide traceability information in accordance with the provisions, and ensure drug traceability.

Article 37. A marketing authorization holder shall establish an annual reporting system and shall, each year, report to the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government, in accordance with the provisions, on the manufacture and sales, post-marketing study, risk management, and other circumstances of its drugs.

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

Article 39. Enterprises manufacturing prepared slices of Chinese crude drugs shall perform the relevant obligations of a marketing authorization holder, implement whole-process management of the manufacture and sale of prepared slices of Chinese crude drugs, establish a traceability system for prepared slices of Chinese crude drugs, and ensure that prepared slices of Chinese crude drugs are safe, effective, and traceable.

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

Chapter 4 Drug Manufacture

Article 41. Those engaged in drug manufacturing activities shall be approved by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government in their locality and obtain a drug manufacturing license. Without a drug manufacturing license, no drug shall be manufactured.

A drug manufacturing license shall indicate its valid period and manufacturing scope, and shall be re-examined and reissued upon expiration.

Article 42. Those engaged in drug manufacturing activities shall possess the following conditions:

(1) having pharmaceutical technical personnel, engineering technical personnel, and corresponding skilled technical workers who have been qualified in accordance with the law;

(2) having factory premises, facilities, and a sanitary environment suitable for drug manufacture;

(3) having an institution, personnel, and necessary instruments and equipment capable of quality management and quality inspection of the drugs manufactured; and

(4) having rules and regulations to ensure drug quality, and conforming to the requirements of the Good Manufacturing Practice for Drugs formulated by the drug regulatory authority under the State Council pursuant to this Law.

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

The legal representative and principal responsible person of a drug manufacturing enterprise shall bear overall responsibility 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 verified by the drug regulatory authority. Manufacturing and inspection records shall be complete and accurate and shall not be fabricated.

Prepared slices of Chinese crude drugs shall be processed in accordance with the national drug standards; where the national drug standards do not so provide, they shall be processed in accordance with the processing norms formulated by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government. The processing norms formulated by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government shall be filed with the drug regulatory authority under the State Council. Those that do not conform to the national drug standards, or that are not processed in accordance with the processing norms formulated by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government, shall not be released from the factory or sold.

Article 45. The raw materials and excipients required for manufacturing drugs shall conform to pharmaceutical requirements and the relevant requirements of the Good Manufacturing Practice for Drugs.

When manufacturing drugs, the suppliers of raw materials, excipients, and the like shall be reviewed in accordance with the provisions, so as to ensure that the raw materials, excipients, and the like purchased and used conform to the requirements prescribed in the preceding paragraph.

Article 46. The packaging materials and containers in direct contact with drugs shall conform to pharmaceutical requirements and to standards for safeguarding human health and safety.

The use of substandard packaging materials and containers in direct contact with drugs shall be ordered to be stopped by the drug regulatory authority.

Article 47. A drug manufacturing enterprise shall conduct quality inspection of drugs. Drugs that do not conform to the national drug standards shall not be released from the factory.

A drug manufacturing enterprise shall establish factory-release procedures for drugs, specifying the standards and conditions for factory release. Those that meet the standards and conditions may be released only after being signed off by the qualified person for quality.

Article 48. Drug packaging shall be suitable for the requirements of drug quality and shall be convenient for storage, transportation, and medical use.

Chinese medicinal materials to be shipped shall be packaged. On each package, the product name, place of origin, date, and supply unit shall be indicated, and a quality-conformity mark shall be attached.

Article 49. Drug packaging shall, in accordance with the provisions, be printed or affixed with a label and accompanied by a package insert.

The label or package insert shall indicate the drug’s generic name, ingredients, specifications, marketing authorization holder and its address, manufacturing enterprise and its address, approval number, product batch number, manufacturing date, valid period, indications or functions and major uses, usage, dosage, contraindications, adverse reactions, and precautions. The text on the label and package insert shall be clear, and matters such as the manufacturing date and valid period shall be conspicuously marked and easily identifiable.

The labels and package inserts of narcotic drugs, psychotropic drugs, toxic drugs for medical use, radioactive drugs, drugs for external use, and over-the-counter drugs shall be printed with the prescribed marks.

Article 50. Personnel in direct contact with drugs in marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall undergo health examinations each year. Those suffering from infectious diseases or other diseases that may contaminate drugs shall not engage in work involving direct contact with drugs.

Chapter 5 Drug Distribution

Article 51. Those engaged in drug wholesale activities shall be approved by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government in their locality and obtain a drug distribution license. Those engaged in drug retail activities shall be approved by the drug regulatory authority of the local people’s government at or above the county level in their locality and obtain a drug distribution license. Without a drug distribution license, no drug shall be distributed.

A drug distribution license shall indicate its valid period and distribution scope, and shall be re-examined and reissued upon expiration.

When a drug regulatory authority implements drug distribution licensing, in addition to the conditions prescribed in Article 52 of this Law, it shall also follow the principle of facilitating drug purchases by the public.

Article 52. Those engaged in drug distribution activities shall possess the following conditions:

(1) having licensed pharmacists or other pharmaceutical technical personnel who have been qualified in accordance with the law;

(2) having business premises, equipment, storage facilities, and a sanitary environment suitable for the drugs distributed;

(3) having a quality management institution or personnel suitable for the drugs distributed; and

(4) having rules and regulations to ensure drug quality, and conforming to the requirements of the Good Supply Practice for Drugs formulated by the drug regulatory authority under the State Council pursuant to this Law.

Article 53. Those engaged in drug distribution activities shall comply with the Good Supply Practice for Drugs, establish and improve a drug distribution quality management system, and ensure that the entire process of drug distribution continuously conforms to statutory requirements.

The State shall encourage and guide drug retail chain operation. The headquarters of an enterprise engaged in drug retail chain operation activities shall establish a unified quality management system and perform management responsibilities for the operating activities of its affiliated retail enterprises.

The legal representative and principal responsible person of a drug distribution enterprise shall bear overall responsibility for the drug distribution activities of the enterprise.

Article 54. The State shall implement a system of classified administration of prescription drugs and over-the-counter drugs. The specific measures shall be formulated by the drug regulatory authority under the State Council jointly with the health authority under the State Council.

Article 55. Marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall purchase drugs from marketing authorization holders or enterprises qualified for drug manufacture or distribution; however, this shall not apply to the purchase of Chinese medicinal materials that are not subject to approval administration.

Article 56. When purchasing drugs, a drug distribution enterprise shall establish and implement an incoming-goods inspection and acceptance system, and verify the drug conformity certificates and other markings; those that do not conform to the prescribed requirements shall not be purchased or sold.

Article 57. When a drug distribution enterprise purchases and sells drugs, it shall have true and complete purchase-and-sale records. The purchase-and-sale records shall indicate the drug’s generic name, dosage form, specifications, product batch number, valid period, marketing authorization holder, manufacturing enterprise, purchasing or selling unit, purchase or sale quantity, purchase or sale price, purchase or sale date, and other contents prescribed by the drug regulatory authority under the State Council.

Article 58. When a drug distribution enterprise retails drugs, it shall be accurate and shall correctly explain the usage, dosage, and precautions; the dispensing of prescriptions shall be checked, and the drugs listed in a prescription shall not be altered or substituted without authorization. Prescriptions with incompatible combinations or excessive dosages shall be refused for dispensing; where necessary, dispensing may proceed only after the prescribing physician makes corrections or re-signs.

When a drug distribution enterprise sells Chinese medicinal materials, it shall indicate the place of origin.

Licensed pharmacists or other pharmaceutical technical personnel who have been qualified in accordance with the law shall be responsible for the enterprise’s drug management, prescription review and dispensing, guidance on rational drug use, and other work.

Article 59. A drug distribution enterprise shall formulate and implement a drug storage system, and take necessary measures such as refrigeration, anti-freezing, moisture-proofing, insect prevention, and rodent prevention to ensure drug quality.

An inspection system shall be implemented for the receipt and dispatch of drugs.

Article 60. Urban and rural trade-fair markets may sell Chinese medicinal materials, except as otherwise provided by the State Council.

Article 61. Marketing authorization holders and drug distribution enterprises that sell drugs via networks shall comply with the relevant provisions of this Law on drug distribution. The specific administrative measures shall be formulated by the drug regulatory authority under the State Council jointly with the health authority under the State Council and other departments.

Drugs subject to special administration by the State, such as vaccines, blood products, narcotic drugs, psychotropic drugs, toxic drugs for medical use, radioactive drugs, and drug-category precursor chemicals, shall not be sold via networks.

Article 62. A provider of a third-party platform for online drug trading shall, in accordance with the provisions of the drug regulatory authority under the State Council, file with the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government in its locality.

The third-party platform provider shall, in accordance with the law, review the qualifications and the like of the marketing authorization holders and drug distribution enterprises applying to operate on the platform, ensure that they conform to statutory requirements, and manage the drug distribution conduct occurring on the platform.

Where the third-party platform provider discovers that a marketing authorization holder or drug distribution enterprise operating on the platform has committed an act in violation of the provisions of this Law, it shall promptly stop such act and immediately report to the drug regulatory authority of the county-level people’s government in its locality; where it discovers a serious illegal act, it shall immediately stop providing online trading platform services.

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

Article 64. Drugs shall be imported through ports where drug importation is permitted, and the enterprise importing the drugs shall file with the drug regulatory authority in the locality of the port. The customs shall handle customs-clearance formalities on the basis of the imported-drug customs-clearance form issued by the drug regulatory authority. Without an imported-drug customs-clearance form, the customs shall not release the drugs.

The drug regulatory authority in the locality of the port shall notify the drug inspection institution to conduct spot-check inspection of imported drugs in accordance with the provisions of the drug regulatory authority under the State Council.

The ports where drug importation is permitted shall be proposed by the drug regulatory authority under the State Council jointly with the General Administration of Customs and submitted to the State Council for approval.

Article 65. Where a medical institution needs to import a small quantity of drugs due to urgent clinical needs, it may, upon approval by the drug regulatory authority under the State Council or by the people’s government of a province, autonomous region, or municipality directly under the Central Government authorized by the State Council, import them. The imported drugs shall be used for specific medical purposes within the designated medical institution.

Small quantities of drugs carried into the country by individuals for personal use shall be handled in accordance with the relevant provisions of the State.

Article 66. The import and export of narcotic drugs and psychotropic drugs within the scope prescribed by the State shall require an import permit or export permit issued by the drug regulatory authority under the State Council.

Article 67. The import of drugs with uncertain efficacy, severe adverse reactions, or that otherwise endanger human health is prohibited.

Article 68. Before sale or upon import of the following drugs, the drug regulatory authority under the State Council shall designate a drug inspection institution to conduct inspection; drugs that have not been inspected or that fail inspection shall not be sold or imported:

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

(2) biological products prescribed by the drug regulatory authority under the State Council; and

(3) other drugs prescribed by the State Council.

Chapter 6 Pharmaceutical Affairs Administration of Medical Institutions

Article 69. A medical institution shall be equipped with licensed pharmacists or other pharmaceutical technical personnel who have been qualified in accordance with the law, to be responsible for the institution’s drug management, prescription review and dispensing, guidance on rational drug use, and other work. Non-pharmaceutical technical personnel shall not directly engage in pharmaceutical technical work.

Article 70. When purchasing drugs, a medical institution shall establish and implement an incoming-goods inspection and acceptance system, and verify the drug conformity certificates and other markings; those that do not conform to the prescribed requirements shall not be purchased or used.

Article 71. A medical institution shall have premises, equipment, storage facilities, and a sanitary environment suitable for the drugs it uses, formulate and implement a drug storage system, and take necessary measures such as refrigeration, anti-freezing, moisture-proofing, insect prevention, and rodent prevention to ensure drug quality.

Article 72. A medical institution shall adhere to the principles of safe, effective, economical, and rational drug use, follow the guiding principles for the clinical application of drugs, clinical diagnosis and treatment guidelines, and drug package inserts for rational drug use, and review the appropriateness of physicians’ prescriptions and medication orders.

Other drug-using units other than medical institutions shall comply with the provisions of this Law concerning the use of drugs by medical institutions.

Article 73. When licensed pharmacists or other pharmaceutical technical personnel who have been qualified in accordance with the law dispense prescriptions, they shall conduct checks, and the drugs listed in a prescription shall not be altered or substituted without authorization. Prescriptions with incompatible combinations or excessive dosages shall be refused for dispensing; where necessary, dispensing may proceed only after the prescribing physician makes corrections or re-signs.

Article 74. Where a medical institution prepares pharmaceutical preparations, it shall be approved by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government in its locality and obtain a medical-institution preparation license. Without a medical-institution preparation license, no pharmaceutical preparation shall be prepared.

A medical-institution preparation license shall indicate its valid period and shall be re-examined and reissued upon expiration.

Article 75. Where a medical institution prepares pharmaceutical preparations, it shall have facilities, management systems, inspection instruments, and a sanitary environment capable of ensuring the quality of the preparations.

Where a medical institution prepares pharmaceutical preparations, it shall do so in accordance with the verified processes, and the raw materials, excipients, packaging materials, and the like required shall conform to pharmaceutical requirements.

Article 76. Pharmaceutical preparations prepared by a medical institution shall be varieties that are clinically needed by the institution but not supplied on the market, and shall be approved by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government in its locality; however, this shall not apply where the law provides otherwise for the preparation of Chinese-medicine preparations.

Pharmaceutical preparations prepared by a medical institution shall undergo quality inspection in accordance with the provisions; those that pass shall be used within the institution on the basis of a physician’s prescription. Upon approval by the drug regulatory authority under the State Council or by the drug regulatory authority of the people’s government of a province, autonomous region, or municipality directly under the Central Government, pharmaceutical preparations prepared by a medical institution may be transferred for use among designated medical institutions.

Pharmaceutical preparations prepared by a medical institution shall not be sold on the market.

Chapter 7 Post-Marketing Administration of Drugs

Article 77. A marketing authorization holder shall formulate a post-marketing risk management plan for drugs, proactively carry out post-marketing studies of drugs, further confirm the safety, efficacy, and quality controllability of drugs, and strengthen the continuous management of marketed drugs.

Article 78. For a drug granted conditional approval, the marketing authorization holder shall take corresponding risk management measures and complete the relevant studies as required within the prescribed time limit; where the studies are not completed as required upon the expiration of the time limit or it cannot be proved that the benefits outweigh the risks, the drug regulatory authority under the State Council shall handle the matter in accordance with the law, up to and including cancellation of the drug registration certificate.

Article 79. Changes in the drug manufacturing process shall be subject to classified administration according to the degree of risk and impact on the safety, efficacy, and quality controllability of the drug. Those constituting major changes shall be approved by the drug regulatory authority under the State Council, and other changes shall be filed or reported in accordance with the provisions of the drug regulatory authority under the State Council.

A marketing authorization holder shall, in accordance with the provisions of the drug regulatory authority under the State Council, comprehensively assess and verify the impact of changes on the safety, efficacy, and quality controllability of the drug.

Article 80. A marketing authorization holder shall carry out post-marketing adverse-reaction monitoring of drugs, proactively collect and track and analyze information on suspected adverse drug reactions, and promptly take risk-control measures for drugs with identified risks.

Article 81. Marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall regularly examine the quality, efficacy, and adverse reactions of the drugs they manufacture, distribute, or use. Where suspected adverse reactions are discovered, they shall promptly report to the drug regulatory authority and the health authority. The specific measures shall be formulated by the drug regulatory authority under the State Council jointly with the health authority under the State Council.

For drugs confirmed to have caused serious adverse reactions, the drug regulatory authority under the State Council or the drug regulatory authority of the people’s government of a province, autonomous region, or municipality directly under the Central Government shall, in light of the actual circumstances, take emergency control measures such as stopping the manufacture, sale, and use, and shall organize an appraisal within five days and make an administrative handling decision in accordance with the law within fifteen days from the date on which the appraisal conclusion is made.

Article 82. Where a drug has a quality problem or other safety hazard, the marketing authorization holder shall immediately stop the sale, notify the relevant drug distribution enterprises and medical institutions to stop the sale and use, recall the drugs already sold, promptly make the recall information public, and where necessary immediately stop the manufacture, and report the drug recall and handling situation to the drug regulatory authority and the health authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government. Drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall cooperate.

Where a marketing authorization holder fails to recall drugs that it is required by law to recall, the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government shall order it to recall them.

Article 83. A marketing authorization holder shall periodically conduct post-marketing evaluation of the safety, efficacy, and quality controllability of marketed drugs. Where necessary, the drug regulatory authority under the State Council may order the marketing authorization holder to conduct a post-marketing evaluation or may directly organize a post-marketing evaluation.

Where, upon evaluation, a drug is found to have uncertain efficacy, severe adverse reactions, or otherwise endanger human health, its drug registration certificate shall be cancelled.

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

Drugs whose drug registration certificate has been cancelled, drugs that have exceeded their valid period, and the like shall be destroyed under the supervision of the drug regulatory authority, or shall be subject to other harmless-treatment measures in accordance with the law.

Chapter 8 Drug Prices and Advertising

Article 84. The State shall improve the drug procurement administration system, monitor drug prices, conduct cost-price surveys, strengthen the supervision and inspection of drug prices, investigate and punish in accordance with the law drug-price violations such as price monopolies and price gouging, and maintain order in drug prices.

Article 85. For drugs subject to market-adjusted pricing in accordance with the law, marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall set prices in accordance with the principles of fairness, reasonableness, good faith, and consistency of quality and price, and provide reasonably priced drugs to drug users.

Marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall comply with the provisions of the drug-price authority under the State Council on drug-price administration, set and mark drug retail prices, and refrain from acts such as excessive profiteering, price monopolies, and price fraud.

Article 86. Marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions shall, in accordance with the law, provide the drug-price authority with materials such as the actual purchase-and-sale prices and purchase-and-sale quantities of their drugs.

Article 87. A medical institution shall provide patients with a price list of the drugs used, truthfully publish the prices of its commonly used drugs in accordance with the provisions, and strengthen the management of rational drug use. The specific measures shall be formulated by the health authority under the State Council.

Article 88. Marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, and medical institutions are prohibited from giving or accepting kickbacks or other improper benefits in the purchase and sale of drugs.

Marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, or their agents are prohibited from giving, under any name, property or other improper benefits to the responsible persons, drug procurement personnel, physicians, pharmacists, and other relevant personnel of medical institutions that use their drugs. The responsible persons, drug procurement personnel, physicians, pharmacists, and other relevant personnel of medical institutions are prohibited from accepting, under any name, property or other improper benefits given by marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, or their agents.

Article 89. Drug advertisements shall be approved by the advertising review authority designated by the people’s government of the province, autonomous region, or municipality directly under the Central Government in the locality of the advertiser; those that have not been approved shall not be released.

Article 90. The content of drug advertisements shall be true and lawful, shall be based on the drug package insert verified by the drug regulatory authority under the State Council, and shall not contain false content.

Drug advertisements shall not contain assertions or guarantees of efficacy or safety; nor shall they make recommendations or attestations using the name or image of a state organ, scientific research unit, academic institution, industry association, or expert, scholar, physician, pharmacist, patient, or the like.

Non-drug advertisements shall not contain any publicity relating to drugs.

Article 91. Where this Law does not provide for drug prices and advertising, 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 the like shall apply.

Chapter 9 Drug Reserve and Supply

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

In the event of a major disaster, epidemic, or other emergency, drugs may be requisitioned on an emergency basis in accordance with the provisions of the Emergency Response Law of the People’s Republic of China.

Article 93. The State shall implement an essential-drugs system, select an appropriate number of varieties of essential drugs, strengthen the organization of their manufacture and reserve, improve the supply capacity of essential drugs, and meet the basic drug-use needs for disease prevention and treatment.

Article 94. The State shall establish a drug supply-and-demand monitoring system, promptly collect and aggregate and analyze information on the supply and demand of drugs in short supply, provide early warning of drugs in short supply, and take response measures.

Article 95. The State shall implement a list-administration system for drugs in short supply. The specific measures shall be formulated by the health authority under the State Council jointly with the drug regulatory authority under the State Council and other departments.

Where a marketing authorization holder ceases the manufacture of a drug in short supply, it shall report to the drug regulatory authority under the State Council or to the drug regulatory authority of the people’s government of a province, autonomous region, or municipality directly under the Central Government in accordance with the provisions.

Article 96. The State shall encourage the research, development, and manufacture of drugs in short supply, and give priority to the review and approval of drugs in short supply that are urgently needed clinically and new drugs for the prevention and treatment of major infectious diseases, rare diseases, and other diseases.

Article 97. For drugs in short supply, the State Council may restrict or prohibit their export. Where necessary, the relevant departments under the State Council may take measures such as organizing manufacture, price intervention, and expanding imports to safeguard drug supply.

Marketing authorization holders, drug manufacturing enterprises, and drug distribution enterprises shall safeguard the manufacture and supply of drugs in accordance with the provisions.

Chapter 10 Supervision and Administration

Article 98. The manufacture (including preparation, the same below), sale, and use of counterfeit drugs and substandard drugs are prohibited.

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

(1) the ingredients contained in the drug do not conform to the ingredients prescribed by the national drug standards;

(2) a non-drug is passed off as a drug, or one drug is passed off as another drug;

(3) the drug has deteriorated; or

(4) the indications or functions and major uses indicated for the drug exceed the prescribed scope.

A drug shall be a substandard drug under any of the following circumstances:

(1) the content of the drug’s ingredients does not conform to the national drug standards;

(2) the drug is contaminated;

(3) the drug’s valid period is not indicated or has been altered;

(4) the drug’s product batch number is not indicated or has been altered;

(5) the drug has exceeded its valid period;

(6) preservatives or excipients have been added to the drug without authorization; or

(7) the drug otherwise does not conform to drug standards.

It is prohibited to manufacture or import drugs without obtaining drug-approval documents; it is prohibited to use active pharmaceutical ingredients, packaging materials, and containers that have not been reviewed and approved in accordance with the provisions to manufacture drugs.

Article 99. Drug regulatory authorities shall, in accordance with the provisions of laws and regulations, conduct supervision and inspection of activities such as drug research, manufacture, and distribution and the use of drugs by drug-using units; where necessary, they may conduct extended inspections of the entities and individuals that provide products or services for the research, manufacture, distribution, and use of drugs, and the relevant entities and individuals shall cooperate and shall not refuse or conceal.

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

Where there is evidence proving that a safety hazard may exist, the drug regulatory authority shall, in light of the supervision and inspection situation, take measures such as admonition, regulatory interview, ordering rectification within a time limit, and suspending manufacture, sale, use, or import, and promptly make public the inspection and handling results.

When conducting supervision and inspection, a drug regulatory authority shall present its credentials, and shall keep confidential the trade secrets learned of during the supervision and inspection.

Article 100. A drug regulatory authority may, according to the needs of supervision and administration, conduct spot-check inspection of drug quality. Spot-check inspection shall be sampled in accordance with the provisions, and no fees shall be charged; samples shall be purchased. The required expenses shall be defrayed in accordance with the provisions of the State Council.

For drugs and their relevant materials for which there is evidence proving that they may endanger human health, the drug regulatory authority may seal up or seize them and make an administrative handling decision within seven days; where the drugs need to be inspected, it shall make an administrative handling decision within fifteen days from the date of issuance of the inspection report.

Article 101. The drug regulatory authorities of the State Council and of the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government shall periodically publish the results of drug-quality spot-check inspections; where a publication is improper, a correction shall be made within the scope of the original publication.

Article 102. Where a party has an objection to a drug-inspection result, it may, within seven days from the date of receipt of the drug-inspection result, apply for re-inspection to the original drug inspection institution or to a drug inspection institution established or designated by the drug regulatory authority at the next higher level, or may directly apply for re-inspection to a drug inspection institution established or designated by the drug regulatory authority under the State Council. The drug inspection institution accepting the re-inspection shall make a re-inspection conclusion within the time prescribed by the drug regulatory authority under the State Council.

Article 103. Drug regulatory authorities shall inspect the compliance of marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, non-clinical drug safety evaluation research institutions, drug clinical-trial institutions, and the like with the Good Manufacturing Practice for Drugs, the Good Supply Practice for Drugs, the Good Laboratory Practice for Non-clinical Drug Studies, the Good Clinical Practice for Drugs, and the like, and supervise their continuous conformity with statutory requirements.

Article 104. The State shall establish a professionalized and specialized contingent of drug inspectors. Inspectors shall be familiar with drug laws and regulations and possess drug-related professional knowledge.

Article 105. Drug regulatory authorities shall establish drug-safety credit files for marketing authorization holders, drug manufacturing enterprises, drug distribution enterprises, non-clinical drug safety evaluation research institutions, drug clinical-trial institutions, and medical institutions, recording the issuance of licenses, the results of routine supervision and inspection, the investigation and punishment of illegal acts, and the like, and shall make them public in accordance with the law and update them promptly; for those with bad credit records, the frequency of supervision and inspection shall be increased, and joint punishment may be implemented in accordance with the provisions of the State.

Article 106. Drug regulatory authorities shall publish their email addresses and telephone numbers, accept inquiries, complaints, and reports, and respond, verify, and handle them promptly in accordance with the law. For reports verified to be true, rewards shall be given to the informants in accordance with the relevant provisions.

Drug regulatory authorities shall keep the information of informants confidential and protect the lawful rights and interests of informants. Where an informant reports the entity at which the informant works, that entity shall not retaliate against the informant by terminating or altering the labor contract or by other means.

Article 107. The State shall implement a system of unified publication of drug-safety information. The overall situation of national drug safety, drug-safety risk warning information, major drug-safety incidents and the investigation and handling information thereof, and other information determined by the State Council as requiring unified publication shall be uniformly published by the drug regulatory authority under the State Council. Where the impact of drug-safety risk warning information and of major drug-safety incidents and the investigation and handling information thereof is limited to a specific region, it may also be published by the relevant drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government. The above information shall not be released without authorization.

The publication of drug-safety information shall be timely, accurate, and comprehensive, with necessary explanations, so as to avoid misleading.

No entity or individual shall 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 manufacturing enterprises, drug distribution enterprises, medical institutions, and the like shall formulate their respective drug-safety incident handling plans, and organize and carry out training and emergency drills.

In the event of a drug-safety incident, the people’s government at or above the county level shall immediately organize and carry out response work in accordance with the emergency response plan; the relevant entities shall immediately take effective measures to handle it and prevent the harm from expanding.

Article 109. Where a drug regulatory authority fails to promptly discover systemic drug-safety risks or fails to promptly eliminate drug-safety hazards within its supervision and administration area, the people’s government at the same level or the drug regulatory authority of the people’s government at the next higher level shall conduct a regulatory interview of its principal responsible person.

Where a local people’s government fails to perform its drug-safety responsibilities or fails to promptly eliminate regional major drug-safety hazards, the people’s government at the next higher level or the drug regulatory authority of the people’s government at the next higher level shall conduct a regulatory interview of its principal responsible person.

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

The regulatory-interview situation and the rectification situation shall be incorporated into the appraisal and assessment records of the drug supervision and administration work of the relevant departments and local people’s governments.

Article 110. Local people’s governments and their drug regulatory authorities shall not, by means such as requiring drug inspection or approval, restrict or exclude drugs manufactured by marketing authorization holders or drug manufacturing enterprises from outside their local areas from entering their local areas.

Article 111. Drug regulatory authorities and the specialized drug technical institutions they establish or designate shall not participate in drug manufacturing or distribution activities, and shall not, in their name, recommend, supervise the manufacture of, or supervise the sale of drugs.

The staff of drug regulatory authorities and of the specialized drug technical institutions they establish or designate shall not participate in drug manufacturing or distribution activities.

Article 112. Where the State Council has other special administrative provisions on narcotic drugs, psychotropic drugs, toxic drugs for medical use, radioactive drugs, drug-category precursor chemicals, and the like, such provisions shall apply.

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

For cases in which, in accordance with the law, criminal liability need not be pursued or criminal punishment is exempted, but administrative liability shall be pursued, the public security organ, the people’s procuratorate, and the people’s court shall promptly transfer the case to the drug regulatory authority.

Where a public security organ, people’s procuratorate, or people’s court requests a drug regulatory authority, an ecological-environment authority, or another department to provide assistance such as inspection conclusions and identification opinions and harmless treatment of the drugs involved in a case, the relevant department shall promptly provide such assistance.

Chapter 11 Legal Liability

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

Article 115. Where a drug is manufactured or sold without obtaining a drug manufacturing license, a drug distribution license, or a medical-institution preparation license, the offender shall be ordered to close down, the drugs unlawfully manufactured or sold and the unlawful gains shall be confiscated, and a fine of not less than fifteen times but not more than thirty times the value of the drugs unlawfully manufactured or sold (including drugs already sold and not yet sold, the same below) shall be imposed; where the value is less than RMB 100,000, it shall be calculated as RMB 100,000.

Article 116. Where a counterfeit drug is manufactured or sold, the drugs unlawfully manufactured or sold and the unlawful gains shall be confiscated, the offender shall be ordered to suspend production or business 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 drugs unlawfully manufactured or sold shall be imposed; where the value is less than RMB 100,000, it shall be calculated as RMB 100,000; where the circumstances are serious, the drug manufacturing license, drug distribution license, or medical-institution preparation license shall be revoked, the corresponding applications of the offender shall not be accepted for ten years, and where the marketing authorization holder is an overseas enterprise, the import of its drugs shall be prohibited for ten years.

Article 117. Where a substandard drug is manufactured or sold, the drugs unlawfully manufactured or sold and the unlawful gains shall be confiscated, and a fine of not less than ten times but not more than twenty times the value of the drugs unlawfully manufactured or sold shall be imposed; where the value of the drugs unlawfully manufactured or wholesaled is less than RMB 100,000, it shall be calculated as RMB 100,000, and where the value of the drugs unlawfully retailed is less than RMB 10,000, it shall be calculated as RMB 10,000; where the circumstances are serious, the offender shall be ordered to suspend production or business for rectification, up to and including the revocation of the drug-approval documents, drug manufacturing license, drug distribution license, or medical-institution preparation license.

Where the prepared slices of Chinese crude drugs manufactured or sold do not conform to drug standards but do not yet affect safety and efficacy, the offender shall be ordered to make corrections within a time limit and be given a warning; a fine of not less than RMB 100,000 but not more than RMB 500,000 may be imposed.

Article 118. Where a counterfeit drug is manufactured or sold, or a substandard drug is manufactured or sold under serious circumstances, the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons shall have the income obtained from the entity during the period of the illegal act confiscated, be fined not less than 30 percent but not more than three times the income obtained, be prohibited for life from engaging in drug manufacturing and distribution activities, and may be detained by the public security organ for not less than five days but not more than fifteen days.

The raw materials, excipients, packaging materials, and production equipment used by the manufacturer specifically for manufacturing counterfeit drugs or substandard drugs shall be confiscated.

Article 119. Where a drug-using unit uses a counterfeit drug or substandard drug, it shall be punished in accordance with the provisions on selling a counterfeit drug or retailing a substandard drug; where the circumstances are serious, and the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons hold practice certificates as medical and health personnel, their practice certificates shall also be revoked.

Article 120. Where a person knows or should know that a drug is a counterfeit drug, a substandard drug, or a drug prescribed in items (1) through (5) of paragraph 1 of Article 124 of this Law, and provides for it convenient conditions such as storage and transportation, all storage and transportation income shall be confiscated, and a fine of not less than one time but not more than five times the unlawful income shall be imposed; where the circumstances are serious, a fine of not less than five times but not more than fifteen times the unlawful income shall also be imposed; where the unlawful income is less than RMB 50,000, it shall be calculated as RMB 50,000.

Article 121. A decision to punish a counterfeit drug or substandard drug shall, in accordance with the law, state the quality-inspection conclusion of the drug inspection institution.

Article 122. Where a license or drug-approval document is forged, altered, leased, lent, or unlawfully traded, the unlawful gains shall be confiscated, and a fine of not less than one time but not more than five times the unlawful gains shall be imposed; where the circumstances are serious, a fine of not less than five times but not more than fifteen times the unlawful gains shall also 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 responsible person, the directly responsible person in charge, and other responsible persons shall be fined not less than RMB 20,000 but not more than RMB 200,000, prohibited for ten years from engaging in drug manufacturing and distribution activities, and may be detained by the public security organ for not less than five days but not more than fifteen days; where the unlawful 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 used, to fraudulently obtain a clinical-trial permit, drug manufacturing permit, drug distribution permit, medical-institution preparation permit, drug registration, or other permit, the relevant permit shall be revoked, the corresponding applications of the offender shall not be accepted for ten years, and a fine of not less than RMB 500,000 but not more than RMB 5,000,000 shall be imposed; where the circumstances are serious, the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons shall be fined not less than RMB 20,000 but not more than RMB 200,000, prohibited for ten years from engaging in drug manufacturing and distribution activities, and may be detained by the public security organ for not less than five days but not more than fifteen days.

Article 124. Where any of the following acts is committed in violation of the provisions of this Law, the drugs unlawfully manufactured, imported, or sold, the unlawful gains, and the raw materials, excipients, packaging materials, and production equipment specifically used for the unlawful manufacture shall be confiscated, the offender shall be ordered to suspend production or business for rectification, and a fine of not less than fifteen times but not more than thirty times the value of the drugs unlawfully manufactured, imported, or sold shall be imposed; where 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 manufacturing license, drug distribution license, or medical-institution preparation license, and the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons shall have the income obtained from the entity during the period of the illegal act confiscated, be fined not less than 30 percent but not more than three times the income obtained, be prohibited for ten years up to and including for life from engaging in drug manufacturing and distribution activities, and may be detained by the public security organ for not less than five days but not more than fifteen days:

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

(2) using drug-approval documents obtained by deceptive means to manufacture or import drugs;

(3) using active pharmaceutical ingredients that have not been reviewed and approved to manufacture drugs;

(4) selling drugs without inspection where inspection is required;

(5) manufacturing or selling drugs prohibited from use by the drug regulatory authority under the State Council;

(6) fabricating manufacturing or inspection records; or

(7) making major changes in the drug manufacturing process without approval.

Where the drugs prescribed in items (1) through (3) of the preceding paragraph are sold, or where a drug-using unit uses the drugs prescribed in items (1) through (5) of the preceding paragraph, punishment shall be imposed in accordance with the provisions of the preceding paragraph; where the circumstances are serious, and the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons of the drug-using unit hold practice certificates as medical and health personnel, their practice certificates shall also be revoked.

Where a small quantity of drugs that have been lawfully marketed overseas is imported without approval, and the circumstances are relatively minor, the punishment may be mitigated or exempted in accordance with the law.

Article 125. Where any of the following acts is committed in violation of the provisions of this Law, the drugs unlawfully manufactured or sold, the unlawful gains, and the packaging materials and containers shall be confiscated, the offender shall be ordered to suspend production or business for rectification, and a fine of not less than RMB 500,000 but not more than RMB 5,000,000 shall be imposed; where the circumstances are serious, the drug-approval documents, drug manufacturing license, and drug distribution license shall be revoked, and the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons shall be fined not less than RMB 20,000 but not more than RMB 200,000 and prohibited for ten years up to and including for life from engaging in drug manufacturing and distribution activities:

(1) carrying out a drug clinical trial without approval;

(2) using packaging materials or containers in direct contact with drugs that have not been reviewed to manufacture drugs, or selling such drugs; or

(3) using labels or package inserts that have not been verified.

Article 126. Except as otherwise provided in this Law, where a marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, non-clinical drug safety evaluation research institution, drug clinical-trial institution, or the like fails to comply with the Good Manufacturing Practice for Drugs, the Good Supply Practice for Drugs, the Good Laboratory Practice for Non-clinical Drug Studies, the Good Clinical Practice for Drugs, or the like, it shall be ordered to make corrections within a time limit and be given a warning; where corrections are not made upon the expiration of the time limit, a fine of not less than RMB 100,000 but not more than RMB 500,000 shall be imposed; where the circumstances are serious, a fine of not less than RMB 500,000 but not more than RMB 2,000,000 shall be imposed, the offender shall be ordered to suspend production or business for rectification, up to and including the revocation of the drug-approval documents, drug manufacturing license, drug distribution license, and the like, the non-clinical drug safety evaluation research institution, drug clinical-trial institution, or the like shall not carry out non-clinical drug safety evaluation studies or drug clinical trials for five years, and the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons shall have the income obtained from the entity during the period of the illegal act confiscated, be fined not less than 10 percent but not more than 50 percent of the income obtained, and be prohibited for ten years up to and including for life from engaging in drug manufacturing, distribution, and other activities.

Article 127. Where any of the following acts is committed in violation of the provisions of this Law, the offender shall be ordered to make corrections within a time limit and be given a warning; where corrections are not made upon the expiration of the time limit, a fine of not less than RMB 100,000 but not more than RMB 500,000 shall be imposed:

(1) carrying out a bioequivalence trial without filing;

(2) where, during a drug clinical trial, a safety problem or other risk is discovered, and the clinical-trial sponsor fails to promptly adjust the clinical-trial protocol, suspend or terminate the clinical trial, or fails to report to the drug regulatory authority under the State Council;

(3) failing to establish and implement a drug traceability system in accordance with the provisions;

(4) failing to submit the annual report in accordance with the provisions;

(5) failing to file or report changes in the drug manufacturing process in accordance with the provisions;

(6) failing to formulate a post-marketing risk management plan for drugs; or

(7) failing to carry out post-marketing studies or post-marketing evaluation of drugs in accordance with the provisions.

Article 128. Except where punishment shall be imposed as for counterfeit drugs or substandard drugs in accordance with the law, where drug packaging is not, in accordance with the provisions, printed or affixed with a label or accompanied by a package insert, or the label or package insert does not, in accordance with the provisions, indicate the relevant information or is not printed with the prescribed marks, the offender shall be ordered to make corrections and be given a warning; where the circumstances are serious, the drug registration certificate shall be revoked.

Article 129. Where, in violation of the provisions of this Law, a marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, or medical institution fails to purchase drugs from a marketing authorization holder or an enterprise qualified for drug manufacture or distribution, it shall be ordered to make corrections, the drugs unlawfully purchased and the unlawful gains shall be confiscated, and a fine of not less than two times but not more than ten times the value of the drugs unlawfully purchased shall be imposed; where the circumstances are serious, a fine of not less than ten times but not more than thirty times the value shall also be imposed, and the drug-approval documents, drug manufacturing license, drug distribution 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, in violation of the provisions of this Law, a drug distribution enterprise fails to keep records in accordance with the provisions when purchasing and selling drugs, fails to correctly explain the usage, dosage, and other matters when retailing drugs, or fails to dispense prescriptions in accordance with the provisions, it shall be ordered to make corrections and be given a warning; where the circumstances are serious, the drug distribution license shall be revoked.

Article 131. Where, in violation of the provisions of this Law, a provider of a third-party platform for online drug trading fails to perform the obligations of qualification review, reporting, stopping the provision of online trading platform services, and the like, it shall be ordered to make corrections, the unlawful gains shall be confiscated, and a fine of not less than RMB 200,000 but not more than RMB 2,000,000 shall be imposed; where the circumstances are serious, it shall be ordered to suspend business for rectification and be fined not less than RMB 2,000,000 but not more than RMB 5,000,000.

Article 132. Where a drug for which a drug registration certificate has been obtained is imported but the filing is not made, in accordance with the provisions, with the drug regulatory authority in the locality of the port where drug importation is permitted, the offender shall be ordered to make corrections within a time limit and be given a warning; where corrections are not made upon the expiration of the time limit, the drug registration certificate shall be revoked.

Article 133. Where, in violation of the provisions of this Law, a medical institution sells on the market the pharmaceutical preparations it has prepared, it shall be ordered to make corrections, the preparations unlawfully sold and the unlawful gains shall be confiscated, and a fine of not less than two times but not more than five times the value of the preparations unlawfully sold shall be imposed; where the circumstances are serious, a fine of not less than five times but not more than fifteen times the value shall also be imposed; where the value is less than RMB 50,000, it shall be calculated as RMB 50,000.

Article 134. Where a marketing authorization holder fails to carry out adverse-drug-reaction monitoring or to report suspected adverse drug reactions in accordance with the provisions, it shall be ordered to make corrections within a time limit and be given a warning; where corrections are not made upon the expiration of the time limit, it shall be ordered to suspend production or business for rectification and be fined 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 the provisions, it shall be ordered to make corrections within a time limit and be given a warning; where corrections are not made upon the expiration of the time limit, it shall be ordered to suspend production or business for rectification and be fined not less than RMB 50,000 but not more than RMB 500,000.

Where a medical institution fails to report suspected adverse drug reactions in accordance with the provisions, it shall be ordered to make corrections within a time limit and be given a warning; where corrections are not made upon the expiration of the time limit, it shall be fined not less than RMB 50,000 but not more than RMB 500,000.

Article 135. Where a marketing authorization holder, after being ordered by the drug regulatory authority of the people’s government of the province, autonomous region, or municipality directly under the Central Government to recall drugs, refuses to recall them, it shall be fined not less than five times but not more than ten times the value of the drugs that should be recalled; where 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, drug manufacturing license, and drug distribution license shall be revoked, and the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons shall be fined not less than RMB 20,000 but not more than RMB 200,000. Where a drug manufacturing enterprise, drug distribution enterprise, or medical institution refuses to cooperate with a recall, it shall be fined not less than RMB 100,000 but not more than RMB 500,000.

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

Article 137. Where any of the following acts is committed, a heavier punishment shall be imposed within the range of punishment prescribed in this Law:

(1) passing off other drugs with narcotic drugs, psychotropic drugs, toxic drugs for medical use, radioactive drugs, or drug-category precursor chemicals, or passing off the above-mentioned drugs with other drugs;

(2) manufacturing or selling counterfeit drugs or substandard drugs whose main users are pregnant or parturient women or children;

(3) the biological products manufactured or sold being counterfeit drugs or substandard drugs;

(4) manufacturing or selling counterfeit drugs or substandard drugs, causing personal injury consequences;

(5) re-offending in manufacturing or selling counterfeit drugs or substandard drugs after having been dealt with; or

(6) refusing or evading supervision and inspection, forging, destroying, or concealing relevant evidentiary materials, or using sealed-up or seized articles without authorization.

Article 138. Where a drug inspection institution issues a false inspection report, it shall be ordered to make corrections and be given a warning, and the institution shall be fined not less than RMB 200,000 but not more than RMB 1,000,000; the directly responsible person in charge and other directly responsible persons shall be given sanctions of demotion, removal from office, or dismissal in accordance with the law, the unlawful gains shall be confiscated, and a fine of not more than RMB 50,000 shall be imposed; where the circumstances are serious, its inspection qualification shall be revoked. Where the inspection results issued by a drug inspection institution are untrue and cause losses, it shall bear corresponding compensation liability.

Article 139. The administrative penalties prescribed in Articles 115 through 138 of this Law shall be decided by the drug regulatory authority of the people’s government at or above the county level in accordance with the division of responsibilities; where a permit is revoked or a license is revoked, the decision shall be made by the department that originally granted the approval or issued the license.

Article 140. Where a marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, or medical institution employs personnel in violation of the provisions of this Law, the drug regulatory authority or the health authority 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 marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, or medical institution gives or accepts kickbacks or other improper benefits in the purchase and sale of drugs, or where a marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, or agent gives property or other improper benefits to the responsible persons, drug procurement personnel, physicians, pharmacists, or other relevant personnel of a medical institution that uses its drugs, the market regulatory authority shall confiscate the unlawful gains and impose a fine of not less than RMB 300,000 but not more than RMB 3,000,000; where the circumstances are serious, the business license of the marketing authorization holder, drug manufacturing enterprise, or drug distribution enterprise shall be revoked, and the drug regulatory authority shall revoke the drug-approval documents, drug manufacturing license, or drug distribution license.

Where a marketing authorization holder, drug manufacturing enterprise, or drug distribution enterprise bribes a State functionary in the research, manufacture, or distribution of drugs, the legal representative, principal responsible person, the directly responsible person in charge, and other responsible persons shall be prohibited for life from engaging in drug manufacturing and distribution activities.

Article 142. Where the responsible persons, procurement personnel, or other relevant personnel of a marketing authorization holder, drug manufacturing enterprise, or drug distribution enterprise accept property or other improper benefits given by another marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, or agent in the purchase and sale of drugs, the unlawful gains shall be confiscated and punishment shall be given in accordance with the law; where the circumstances are serious, they shall be prohibited for five years from engaging in drug manufacturing and distribution activities.

Where the responsible persons, drug procurement personnel, physicians, pharmacists, or other relevant personnel of a medical institution accept property or other improper benefits given by a marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, or agent, the health authority or the institution itself shall impose sanctions and confiscate the unlawful gains; where the circumstances are serious, their practice certificates shall also be revoked.

Article 143. Where, in violation of the provisions of this Law, false drug-safety information is fabricated or disseminated, constituting an act in violation of public-security administration, the public security organ shall impose a public-security administration punishment in accordance with the law.

Article 144. Where a marketing authorization holder, drug manufacturing enterprise, drug distribution enterprise, or medical institution, in violation of the provisions of this Law, causes harm to drug users, it shall bear compensation liability in accordance with the law.

Where harm is suffered due to a drug-quality problem, the victim may claim compensation for losses from the marketing authorization holder or the drug manufacturing enterprise, or may claim compensation for losses from the drug distribution enterprise or the medical institution. Upon receipt of the victim’s compensation claim, the recipient shall implement a first-liability system and make advance compensation; after making advance compensation, it may seek recovery in accordance with the law.

Where a counterfeit drug or substandard drug is manufactured, or a drug known to be a counterfeit drug or substandard drug is nonetheless sold or used, the victim or the victim’s close relatives may, in addition to claiming compensation for losses, also claim payment of compensation amounting to ten times the price or three times the losses; where the additional compensation amount is less than RMB 1,000, it shall be RMB 1,000.

Article 145. Where a drug regulatory authority or a specialized drug technical institution established or designated by it participates in drug manufacturing or distribution activities, its competent authority at the higher level shall order it to make corrections and confiscate the unlawful income; where the circumstances are serious, the directly responsible person in charge and other directly responsible persons shall be given sanctions in accordance with the law.

Where the staff of a drug regulatory authority or of a specialized drug technical institution established or designated by it participate in drug manufacturing or distribution activities, they shall be given sanctions in accordance with the law.

Article 146. Where a drug regulatory authority or a drug inspection institution established or designated by it unlawfully charges inspection fees in drug supervision and inspection, the relevant government department shall order the return of the fees, and the directly responsible person in charge and other directly responsible persons shall be given sanctions in accordance with the law; where the circumstances are serious, its inspection qualification shall be revoked.

Article 147. Where, in violation of the provisions of this Law, a drug regulatory authority commits any of the following acts, the relevant permit shall be revoked, and the directly responsible person in charge and other directly responsible persons shall be given sanctions in accordance with the law:

(1) approving a drug clinical trial where the conditions are not met;

(2) issuing a drug registration certificate for a drug that does not meet the conditions; or

(3) issuing a drug manufacturing license, drug distribution license, or medical-institution preparation license to an entity that does not meet the conditions.

Article 148. Where, in violation of the provisions of this Law, a local people’s government at or above the county level commits any of the following acts, the directly responsible person in charge and other directly responsible persons shall be given a sanction of recording a demerit or recording a serious demerit; where the circumstances are serious, they shall be given a sanction of demotion, removal from office, or dismissal:

(1) concealing, falsely reporting, belatedly reporting, or failing to report a drug-safety incident;

(2) failing to promptly eliminate regional major drug-safety hazards, causing an especially serious drug-safety incident to occur within its administrative region, or causing major drug-safety incidents to occur consecutively; or

(3) ineffectively performing its duties, causing serious adverse effects or major losses.

Article 149. Where, in violation of the provisions of this Law, a drug regulatory or other authority commits any of the following acts, the directly responsible person in charge and other directly responsible persons shall be given a sanction of recording a demerit or recording a serious demerit; where the circumstances are relatively serious, they shall be given a sanction of demotion or removal from office; where the circumstances are serious, they shall be given a sanction of dismissal:

(1) concealing, falsely reporting, belatedly reporting, or failing to report a drug-safety incident;

(2) failing to promptly investigate and punish discovered drug-safety violations;

(3) failing to promptly discover systemic drug-safety risks, or failing to promptly eliminate drug-safety hazards within the supervision and administration area, causing serious effects; or

(4) otherwise failing to perform drug supervision and administration duties, causing serious adverse effects or major losses.

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

Where there is dereliction of duty or malfeasance in investigating and punishing counterfeit-drug and substandard-drug violations, the directly responsible person in charge and other directly responsible persons of the drug regulatory authority shall be given heavier sanctions in accordance with the law.

Article 151. The value prescribed in this Chapter shall be calculated on the basis of the marked price of the drugs unlawfully manufactured or sold; where there is no marked price, it shall be calculated on the basis of the market price of drugs of the same category.

Chapter 12 Supplementary Provisions

Article 152. The administration of the cultivation, collection, and breeding of Chinese medicinal materials shall be carried out in accordance with the provisions of the relevant laws and regulations.

Article 153. The administrative measures for medicinal materials customarily used by the people in particular regions shall be formulated by the drug regulatory authority under the State Council jointly with the traditional Chinese medicine authority under the State Council.

Article 154. The 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 pursuant to this Law.

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