Promulgation  Authorities: Standing Committee of the National

　　People's Congress Promulgation Date: 2019.08.26

　　Effective Date:     2019.12.01

　　Validity Status:    forthcoming

　　Document Number:    Presidential Decree No. 31

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

　　The revised Drug Administration Law of the People's Republic of China passed by the 12th Session of the Standing Committee of the 13th National People's Congress on 26 August 2019 is hereby promulgated and shall be implemented with effect from 1 December 2019.

　　26 August 2019

　　Passed by the Seventh Session of the Standing Committee of the Sixth National People's Congress on 20 September 1984

　　First amendment by the Twentieth Session of the Standing Committee of the Ninth National People's Congress on 28 February 2001

　　First revision on 28 December 2013 pursuant to the Decision of the Standing Committee of the National People's Congress on Revision of Seven Pieces of Legislation Including the "Marine Environmental Protection Law of the People's Republic of China" passed by the Sixth Session of the Standing Committee of the Twelfth National People's Congress

　　Second revision on 24 April 2015 pursuant to the Decision on Revision of the "Drug Administration Law of the People's Republic of China" passed by the Fourteenth Session of the Standing Committee of the Twelfth National People's Congress

　　Second amendment by the Twelfth Session of the Standing Committee of the Thirteenth National People's Congress on 26 August 2019

　　Chapter 1 General Principles

　　Article 1 This Law is enacted for the purposes of strengthening drug administration, to ensure drug quality, protecting the public's medication safety and legitimate rights and interests, protecting and promoting public health.

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

　　Drugs referred to in the Law shall mean substances used for the prevention, treatment and diagnosis of human diseases and intended for the regulation of the physiological functions of human beings, for which indication, usage and dosage are stipulated, including traditional Chinese medicine, chemical medicine and biological products etc.

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

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

　　The State protects wild crud drugs and traditional Chinese medicine resources and encourages cultivation of genuine Chinese herbal medicine.

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

　　Article 6 The State implements marketing authorization holder system for drug administration. Drug marketing authorization holders shall be responsible pursuant to the law for drug safety, efficacy and quality controllability throughout the drug research and development, manufacturing, distribution and use process.

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

　　Article 8 The drug administrative department under the State Council presides over the supervision and administration of drugs throughout the country. The relevant departments under the State Council are responsible for supervision and administration related to drug within their respective responsibilities. The drug administrative department under the State Council cooperates with the relevant departments under the State Council to implement the drug industry development plans and industrial policies developed by the state.

　　The drug regulatory authorities of the people’s government of a province, an autonomous region, or a municipality directly under the Central Government shall undertake the drug supervision and administration within its administrative region. The department in charge of drug regulation under the people’s governments of a city or county that sets districts (hereinafter referred to as the "drug administrative department") shall be responsible for the drug supervision and administration within its administrative region. The relevant departments under the local people’s governments at o r above the county level shall be responsible for supervision and administration related to drug within their respective responsibilities.

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

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

　　Article 11 Professional drug technology institutions established or designated by drug regulatory departments perform review, testing, inspection, monitoring and evaluation as required by the conduct of drug supervision and administration according to law.

　　Article 12 The State establishes and improves upon a drug traceability system. The drug administrative department of the State Council shall formulate unified drug traceability standards and regulations, propel mutual communication and sharing of drug traceability information, to achieve drug traceability.

　　The State establishes a pharmacovigilance system to monitor, identify, evaluate and control adverse reactions or other adverse reactions related to drug usage drug.

　　Article 13 The people's governments at all levels shall strengthen the publicity and education of drug safety, and carry out the popularization of knowledge on laws and regulations of drug safety.

　　The new media shall publicize knowledge on relevant laws and regulations of drugs, and supervise unlawful acts concerning drugs by public opinions. The publicity and reporting about drugs shall be comprehensive, scientific, objective and fair.

　　Article 14 Drug industry associations shall strengthen self-discipline, establish and improve industrial standard, promote the system construction of industrial integrity, guide and urge enterprises to manufacture and distribute drugs according to applicable laws.

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

　　Chapter 2 Drug Research and Development and Registration

　　Article 16 The State supports innovation of new drugs which are guided by clinical value and have clear or special therapeutic effect on human diseases, encourages research and manufacture of drugs which have new therapeutic mechanisms, treat serious life-threatening diseases or rare diseases, and have multiple targeted systemic regulatory interventions for humans, and promotes technological advancement for drugs.

　　The State encourages to utilize modern science and technology and traditional methods for traditional Chi nese medicine technology research and development, establishes and improves a technical evaluation system that is applicable to traditional Chinese medicine characteristics, and promotes Chinese medicine heritage and innovation.

　　The State takes effective measures, encourages research and development and innovation of pediatric drugs, boosts development of new drugs, dosage forms and strengths of pediatric drugs which are in line with pediatric physiological features, and prioritizes review and approval of pediatric drugs.

　　Article 17 Drug research and development activities shall comply with Good Laboratory Practice(GLP), and Good Clinical Practice(GCP), and ensure that the whole drug research and development process continuously com ply with statutory requirements. GLP and GCP shall be formulated by the drug administrative department of the State Council jointly with the relevant State Council departments.

　　Article 18 Non-clinical studies for drugs shall comply with the relevant provisions of the State, with personnel, field, equipment, instruments and management systems corresponding to the study, and ensure the authenticity of the data, documents and samples.

　　Article 19 For drug clinical trials application, according to the provisions of the drug administrativ e department of the State Council, the applicant shall submit the relevant data, documents and samples such as research and development methods, specification, pharmacological and toxicological study results etc truthfully, and be subject to approval by the drug administrative department of the State Council. The drug administrative department of the State Council shall, within 60 working days from the date of acceptance of a clinical trial application, decide on approval or not of the application and notify the clinical trial applicant; where the applicant is not notified within the stipulated period, the application shall be deemed approved. Bioequivalence study applications shall be filed for record to the drug administrative department of the State Council.

　　Drug clinical trials shall be conducted at a clinical trial institution which meets the corresponding criteria. Drug clinical trial institutions shall be subject to record administration; detailed measures shall be formulated by the drug administrative department of the State Council jointly with the competent health administrative department of the State Council.

　　Article 20 Conducting drug clinical trials shall comply with ethical principles, formulate a clinical trial protocol, and be subject to review and approval by ethics committee.

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

　　Article 21 Conducting a drug clinical trial shall make truthful statement and explanation to the trial subjects or their guardians in regard to the details such as the clinical trial objective and risks, obtain an informed consent letter signed voluntarily by the trial subject or his/her guardian, and take effective measures to protect the lawful rights and interests of the trial subjects.

　　Article 22 Where safety issues or other risks are discovered during the drug clinical trial period, the clinical trial applicant shall promptly adjust the clinical trial protocol, suspend or terminate the clinical trial, and report to the drug administra tive department of the State Council. Where necessary, the drug administrative department of the State Council may order the applicant to adjust the clinical trial protocol, suspend or terminate the clinical trial.

　　Article 23 For drugs under clinical trial which are used for treatment of serious life-threatening diseases for which there is no effective treatment, where it is concluded from medical observation that such drugs are beneficial and comply with ethical principles, such drug may be used within the clinical trial institution on other patients with the same condition upon review by ethics committee and obtaining informed consent.

　　Article 24 Drugs marketed in China shall be subject to approval by the drug administrative department of the State Council, and obtain a drug approval license, except for traditional Chinese medicinal herbs and traditional Chinese medicine preparations which are not subject to review and approval administration. The list of traditional Chinese medicinal herbs and traditional Chinese medicine preparations shall be formulated by the drug administrative department of the State Council jointly with the competent traditional Chinese medicine administrative department of the State Council.

　　Applicants for drug registration shall provide true, adequate and credible data, documents and samples to prove the drug safety, efficacy and quality.

　　Article 25 The drug administrative department of the State Council shall organize CMC, clinical and other technical staff to review drug registration application on drug safety, efficacy and quality as well as quality management, risk control and liability compensation etc; where the application meets the criteria, a drug approval license shall be issued.

　　During the review and approval, the drug administrative department of the State Council shall combine the review and approval of the chemical drug substance, review of the excipients and primary packag ing materials with drug product approve the specification, manufacturing process, labeling and leaflet.

　　Excipients referred to in this Law shall mean the excipients and additives used in drug manufacturing and formulation.

　　Article 26 For drug used for treatment of serious life-threatening diseases for which there is no effective treatment, as well as drugs urgently need for public health, where the drug clinical trial data to show efficacy and predictable clinical value. it can be conditionally approved, and the relevant information should be stated in the dug registration license.

　　Article 27 The drug administrative department of the State Council shall optimize the drug review and approval work system, strengthen capability building, establish and improve upon communication, expert advisory mechanism etc, optimize the review and review and approval process, and improve the review and approva l productivity.

　　The review conclusion and rational for drug marketing approval shall be disclosed for public supervision pursuant to the law. Commercial secrets accessed in the review and approval shall be kept confidential.

　　Article 28 Drugs on market shall comply with the national drug specifications. Where the drug specifications approved by the drug administrative department strict than the national drug specification, the approved specification shall be implemented; where the national drug specification is not in place, the approved drug specification shall be complied with.

　　The "Pharmacopoeia of the People's Republic of China" and drug specifications published by the drug administrative department are the national drug specifications.

　　The drug administrative department of the State Council shall, jointly with the competent health administrative department of the State Council, organize the pharmacopoeia committee to take charge of formulation and revision of the national drug specification.

　　The drug testing institution set up or appointed by the drug administrative department of the State Council shall be responsible for calibration of national drug standard substances and references materials.

　　Article 29 Drug names listed in the national drug specifications shall be generic drug names. Names listed as generic drug names shall not be used as a trademark.

　　Chapter 3 Drug Marketing Authorization Holder

　　Article 30 Drug Marketing Authorization Holder (MAH) refers to enterprises or R&D institutions which hold a drug approval license.

　　MAHs shall, pursuant to the provisions of this Law, be liable for non-clinical study, clinical trial, manufacturing and distribution, post-marketinging study, monitoring, reporting and handling of adverse reactions of the drug product. Other organizations and individuals engaged in drug research and development, manufacturing, distribution, storage, transportation, use activities etc shall abide by the corresponding liability pursuant to the law.

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

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

　　The MAHs shall conduct the audit on the quality management system of their entrusted drug manufacturing enterprise and drug distribution enterprise on a regular basis, and supervise the entrusted enterprises to ensure their continuous capability on the quality assurance and quality control.

　　Article 32 The MAHs can either produce drug products by themselves or entrust a drug manufacturing enterprise for production.

　　The MAHs that produce a drug product by themselves shall obtain a Drug Manufacturing Certificate in accordance with the provisions of this Law; where a drug is contracted for production, the MAHs shall entrust a qualified drug manufacturing enterprises. An entrustment agreement and a quality agreement shall be signed between the MAHs and the drug manufacturing enterprises. The MAHs and the entrusted manufacturing enterprises should perform their obligations under the agreement strictly.

　　The drug administrative department(s) of the State Council shall develop guidelines for drug entrusted production and quality agreements to provide guidance and supervision for the MAHs and the entrusted manufacturers to perform obligations of the drug quality assurance.

　　Entrusted manufacturing of blood products, narcotic drugs, psychotropic drugs, and medicinal toxic drugs, drug precursor chemicals is prohibited, unless otherwise stipulated by the drug administrative department(s) of the State Council.

　　Article 33 The MAHs shall establish a marketing release procedure, to conduct the inspection of drug products released by manufacturing enterprises, and the drug products can be released only after signed off by the authorized qualified person. . Drug products which do not conform to the national drug standards shall not be released.

　　Article 34 The MAHs can either distribute drug products by themselves or entrust a drug distributor for distribution. The MAHs engaged in drug retail activities shall obtain a drug supply certificate.

　　The MAHs engaged in distribution of drugs by themselves shall meet the criteria stipulated in Article 52 of this Law; for entrusted distribution, the entrusted drug distribution enterprise shall meet the criteria. An entrustment agreement shall be signed between the MAHs and the entrusted drug distributor. The MAHs and the entrusted distributor shall perform their obligations under the agreement strictly.

　　Article 35 If the MAH, the drug manufacturing enterprise or the drug distributor entrusts a third party to storage and transport the drug products, an assessment should be conducted on the entrusted party’s capacities of the quality assurance and risk management. An entrustment agreement should be signed with the entrusted party to specify the drug quality responsibility, operation procedures and other aspects. The entrusted party shall be supervised by the MAHs, the drug manufacturing enterprises or the drug distributors.

　　Article 36 The MAHs, the drug manufacturing enterprises, the drug distributors, and the medical institutions shall establish and implement drug quality traceability systems, to guarantee the traceability of drug products.

　　Article 37 The MAHs shall establish an annual report system, to report annually to the drug administrative department(s) under the provinces, autonomous regions, or municipality directly under the Central Government, about the drug production and the distribution, the post-marketinging studies, and the risk management, etc., in accordance with the regulations.

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

　　Article 39 The manufacturers of traditional Chinese medicine preparation shall fulfill relevant obligations of the MAH, and shall implement whole process management for the manufacturing and distribution of the preparation, establish a quality traceability system of the preparation to ensure the safety, efficacy and traceability of the preparation.

　　Article 40 The MAHs can transfer the drug approval license after approval by the drug administrative department(s) of the State Council.

　　The acquiring party should have the ability of the quality management, risk prevention and control and liability of compensation to ensure the safety and efficacy of the drug, and fully fulfill the obligations of the MAH according to the law.

　　Chapter 4 Drug Manufacturing

　　Article 41 Undertaking of drug manufacturing shall be subject to approval by the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government at their locality, and shall obtain the Drug Manufacturing Certificate. It is not permitted to manufacture drugs without the Drug Manufacturing Certificate.

　　The Drug Manufacturing Certificate shall state the expiry date and the scope of manufacturing, and be subject to review and promulgate upon expiry date.

　　Article 42 Undertaking of drug manufacturing shall satisfy the following criteria:

　　(1)employing pharmacy technicians, engineers and the corresponding technicians who obtain qualifications pursuant to the law;

　　(2)having factory premises, facilities and hygiene environment that are applicable to drug manufacturing;

　　(3)having the setup, staff and the requisite equipment for quality management and quality inspection for the drugs manufactured by the manufacturer;

　　(4)having rules and regulations to ensure the quality of drugs, and comply with the requirements of Good Manufacturing Practice which is stipulated by the drug administrative department of the State Council pursuant to this Law.

　　Article 43 Undertaking of drug manufacturing shall comply with Good Manufacturing Practice, establish and improve upon a drug manufacturing quality management system, ensure the whole drug manufacturing process continuously comply with statutory requirements.

　　The legal representative and the key person-in-charge of a drug manufacturing enterprise shall be fully responsible for the enterprise's drug manufacturing activities.

　　Article 44 The drug shall be manufactured in accordance with the national drug standards and the manufacturing process approved by the drug administrative department. The manufacturing and inspection records shall be complete and accurate and shall not be fabricated.

　　The prepared slices of Chinese crude drugs shall be processed in accordance with national drug standards; where the national drug standards do not stipulate, the processing shall comply with the processing norms formulated by the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government. The processing regulations formulated by the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government shall be filed to the drug administrative department of the State Council. Where the processing does not comply with the national drug standards or the processing regulations formulated by the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government, the prepared slices of Chinese crude drugs shall not be released from factory and marketed.

　　Article 45 The drug substances and excipients required in drug manufacturing shall comply with medicinal requirements and the relevant requirements of the Good Manufacturing Practice.

　　For drug manufacturing, shall audit the suppliers of drug substances and excipients etc pursuant to the provisions, to ensure that the purchased and used drug substances and excipients comply with the requirements stipulated in the preceding paragraph.

　　Article 46 Packaging materials and containers which come into direct contact with drugs shall comply with medicinal requirements and comply with the standards for ensuring human health and safety.

　　Where the packaging materials and containers which come into direct contact with drugs are not compliant, the drug administrative department shall order the manufacturer to stop using such packaging materials and containers.

　　Article 47 Drug manufacturing enterprises shall conduct drug quality inspection. The drug product which do not comply with the national drug standards shall not be released from factory.

　　Drug manufacturing enterprises shall establish drug product release procedures, and specify the release standards and criteria. Where the standards and criteria are complied with, can be released only upon signature by the Qualified Person.

　　Article 48 Drug packaging shall comply with drug quality requirements, and be convenient for stor age, transportation and medical use.

　　Shipments of the Chinese herbal medicine shall be packed. Each packaging shall state the product name, place of origin, date, supplier, and be affixed with a quality conformance mark.

　　Article 49 Drug packaging shall be printed or affixed with a label and include the package insert pursuant to the provisions.

　　The label or package insert shall state the generic name, ingredient, strength, name and address of MAH, name and address of the manufacturing enterprise, approval number, product batch number, date of manufacturing, period of validity, indications or functions, usage, dosage, contraindication, adverse reactions and precautions. The wording of the label and package insert shall be clear, and the date of manufacturing and period of validity shall be prominent and discernible.

　　The label and package insert for narcotics, psychological drugs, toxic drugs for medical use, radiative drugs, drugs for external use and OTC drugs shall be printed with the stipulated mark.

　　Article 50 Staff of MAHs, drug manufacturing enterprises, drug distributors and medical institutions who come into direct contact with drugs shall undergo health examination annually. Persons who suffer from an infectious disease or other diseases which may cause contamination to drugs shall not engage in work which involve direct contact with drugs.

　　Chapter 5 Drug Distribution

　　Article 51 Undertaking of drug wholesale shall be subject to approval by the drug administrative department of the people's government of the province, autonomous region or municipality directly under the Central Government at their locality, and shall obtain a drug supply certificate Undertaking of drug retail shall be subject to approval by the drug administrative department of a people's government of county level or above at the locality, and shall obtain a drug supply certificate. Operation of drug distribution without a drug supply certificate is prohibited.

　　A drug supply certificate shall state the validity period and the scope of business, and be subject to review and reissuance upon expiry of the validity period.

　　The drug administrative department implementing certification of drug distribution shall, in addition to complying with the criteria stipulated in Article 52 of this Law, adhere to the principle of convenience of drug purchase for the public.

　　Article 52 Undertaking of drug distribution activities shall meet the following criteria:

　　(1)having legally qualified pharmacists or other drug technicians;

　　(2)having business premises, equipment, warehousing facilities and hygiene environment corresponding to the drug distribution;

　　(3)having the quality management units or personnel corresponding to the drug distribution; and

　　(4)having rules and system to ensure drug quality, and comply with the requirements of Good Supply Practice formulated by the drug administrative department of the State Council pursuant to this Law.

　　Article 53 Undertaking drug distribution activities shall comply with the Good Supply Practice, establish and improve the quality management system for drug distribution, and ensure that the whole drug distribution process continuously comply with statutory requirements.

　　The State encourages and guides drug retail chain operation. The headquarters of a drug retai l chain business enterprise shall establish a unified quality management system, perform management responsibilities for the business activities of the retail chain enterprises.

　　The legal representative and the key person-in-charge of a drug distribution enterprise shall be fully responsible for the enterprise's drug distribution activities.

　　Article 54 The State implements a classification administration system for prescription drugs and over-the-counter drugs. Detailed measures shall be formulated by the drug administrative department of the State Council jointly with the health administrative department of the State Council.

　　Article 55 MAHs, drug manufacturing enterprises, drug distribution enterprises and medical institutions shall procure drugs from an MAH or an enterprise qualified to engage in drug manufacturing or distribution, except for procurement of traditional Chinese medicine herbs which are not subject to approval administration.

　　Article 56 Drug distribution enterprises procuring drugs for sales shall establish and implement a purchase inspection and acceptance system, and check the certificate of drug quality and other marks; where the stipulated requirements are not met, such drugs shall not be procured and sold.

　　Article 57 Drug distribution enterprise shall keep authentic and complete procurement and sales records when procuring and selling drugs. The procurement and sales records shall state the drug generic name, dosage form, strength, batch number, shelf-life, MAH, manufacturing enterprise, procurement or sales unit, procurement or sales quantity, procurement or sales price, procurement or sales date and other contents stipulated by the drug administrative department of the State Council.

　　Article 58 Drug distribution enterprises engaging in drug retail shall state the administration, dosage and precautions accurately and correctly; prescription for dispensing shall be verified; drugs listed in a prescription shall not be arbitrar ily changed or substituted. It shall be refused to dispense incompatible or over-dose prescriptions; where necessary, the prescription may be dispensed only upon correction or resigning by the prescribing physician.

　　Drug distribution enterprises engaging in sale of traditional Chinese medicine herbs shall state the place of origin.

　　Pharmacists or other pharmacy technicians who have obtained qualifications pursuant to the law shall be responsible for the enterprise's drug management, prescription examination and dispensing, and guidance of rational use of drugs, etc.

　　Article 59 Drug distribution enterprises shall formulate and implement drug storage system, adopt the requisite refrigeration, anti-freezing, dehumidifying, insect and rodent control measures, etc. to ensure drug quality.

　　Drug stock-in and stock-out shall be subject to an examination system.

　　Article 60 Traditional Chinese medicine herbs may be sold at urban and rural trade markets, unless otherwise stipulated by the State Council.

　　Article 61 MAHs and drug distribution enterprises engaging in online drug sales shall comply with the relevant provisions of this Law on drug distribution. Detailed administrative measures shall be formulated by the drug administrative department of the State Council jointly with the health administrative department of the State Council.

　　Drugs subject to special administration stipulated by the State, such as vaccines, blood products, narcotic drugs, psychiatric drugs, toxic drugs for medical use, radioactive drugs, drug precursor chemicals, etc. shall not be sold online.

　　Article 62 Third party platform providers for online drug sales shall file record with the drug administrative department of the people's government of the province, autonomous region or municipality directly under the Central Government at their locality pursuant to the provisions of the drug administrative department of the State Council.

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

　　Where a third party platform provider discovers that an MAH or a drug distribution enterprise operating on its platform has committed a violation of this Law, it shall promptly stop the offence and forthwith report to the drug administrative department of the county people's government at its locality; where the offence is a serious violation, the third party platform provider shall forthwith cease to provide the online transaction platform service.

　　Article 63 Newly-discovered and overseas-introduced herbs may be sold only upon approval by the drug administrative department of the State Council.

　　Article 64 Drugs shall be imported from approved drug-importing ports, and the drug-importing enterprise shall file record with the drug administrative department at the locality of the port. The customs shall process customs clearance formalities with the import drug customs clearance form issued by the drug administrative department. Where there is no import drug customs clearance form, the customs shall not release the cargo.

　　The drug administrative department at the locality of the port shall notify the drug control institute to conduct spot inspection on the imported drugs pursuant to the provisions of the drug administrative department of the State Council.

　　The approved drug-importing ports shall be proposed by the drug administrative department of the State Council jointly with the General Administration of Customs, and subject to approval by the State Council.

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

　　Small quantities of drugs brought into China by individuals for personal use shall be handled pursuant to the relevant provisions of the State.

　　Article 66 Importers and exporters of narcotic drugs and psychiatric drugs within the scope stipulated by the State shall present the importation permit or exportation permit issued by the drug administrative department of the State Council.

　　Article 67 Importation of drugs with unclear efficacy, significant adverse reactions or otherwise harmful to human health is prohibited.

　　Article 68 The drug administrative department of the State Council shall appoint a drug control institute to inspect the following drugs prior to sales or importation; drugs which have not been inspected or do not pass inspection shall not be sold or imported:

　　(1) drugs sold in China for the first time;

　　(2) biological products stipulated by the drug administrative department of the State Council; and

　　(3) any other drugs stipulated by the State Council.

　　Chapter 6 Pharmacy Administration of Medical Institutions

　　Article 69 Medical institutions shall employ pharmacists or other drug professionals who obtain qualifications pursuant to the law to take charge of the medical institution's drug management, checking and dispensing of prescriptions, medication guidance etc. No one who is not a drug professional shall engage directly in pharmacy technical work.

　　Article 70 Medical institutions procuring drugs shall establish and implement a purchase inspection and acceptance system, to inspect the qualification certificates and other marks of the drugs; where the stipulated requirements are not satisfied, such drugs shall not be procured and used.

　　Article 71 Medical institutions shall have premises, equipment, warehousing facilities and hygiene environment corresponding to use of drugs, formulate and implement a drug storage system, and adopt the requisite refrigeration, anti-freezing, dehumidifying, insect and rodent control measures etc, to ensure the quality of drug.

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

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

　　Article 73 When dispensing prescriptions, pharmacists or other drug professionals who obtained qualifications pursuant to the law shall check the prescription, and shall not arbitrarily change or substitute the drugs listed in the prescription. For prescriptions with drug incompatibilities or overdose, the pharmacist shall refuse to dispense; when necessary, the pharmacist may dispense the prescription only after the prescribing physician corrects the prescription or signs again.

　　Article 74 Medical institutions engaging in preparing drug preparations shall be subject to approval by the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government at their locality, and obtain a medical institution preparation permit. Preparation of drug preparation without a medical institution preparation permit is prohibited.

　　A medical institution preparation permit shall state the validity period, and be subject to review and reissuance upon expiry of the validity period.

　　Article 75 Medical institutions engaging in preparing drug preparations shall have facilities, management system, inspection equipment and hygiene environment which can ensure formulation quality.

　　Preparation of drug preparations by medical institutions shall be carried out in accordance with the approved process, the required active drug ingredients, excipients and packaging materials etc shall comply with medicinal requirements.

　　Article 76 The drug preparation prepared by a medical institution shall be ones that are to meet the clinical need of the institution but not available in the market, and shall be subject to approval by the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government at the locality, unless otherwise specified by the laws for the preparation of traditional Chinese medicine preparations.

　　The drug preparations prepared by a medical institution shall be subject to quality inspection pursuant to the provisions; upon passing inspection, the formulations shall be used in the medical institution its own in accordance with physician prescriptions. Upon approval by the drug administrative department of the State Council or the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government, the drug preparation prepared by the medical institution may be allocated and used by other designated medical institutions.

　　Drug preparation prepared by medical institutions shall not be sold on the market.

　　Chapter 7 Drug Post-marketing Management

　　Article 77 MAH shall formulate drug post-marketing risk management plan, take the initiative to carry out drug post- marketing study, to further confirm the safety, efficacy and quality controllability of the drugs, and strengthen continuous management of drugs launched to market.

　　Article 78 For drugs given conditional approval, the MAH shall adopt the corresponding risk management plan, and complete the relevant study within the stipulated period in accordance with the requirements; where the MAH is unable to complete the study within the stipulated period in accordance with the requirements or is unable to prove that the benefits outweigh the risks, the drug administrative department of the State Council shall handle the matter pursuant to the law, and may revoke the Drug approval license.

　　Article 79 Changes in the drug manufacturing process shall be subject to administration by classifications in accordance with the risks and impact of the change on drug safety, efficacy and quality controllability. Major changes shall be subject to approval by the drug administrative department of the State Council, other changes shall be subject to filing or reporting to the drug administrative department of the State Council.

　　MAH shall, pursuant to the provisions of the drug administrative department of the State Council, conduct comprehensive evaluation and validation of the changes impact on drug safety, efficacy and quality controllability.

　　Article 80 MAH shall conduct adverse reactions monitoring of marketed drug, take the initiative to coll ect, track and analyze information on suspected adverse reactions to the drugs, and promptly adopt risk control measures for drugs for which risks are identified.

　　Article 81 MAH, drug manufacturing enterprises, drug distributors and medical institutions sh all regularly inspect the quality, efficacy and adverse reactions of drugs manufactured, distributed and used by them. Cases of suspected adverse reactions shall be promptly reported to the drug administrative departments and the competent health administrative authority. Detailed measures shall be formulated by the drug administrative department of the State Council jointly with the competent health administrative department of the State Council.

　　For drugs for which serious adverse reactions are confirmed, the drug administrative department of the State Council or the drug administrative department of the People's Government of the province, autonomous region or centrally - administered municipality shall adopt emergency control measures in accordance with the actual conditions to stop manufacturing, sale and use etc, and shall organize evaluation within five days, and issue an administrative handling decision within 15 days from the date of the evaluation conclusion pursuant to the law.

　　Article 82 Where drugs have quality issues or other potential safety concerns, MAH shall immediately stop selling, notify the relevant drug distributors and medical institutions to stop sales and use, recall sold drugs, promptly announce recall information, forthwith stop manufacturing where necessary, and report drug recall and handling situation to the drug administrative department and the health administrative department of the People's Government of the province, autonomous region or centrally-administered municipality. The drug manufacturing enterprise, drug distributors and medical institutions shall cooperate.

　　Where the MAH does not recall the drugs according to law, the drug administrative department of the People's Government of the province, autonomous region or centrally-administered municipality shall order the MAH to recall the drugs.

　　Article 83 MAH shall conduct regular post-marketing evaluation of the safety, efficacy and quality controllability of the drugs launched to market. Where necessary, the drug administrative department of the State Council may order the MAH to conduct post-marketing evaluation or directly organize post-marketing evaluation.

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

　　Where the drug approval license is revoked, the drugs shall not be manufactured or imported, sold and used.

　　Drugs which the Drug approval license is revoked or drug is expired, etc. shall be destroyed or decontaminated pursuant to the law under the supervision of the drug administrative departments.

　　Chapter 8 Drug Pricing and Advertising

　　Article 84 The State improves upon the drug procurement administration system, monitors drug pricing, conducts costs and pricing investigation, strengthens supervision and inspection of drug pricing, investigates and deals with illegal drug pricing acts such as price monopolies, bull campaigns etc, and safeguards drug pricing order.

　　Article 85 For drugs subject to market-adjusted pricing pursuant to the law, MAH, drug manufacturing enterprises, drug distribution enterprises and medical institutions shall formulate pricing in accordance with the principles of "fairness, reasonableness, honesty and integrity, quality-price match", and provide reasonably-priced drugs to drug users.

　　MAHs, drug manufacturing enterprises, drug distribution enterprises and medical institutions shall comply with the provisions of the competent drug pricing administrative department of the State Council on administration of drug pricing, formulate and state drug retail prices, and shall not commit profiteering, price monopoly and price fraud etc.

　　Article 86 Drug MAHs, drug manufacturing enterprises, drug distribution enterprises and medical institutions shall provide information on actual procurement and sale prices and procurement and sale quantities of the drugs pursuant to the law to the competent drug pricing administrative department.

　　Article 87 Medical institutions shall provide patients with the price list of drugs used by them, announce the prices of commonly-used drugs truthfully pursuant to the provisions, and strengthen management of reasonable drug use. Detailed measures shall be formulated by the competent health administrative department of the State Council.

　　Article 88 Drug MAHs, drug manufacturing enterprises, drug distribution enterprises and medical institutions shall not give or receive rebates or other improper gains in procurement and sale of drugs.

　　Drug MAHs, drug manufacturing enterprises, drug distribution enterprises or their agents shall not give monies or other improper gains under any pretext to the person(s)-in-charge, drug procurement staff, physicians, pharmacists etc of medical institutions using their drugs. The person(s)-in-charge, drug procurement staff, physicians, pharmacists etc of medical institutions shall not receive monies or other improper gains under any pretext from drug MAHs, drug manufacturing enterprises, drug distribution enterprises or their agents.

　　Article 89 Drug advertisements shall be subject to approval by the advertisement examination authorities determined by the People's Government of the province, autonomous region or municipality directly under the Central Government at the locality of the advertiser; drug advertisements shall not be published without approval.

　　Article 90 The contents of drug advertisements shall be true and legitimate, shall be based on the literature of the drug approved by the drug administrative department of the State Council, and shall not contain false information.

　　Drug advertisements shall not assert or guarantee efficacy or safety of the advertised drug; shall not make use of the name or image  of State agencies, research institutes, academic institutions, industry associations or experts, academicians, physicians, pharmacists, patients etc for recommendation or endorsement.

　　Non-drug advertisement shall not involve advertising of drugs.

　　Article 91 For drug pricing and advertising matters not stipulated in this Law, the provisions of the Pricing Law of the People's Republic of China, the Anti-monopoly Law of the People's Republic of China, the Law of the People's Republic of China Against Unfair Competition, the Advertising Law of the People's Republic of China etc shall apply.

　　Chapter 9 Drug Reserve and Supply

　　Article 92 The State implements a drug reserve system by the establishment of Central and local drug reserves.

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

　　Article 93 The State implements essential drugs system, to select essential drugs of appropriate quantities, strengthen the organizing of manufacture and reserve, improve the supply capacity for essential drugs, and satisfy basic medication needs for disease prevention and treatment.

　　Article 94 The State establishes a drug supply monitoring system, to promptly gather, compile and analys is the supply information of shortage drug, implement advance warning for shortage drug, and adopt countermeasures.

　　Article 95 The State implements a list administration of shortage drug. Detailed measures shall be formulated by the competent health administrative department of the State Council jointly with the drug administrative department of the State Council etc.

　　Where a MAH stops to manufacture the shortage drug, it shall be reported to the drug administrative department of the State Council or the drug administrative department of the People's Government of the province, autonomous region or municipality directly under the Central Government.

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

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

　　The drug marketing authorization holder, drug manufacturing enterprises and drug distribution enterprises shall ensure drug manufacture and supply pursuant to the provisions.

　　Chapter 10 Supervision and Administration

　　Article 98 Manufacturing (including preparation, same hereinafter), sale or use of fake drugs and inferior drugs are prohibited.

　　Any of the following circumstances shall be deemed as fake drugs:

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

　　(2)a non-drug substance is simulated as a drug or one drug is simulated as another;

　　(3)deteriorated drugs; or

　　(4)the indications stated for the drugs exceed the stipulated scope. Any of the following circumstances shall be deemed as inferior drugs:

　　(1)the contents of the drugs are not compliant with the contents stipulated in the national drug standards;

　　(2)contaminated drugs;

　　(3)drugs for which the validity period is not stated or the validity period is altered;

　　(4)drugs for which the product batch number is not stated or the product batch number is altered;

　　(5)the validity period of the drugs has expired;

　　(6)drugs with unauthorized addition of preservatives or excipients; or

　　(7)any other drugs which do not comply with the drug standards.

　　Manufacturing or importation of drugs without a drug approval certificate is prohibited; use of active drug ingredients, packaging materials and containers which have not been reviewed and approved pursuant to the provisions for drug manufacturing is prohibited.

　　Article 99 The drug administrative departments shall, pursuant to the provisions of laws and regulations, supervise and inspect drug research and development, manufacturing, distribution and drug use by organizations etc, and where necessary, conduct extended inspection on organizations and individuals providing products or services for drug research and development, manufacturing, distribution and use; the relevant organizations and individuals shall cooperate, and shall not refuse or conceal information.

　　The drug administrative departments shall implement focused supervision and inspection for high-risk drugs.

　　Where there is evidence to prove that there are safety hazards, the drug administrative departments shall, based on supervision and inspection findings, adopt measures such as issue a warning, schedule an interview, order the entity to make correction within a stipulated period, suspend manufacturing and sale, use, importation etc, and shall promptly announce inspection and handling outcome.

　　When conducting supervision and inspection, the drug administrative departments shall present their credentials, and keep confidentiality of commercial secrets which have come into their knowledge during supervision and inspection.

　　Article 100 The drug administrative departments may, based on supervision and administration needs, inspect the drug quality of random samples. Random samples shall be taken pursuant to the provisions for inspection, and no fees shall be collected for inspection; random samples are required to be purchased. The requisite expenses shall be reimbursed pursuant to the provisions of the State Council.

　　Where there is evidence to prove that the drugs and the relevant materials thereof may harm human health, the drug administrative departments may seize or confiscate the drugs, and shall issue an administrative handling decision within seven days; where there is a need to inspect the drugs, an administrative handling decision shall be issued within 15 days from issuance of the inspection report.

　　Article 101 The State Council and the drug administrative departments of People's Governments of provinces, autonomous regions and municipality directly under the Central Government shall announce the drug quality findings of random samples inspected on a regular basis; where the announcement is improper, correction shall be made within the scope of the original announcement.

　　Article 102 A party concerned who disagrees with the drug inspection findings may apply to the original drug inspection agency or the drug inspection agency established or appointed by the higher- level drug administrative departments for review within seven days from receipt of the drug inspection findings, and may apply directly to the drug inspection agency established or appointed by the drug administrative department of the State Council for review. The drug inspection agency which accepts the application for review shall issue a review conclusion within the timeframe stipulated by the drug administrative department of the State Council.

　　Article 103 The drug administrative departments shall inspect compliance with GMP, GSP, GLP, GCP by MAHs, drug manufacturing enterprises, drug distribution enterprises, drug non-clinical safety evaluation research institutes, drug clinical trial organizations etc, and supervise these entities to continuously comply with statutory requirements.

　　Article 104 The State establishes a professional and specialized team of drug inspectors. The inspectors shall be familiar with drug laws and regulations, and have professional knowledge in drugs.

　　Article 105 The drug administrative departments establishes a drug safety credit record for MAHs, drug manufacturing enterprises, drug distribution enterprises, drug non-clinical safety evaluation research institutes, drug clinical trial organizations and medical institutions, to record issuance of permits, regular supervision and inspection findings, investigation and handling of illegal acts etc, announce to the public pursuant to the law and promptly update records; increase supervision and inspection frequency for entities with poor credit records, and may implement joint punishment pursuant to the provisions of the State.

　　Article 106 The drug administrative departments shall announce their email address and hotline number to accept enquiries, complaints, reports, and shall promptly reply, verify and handle enquiries, complaints, reports pursuant to the law. For verified reports, the informants shall be rewarded pursuant to the relevant provisions.

　　The drug administrative departments shall keep the identity information of informants confidential and protect the legitimate rights and interests of informants. Where an informant lodges a report against his/her employer, the employer shall not retaliate against the informant by way of rescission, amendment of his/her labour contract or otherwise.

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

　　Announcement of drug safety information shall be timely, accurate, comprehensive, and accompanied by necessary explanation to avoid misleading.

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

　　Article 108 People's Governments of county level and above shall formulate emergency plan for drug safety incidents. MAHs, Drug manufacturing enterprises, Drug distribution enterprises and medical institutions etc shall formulate their action plan for handling drug safety incidents, and organize and conduct training and drills.

　　Upon occurrence of a drug safety incident, a People's Government of county level and above shall forthwith organize countermeasures in accordance with the emergency plan; the relevant organization shall forthwith adopt effective measures to handle the matter and prevent escalation.

　　Article 109 Where a drug administrative department fails to discover systemic risks of drug safety promptly or fails to eliminate drug safety hazards within their supervision and administration region promptly, the People's Government or the drug administrative department of the higher-level People's Government shall schedule an interview with the person- in-charge of the drug administrative department.

　　Where a local People's Government fails to perform drug safety duties or fails to eliminate regional serious drug safety hazards promptly, the higher-level People's Government or the drug administrative department of the higher-level People's Government shall schedule an interview with the person-in-charge of the local People's Government.

　　The department and the local People's Government shall forthwith adopt measures to rectify drug supervision and administration work.

　　The scheduled interview and the rectification shall be included in the drug supervision and administration work review and appraisal records of the relevant department and the local People's Government.

　　Article 110 A local People's Government and its drug administrative departments shall not use means such as requiring implementation of drug inspection, examination and approval etc to restrict or exclude drugs of non-local MAHs or drug manufacturing enterprises from entering the locality.

　　Article 111 The drug administrative departments and the professional technical organizations for drugs established or appointed by the drug administrative departments shall not participate in drug manufacturing and business activities, and shall not recommend or supervise drug manufacturing and sale in their capacity.

　　Staff of the drug administrative departments and the professional technical organizations for drugs established or appointed by the drug administrative departments shall not participate in drug manufacturing and business activities.

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

　　Article 113 Upon discovery of a drug violation which allegedly constitutes a criminal offence, the drug administrative departments shall promptly forward the case to the public security authorities.

　　Where it is not necessary to pursue criminal liability pursuant to the law or criminal punishment is not required pursuant to the law, but it is necessary to pursue administrative liability, the public security authorities, the People's Procuratora te and the People's Court shall promptly forward the case to the drug administrative departments.

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

Chapter 11 Legal Liability

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

　　Article 115 Offenders who engage in drug manufacturing and sale without obtaining a drug manufacturing Certificate, drug business permit or medical institution preparation permit shall be ordered to close down, the drugs and illegal income from the illegal manufacturing and sale shall be confiscated, and a fine ranging from 15 times to 30 times of the value of the drugs from the illegal manufacturing and sale (including sold and unsold drugs, same hereinafter) shall be imposed simultaneously; where the value of the drugs is less than RMB100,000, the fine shall be computed in accordance with RMB100,000.

　　Article 116 For manufacturing and sale of fake drugs, the drugs and illegal income from the illegal manufacturing and sale shall be confiscated, and the offender shall be ordered to suspend manufacturing and distribution and make correction, the drug approval certificate shall be revoked, and a fine ranging from 15 times to 30 times of the value of the drugs from the illegal manufacturing and sale shall be imposed simultaneously; where the value of the drugs is less than RMB100,000, the fine shall be computed in accordance with RMB100,000; in serious cases, the drug manufacturing permit, drug business permit or medical institution preparation permit shall be revoked, and the drug administrative authorities shall not accept an application from the offender within the next 10 years; where the drug marketing permit holder is an overseas enterprise, its drugs shall be banned from importation for the next 10 years.

　　Article 117 For manufacturing and sale of inferior drugs, the drugs and illegal income from the illegal manufacturing and sale shall be confiscated, and a fine ranging from 10 times to 20 times of the value of the drugs from the illegal manufacturing and sale shall be imposed simultaneously; where the value of the drugs from the illegal manufacturing and wholesale is less than RMB100,000, the fine shall be computed in accordance with RMB100,000; where the value of the drugs from the illegal retail is less than RMB10,000, the fine shall be computed in accordance with RMB10,000; in serious cases, the offender shall be ordered to suspend manufacturing and distribution, and the drug approval certificate, drug manufacturing permit, drug business permit or medical institution preparation permit may be revoked.

　　For manufacturing and sale of traditional Chinese medicine preparations which do not comply with drug standards but there is no impact on safety or effectiveness, the offender shall be ordered to make correction within a stipulated period, and be given a warning; and may be subject to a fine ranging from RMB100,000 to RMB500,000.

　　Article 118 For manufacturing and sale of fake drugs, or manufacturing and sale of inferior drugs where the case is serious, the income derived by the legal representative, the principal responsible person, the persons directly in charge and the other persons responsible from the entity during the period of occurrence of the illegal act shall be confiscated, a fine ranging from 30% to 300% of the income shall be imposed on these individuals simultaneously, and they shall be banned permanently from engaging in drug manufacturing and business activities and may be detained by the public security authorities for five days to 15 days.

　　The active drug ingredients, excipients, packaging materials and manufacturing equipment used by the manufacturers for manufacturing of fake drugs or inferior drugs shall be confiscated.

　　Article 119 Organizations using drugs which use fake drugs or inferior drugs shall be punished pursuant to the provisions on sale of fake drugs and retail of inferior drugs; in serious cases, where the legal representative, the principa l responsible person, the persons directly in charge and the other persons responsible hold a medical and health practitioner certificate, the practitioner certificate shall be revoked.

　　Article 120 Where a person facilitates storage or transportation when he/she is or should be aware that the drugs are fake drugs or inferior drugs or fall under item (1) to item (5) of the first paragraph of Article 124 of this Law, all storag e and transportation income shall be confiscated and a fine ranging from one to five times the amount of illegal income shall be imposed simultaneously; in serious cases, a fine ranging from five to 15 times the amount of illegal income shall be imposed simultaneously; where the amount of illegal income is less than RMB50,000, the fine shall be computation in accordance with RMB50,000.

　　Article 121 The punishment decision on fake drugs or inferior drugs shall state the quality inspection conclusion of the drug inspection agency pursuant to the law.

　　Article 122 For forgery, alteration, lease, borrowing, illegal sale and purchase of permit or drug approval certificate, illegal income shall be confiscated and a fine ranging from one to five times the amount of illegal income shall be imposed simultaneously; in serious cases, a fine ranging from five to 10 times the amount of illegal income shall be imposed simultaneously, the drug manufacturing permit, drug business permit, medical institution preparation permit or drug approval certificate shall be revoked,the legal representative, and the principal responsible person, the persons directly in charge and the other persons responsible shall be subject to a fine ranging from RMB20,000 to RMB200,000, banned from engaging in  drug manufacturing and business activities for the next 10 years, and may be detained by the public security authorities for five days to 15 days; where the amount of illegal income is less than RMB100,000, the fine shall be computation in accordance with RMB100,000.

　　Article 123 Where an entity provides false certificate, data, materials, samples or adopts other measures to obtain a clinical trial permit, drug manufacturing permit, drug business permit, medical institution preparation permit or drug registration certificate fraudulently, the relevant permit shall be revoked, and it shall be banned from submitting the corresponding application for the next 10 years and shall be subject to a fine ranging from RMB500,000 to RMB5 million simultaneously; in serious cases, the legal representative, the key person-in-charge, the directly-accountable person-in- charge and other directly-accountable personnel shall be subject to a fine ranging from RMB20,000 to RMB200,000, and banned from engaging in drug manufacturing and business activities for the next 10 years, and may be detained by the public security authorities for five days to 15 days.

　　Article 124 For any of the following violations of this Law, the drugs and illegal income from illegal manufacturing, importation and sale as well as the active drug ingredients, excipients, packaging materials and manufacturing equipment used specifically for  illegal manufacturing shall be confiscated, and the offender  shall be ordered to suspend manufacturing and distribution and make correction, and simultaneously be subject to a fine ranging from 15 times to 30 times the value of the drugs which are illegally manufactured, imported or sold; where the value of the drugs is less than RMB100,000, the fine shall be computed in accordance with RMB100,000; in serious cases, the drug approval certificate shall be revoked, and the drug manufacturing permit, drug business permit or medical institution preparation permit may be revoked; the income derived by the legal representative, the principal responsible person, the persons directly in charge and the other persons responsible from the entity during the period of occurrence of the illegal act shall be confiscated, a fine ranging from 30% to 300% of the income shall be imposed on these individuals simultaneously, and they shall be banned from engaging in drug manufacturing and business activities for the next 10 years or permanently, and may be detained by the public security authorities for five days to 15 days:

　　(1)manufacturing or importation of drugs without obtaining a drug approval certificate;

　　(2)manufacturing or importation of drugs with a fraudulently obtained drug approval certificate;

　　(3)use of active drug ingredients which have not been reviewed and approved for drug manufacturing;

　　(4)sale of drugs which has not been inspected as required;

　　(5)manufacturing and sale of drugs prohibited by the drug administrative department of the State Council;

　　(6)fabrication of manufacturing, inspection records; or

　　(7)making significant change in the drug manufacturing process without approval.

　　For sale of drugs stipulated in item (1) to item (3) of the preceding paragraph, or use of drugs stipulated in item (1) to item (5) of the preceding paragraph by organizations using drugs, the offender shall be punished pursuant to the provisions of the preceding paragraph; in serious cases, where the legal representative, the principal responsi ble person, the persons directly in charge and the other persons responsible of the organization using drugs hold a medical practitioner certificate, the medical practitioner certificate shall also be revoked.

　　Punishment imposed on offenders who import without approval small quantities of drugs which have been legitimately launched in overseas market may be reduced or exempted in lesser cases.

　　Article 125 For any of the following violations of this Law, the drugs and illegal income from illegal manufacturing and sale, as well as packaging materials and containers thereof shall be confiscated, and the offender shall be ordered to stop manufacturing and distribution and make correction, and be subject to a fine ranging from RMB500,000 to RMB5 million simultaneously; in serious cases, the drug approval certificate, drug manufacturing permit, drug business permit shall be revoked, the legal representative, the principal responsible person, the persons directly in charge and the other persons responsible shall be subject to a fine ranging from RMB20,000 to RMB200,000 and may be banned 10 years or permanently from drug manufacturing and business activities:

　　(1)conduct drug clinical trial without approval;

　　(2)use packing materials or containers which come into direct contact with drugs when they have not been examined and approved for drug manufacturing, or sell such drugs; or

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

　　Article 126 Unless otherwise stipulated in this Law, drug marketing authorization holders, drug manufacturing enterprises, drug business enterprises, drug non-clinical safety evaluation research institutes, drug clinical trial organizations which do not comply with drug manufacturing quality management norms,  drug business quality management norms, drug non-clinical study quality management norms, drug clinical trial quality management norms etc shall be ordered to make correction within a stipulated period and be given a warning; where correction is not made within the stipulated period, a fine ranging from RMB100,000 to RMB500,000 shall be imposed; in serious cases, the offender shall be subject to a fine ranging from RMB500,000 to RMB2 million, and ordered to suspend manufacturing and distribution and make correction, and the drug approval certificate, drug manufacturing permit, drug business permit etc may be revoked; the drug non-clinical safety evaluation research institute, the drug clinical trial organization shall be banned from conducting drug non- clinical safety evaluation study or drug clinical trial for the next five years, the income of the legal representative, the principal responsible person, the persons directly in charge and the other persons responsible derived from the entity during the period of occurrence of the illegal act shall be confiscated, a fine ranging from 10% to 50% of the income shall be imposed on these individuals simultaneously, and they shall be banned from engaging in drug manufacturing and business activities for 10 years to permanently.

　　Article 127 For any of the following violations of this Law, the offender shall be ordered to make correction within a stipulated period and be given a warning; where correction is not made within the stipulated period, a fine ranging from RMB100,000 to RMB500,000 shall be imposed:

　　(1)conduct bioequivalence test without completing filing formalities;

　　(2)during the drug clinical trial period, the clinical trial applicant fails to promptly adjust the clinical trial plan, suspend or terminate clinical trial, or fails to report to the drug administrative department of the State Council, upon discovery of safety issues or other risks;

　　(3)fail to establish and implement a drug tracking system pursuant to the provisions;

　　(4)fail to submit annual report pursuant to the provisions;

　　(5)fail to complete filing or reporting formalities for changes in the drug manufacturing pursuant to the provisions;

　　(6)fail to formulate a risk management plan after launch of drugs to market; or

　　(7)fail to carry out drug post-marketing launch study or post-marketing launch appraisal pursuant to the provisions.

　　Article 128 In addition to punishment for offences pertaining to fake drugs, inferior drugs pursuant to the law, where the drug packaging does not print or affix label, packaging insert is not included pursuant to the provisions, or where the literature does not include the relevant information or the stipulated mark pursuant to the provisions, the offender shall be ordered to make correction and be given a warning; in serious cases, the drug registration certificate shall be revoked.

　　Article 129 Where a drug marketing authorization holder, drug manufacturing enterprise, drug business enterprise or medical institution violates the provisions of this Law in failure to procure drugs from a drug marketing authorization holder or an enterprise which has drug manufacturing or distribution qualification, it shall be ordered to make correction, the illegally procured drugs and the illegal income shall be confiscated, and a fine ranging from 2 to 10 times the value of the illegally procured drugs shall be imposed simultaneously; in serious cases, a fine ranging from 10 to 30 times the value of the drugs shall be imposed simultaneously, and the drug approval certificate, drug manufacturing permit, drug business permit or medical institution practice permit shall be revoked; where the value of the drugs is less than RMB50,000, the fine shall be computed in accordance with RMB50,000.

　　Article 130 Where a drug business enterprise violates the provisions of this Law in failure to keep records for procurement and sale of drugs pursuant to the provisions, failure to state the usage, dosage of retail drugs correctly, or failure to fill prescriptions pursuant to the provisions, it shall be ordered to make correction and be given a warning; in serious cases, the drug business permit shall be revoked.

　　Article 131 Where a third party platform provider for online drug transactions violates the provisions of this Law in failure to perform obligations such as examination of qualification, reporting, cessation of online transaction platform services etc, it shall be ordered to make correction, illegal income shall be confiscated, and a fine ranging from RMB200,000 to RMB2 million shall be imposed simultaneously; in serious cases, the third party platform provider shall be ordered to suspend operation and make correction and be subject to a fine ranging from RMB2 million to RMB5 million simultaneously.

　　Article 132 For importation of drugs for which a drug registration certificate is obtained, where the importer fails to file records with the drug administrative authorities at the approved importing port pursuant to the provisions, it shall be ordered to make correction within a stipulated period and be given a warning; where correction is not made within the stipulated period, the drug registration certificate shall be revoked.

　　Article 133 Where a medical institution violates the provisions of this Law in selling formulations prepared by the medical institution on the market, it shall be ordered to make correction, the formulations and illegal income from illegal sale shall be confiscated, and a fine ranging from two to five times the value of the illegally sold formulations shall be imposed simultaneously; in serious cases, a fine ranging from five to 15 times the value of the formulation s shall be imposed simultaneously; where the value of the formulations is less than RMB50,000, the fine shall be computed in accordance with RMB50,000.

　　Article 134 Where a drug marketing authorization holder fails to monitor adverse reactions to drugs or report suspected adverse reactions to drugs pursuant to the provisions, it shall be ordered to make correction within a stipulated period and be given a warning; where correction is not made within the stipulated period, it shall be ordered to suspend manufacturing and distribution and make correction, and be subject to a fine ranging from RMB100,000 to RMB1 million simultaneously.

　　Where a drug business enterprise fails to report suspected adverse reactions to drugs pursuant to the provisions, it shall be ordered to make correction within a stipulated period and be given a warning; where correction is not made within the stipulated period, it shall be ordered to suspend manufacturing and distribution and make correction, and a fine ranging from RMB50,000 to RMB500,000 shall be imposed simultaneously.

　　Where a medical institution fails to report suspected adverse reactions to drugs, it shall be ordered to make correction within a stipulated period and be given a warning; where correction is not made within the stipulated period, a fine ranging from RMB50,000 to RMB500,000 shall be imposed.

　　Article 135 Where a drug marketing authorization holder is ordered by the drug administrative department of the People's Government of the province, autonomous region or centrally-administered municipality to recall drugs but refuses to do so, it shall be subject to a fine ranging from five to 10 times the value of the drugs to be recalled; where the value of the drugs is less than RMB100,000, the fine shall be computed in accordance with RMB100,000; in serious cases, the drug approval certificate, drug manufacturing permit or drug business permit shall be revoked; the legal representative, the principal responsible person, the persons directly in charge and the other perso ns responsible shall be subject to a fine ranging from RMB20,000 to RMB200,000. Where a drug manufacturing enterprise, drug business enterprise or medical institution refuses to cooperate in the recall of drugs, it shall be subject to a fine ranging from RMB100,000 to RMB500,000.

　　Article 136 Where the drug marketing authorization holder is an overseas enterprise, and the enterprise legal person in China appointed by the drug marketing permit holder does not perform the relevant obligations pursuant to the provisions of this Law, the provisions of this Law on the legal liability of drug marketing permit holder shall apply.

　　Article 137 Any of the following acts shall be subject to the heavier punishment within the range of punishment stipulated in this Law:

　　(1)passing narcotics, psychotropic substances, medicinal toxic drugs and radioactive drugs off as other drugs or vice versa;

　　(2)producing or selling counterfeit or substandard drugs of which the main users are pregnant and parturient women, infants and children;

　　(3)manufacturing and sale of biological products which are fake drugs or inferior drugs;

　　(4)manufacturing and sale of fake drugs or inferior drugs which cause personal injuries;

　　(5)repeat offence in manufacturing and sale of fake drugs or inferior drugs; or

　　(6)refuse or evade supervision and inspection, forgery, mutilation or concealment of the relevant evidential materials, or use seized or confiscated items without authorization.

　　Article 138 Where a drug inspection agency issues false inspection reports, it shall be ordered to make correction and be given a warning, and the drug inspection agency shall be subject to a fine ranging from RMB200,000 to RMB1 million simultaneously; the persons directly in charge and the other persons responsible shall be demoted, removed or dismissed pursuant to the law, illegal income shall be confiscated, and a fine of less than RMB50,000 shall be imposed simultaneously; in serious cases, the inspection qualification shall be revoked. Where the inspection conclusion issued by a drug inspection agency is untrue and causes damages, it shall bear the corresponding compensation liability.

　　Article 139 Administrative punishment stipulated in Article 115 to Article 138 of this Law shall be decided by the drug administrative departments of People's Governments of county level and above in accordance with division of work; revocation of permit or certificate shall be decided by the issuing authorities of the permit or certificate.

　　Article 140 Where a drug marketing authorization holder, drug manufacturing enterprise, drug business enterprise or medical institution violates the provisions of this Law in staff recruitment, the drug administrative authorities or the health administrative authorities shall order the drug marketing authorization holder, drug manufacturing enterprise, drug business enterprise or medical institution to dismiss the staff, and impose a fine ranging from RMB50,000 to RMB200,000 thereon.

　　Article 141 Where a drug marketing authorization holder, drug manufacturing enterprise, drug business enterprise or medical institution gives or receives rebates or other improper gains in the drug procurement and sale process, or the drug marketing authorization holder, drug manufacturing enterprise, drug business enterprise or its agent gives monies or other improper gains to the person(s)-in-charge, drug procurement staff, physicians, pharmacists etc of medical institutions using their drugs, the market regulatory department shall confiscate the illegal income and impose a fine ranging from RMB300,000 to RMB3 million simultaneously; in serious cases, the business license of the drug marketing authorization holder, drug manufacturing enterprise and drug business enterprise shall be revoked; the drug approval certificate, drug manufacturing permit and drug business permit shall be revoked by the drug administrative authorities.

　　Where a drug marketing authorization holder, drug manufacturing enterprise or drug business enterprise bribes State officials in drug research and development process or drug manufacturing and distribution, the legal representative, the principal responsible person, the persons directly in charge and the other persons responsible shall be banned permanently from engaging in drug manufacturing and business activities.

　　Article 142 Where the person(s)-in-charge, procurement staff etc of a drug marketing authorization holder, drug manufacturing enterprise or drug business enterprise receives monies or other improper gains in drug procurement and sale process from other drug marketing permit holders, drug manufacturing enterprises, drug business enterprises or their agents, the illegal income shall be confiscated and punishment shall be imposed pursuant to the law; in serious cases, such individuals shall be banned from engaging in drug manufacturing and business activities for the next five years.

　　Where the person(s)-in-charge, drug procurement staff, physicians, pharmacists etc of a medical institution receives monies or other improper gains from a drug marketing authorization holder, drug manufacturing enterprise, drug business enterprise or its agent, the competent health administrative authorities or the medical institution shall impose punishment and confiscate the illegal income; in serious cases, their practitioner certificate shall be revoked.

　　Article 143 Persons who violate the provisions of this Law in fabricating or disseminating false drug safety information, where the offence constitutes a violation of security administration, the public security authorities shall impose security administration punishment pursuant to the law.

　　Article 144 Where a drug marketing authorization holder, drug manufacturing enterprise, drug business enterprise or medical institution violates the provisions of this Law and causes damages to users of their drugs, it shall bear compensation liability pursuant to the law.

　　Victims who suffer damages due to drug quality issues may seek compensation from the drug marketing permit holder and the drug manufacturing enterprise, and may also seek compensation from the drug business enterprise and medical institution. Upon receipt of compensation claim from a victim, the entity shall compensate first; after the compensation, it may seek recovery on the compensation pursuant to the law.

　　For manufacturing fake drugs or inferior drugs or engaging in sale or use of fake drugs or inferior drugs knowingly, in addition to seeking compensation, the victims or their immediate family members may also seek indemnity based on 10 times of the payment amount or three times of the damages; where the additional compensation amount is less than RMB1,000, it shall be rounded up to RMB1,000.

　　Article 145 Where a drug administrative department or the professional technical organization for drugs established or appointed by the drug administrative department participate in drug manufacturing and business activities, it shall be ordered by its higher-level competent administrative department to make correction, and its illegal income shall be confiscated; in serious cases, the directly-accountable person-in-charge and other directly-accountable personnel shall be punished pursuant to the law.

　　Where the staff of a drug administrative department or the professional technical organization for drugs established or appointed by the drug administrative department participate in drug manufacturing and business activities, they shall be punished pursuant to the law.

　　Article 146 Where a drug administrative department or the drug inspection agency established or appointed by the drug administrative department collects inspection fees illegally for supervision and inspection of drugs, the relevant government department shall order it to make refund, and punish the directly-accountable person-in-charge and other directly-accountable personnel pursuant to the law; in serious cases, the inspection qualification shall be revoked.

　　Article 147 Where a drug administrative department violates the provisions of this Law in committing any of the following acts, the relevant permit shall be revoked, and the persons directly in charge and the other persons responsible shall be punished pursuant to the law:

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

　　(2)issues drug registration certificates for drugs which do not satisfy the criteria; or

　　(3)issues drug manufacturing permit, drug business permit or medical institution preparation permit to organizations which do not satisfy the criteria.

　　Article 148 Where a People's Government of county level and above violates the provisions of this Law in committing any of the following acts, the persons directly in charge and the other persons responsible shall be given a demerit or serious demerit;

　　in serious cases, such individuals shall be demoted, removed or dismissed:

　　(1)conceal, delay or omit reporting of drug safety incident or make false reporting of drug safety incident;

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

　　(3)incompetent performance of duties which causes serious adverse impact or serious losses.

　　Article 149 Where a drug administrative department etc violates the provisions of this Law in committing any of the following acts, the persons directly in charge and the other persons responsible shall be recorded a demerit or serious demerit; in relatively serious cases, such individuals shall be demoted or removed; in serious cases, such individual shall be dismissed:

　　(1)conceal, delay, omit or make false reporting of drug safety incident;

　　(2)fail to promptly investigate and deal with a drug safety violation upon discovery of such violation;

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

　　(4)fail to perform drug supervision and administration duties, resulting in serious adverse impact or serious losses.

　　Article 150 Drug supervision and administration officers guilty of abusing official powers, corruption and practicing favoritism, dereliction of duties shall be punished pursuant to the law.

　　Where the directly-accountable person-in-charge and other directly-accountable personnel of a drug administrative department commit dereliction of duties or malfeasance in the investigation and punishment of illegal acts involving fake drugs or inferior drugs, they shall be subject to heavy punishment pursuant to the law.

　　Article 151 The value of goods stipulated in this Chapter shall be computed in accordance with the pricing of the illegally manufactured and sold drugs; where there is no pricing, the computation shall be based on the market prices of the same type of drugs.

　　Chapter 12 Supplementary Provisions

　　Article 152 The cultivation, harvest and feeding of Chinese herbal medicine shall be regulated in accordance with provisions of applicable laws and administrative regulations.

　　Article 153 Measures for the management of the folk crude drugs customarily used in certain regions shall be provided by the drug administrative department together with the competent department for traditional Chinese medicines under the State Council.

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

　　Article 155 This Law shall be implemented with effect from 1 December 2019.