Drug Administration Law of the People's Republic of China (Revised in 2015) 

Order of the President of the People's Republic of China No.27

April 24, 2015

(Adopted at the Seventh Meeting of the Standing Committee of the Sixth National People's Congress on September 20, 1984
Revised at the 20th Meeting of the Standing Committee of the Ninth National People's Congress on February 28, 2001
Revised according to the Decision of the Standing Committee of the National People's Congress on Amending Seven Laws Including the Law of the People's Republic of China on the Protection of the Marine Environment at the 6th Meeting of the Standing Committee of the 12th National People's Congress on December 28, 2013
Revised according to the Decisions of the Standing Committee of the National People's Congress on Revising the Drug Administration Law of the People's Republic of China at the 14th Meeting of the Standing Committee of the 12th National People's Congress on April 24, 2015)

Contents
Chapter I General Provisions
Chapter II Administration over Drug Manufacturers
Chapter III Administration over Drug Distributors
Chapter IV Administration over Pharmaceuticals in Medical Institutions
Chapter V Administration over Drugs
Chapter VI Administration over Drug Packaging
Chapter VII Administration over Drug Pricing and Advertising
Chapter VIII Supervision over Drugs
Chapter IX Legal Liabilities
Chapter X Supplementary Provisions

Chapter I General Provisions

Article 1 The Drug Administration Law of the People's Republic of China (hereinafter referred to as the "Law") is enacted to strengthen drug supervision and administration, to ensure drug quality and safety for human beings, and to protect the health of the people and their legitimate rights and interests in the use of drugs.

Article 2 All entities and individuals engaged in research, production, distribution and use of, and supervision and administration over, drugs within the territory of the People's Republic of China shall abide by the Law.

Article 3 The State develops both modern and traditional medicines to give full play to their role in prevention and treatment of diseases and in maintenance of health.
The State protects the resources of natural crude drugs and encourages the cultivation of traditional Chinese drugs.

Article 4 The State encourages the research and development of new drugs and protects the legitimate rights and interests of citizens, legal persons and other organizations engaged in this field of endeavor.

Article 5 The drug regulatory department under the State Council is responsible for drug supervision and administration nationwide. The relevant departments under the State Council are responsible for the supervision and administrative work related to drugs within the limits of their duties.
The drug regulatory departments of the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government are responsible for drug supervision and administration in their respective administrative areas. The relevant departments of the said people's governments are responsible for the supervision and administrative work related to drugs within the limits of their duties.
The drug regulatory department under the State Council shall cooperate with the competent department for comprehensive economic administration under the State Council in implementing pharmaceutical development programs and policies formulated by the State for the pharmaceutical industry.

Article 6 The drug testing institutions established or designated by drug regulatory departments undertake the responsibility for drug testing required for conducting drug review and approval and supervising and inspecting drug quality in accordance with the law.

Chapter II Administration over Drug Manufacturers

Article 7 The establishment of a drug manufacturer shall be subject to the approval from the drug regulatory department of the people's government of the province, autonomous region or municipality directly under the Central Government where the manufacturer to be established is located and be granted a Drug Manufacturing Certificate, without which no one is allowed to manufacture drugs.
The valid term and the scope of manufacturing shall be indicated in a Drug Manufacturing Certificate. For renewal of the certificate upon expiration, reexamination is required.
When giving approval to the establishment of a drug manufacturer, the drug regulatory department shall see to it that, apart from the requirements specified by the provisions in Article 8 of the Law that shall be met, the pharmaceutical development programs and policies formulated by the State for the pharmaceutical industry are complied with so as to prevent duplicate construction.


Article 8 A drug manufacturer to be established shall meet the following requirements:
1. having legally qualified pharmaceutical and engineering professionals, and the corresponding technical workers;
2. having the premises, facilities, and hygienic environment required for drug manufacturing;
3. having the institutions and personnel capable of quality management and testing for drugs to be produced thereby and the necessary instruments and equipment; and
4. having rules and regulations to ensure the quality of drugs.


Article 9 Drug manufacturers shall conduct production in accordance with the Good Manufacturing Practice for Drugs formulated by the drug regulatory department under the State Council based on the Law. The drug regulatory departments shall inspect a drug manufacturer for its compliance with the requirements of the Good Manufacturing Practice for Drugs in accordance with the relevant provisions and issue a certificate to the manufacturer passing the inspection.
The specific measures and schedule for implementing the Good Manufacturing Practice for Drugs shall be formulated by the drug regulatory department under the State Council.

Article 10 With the exception of the processing of prepared slices of traditional Chinese drugs, a drug shall be produced in conformity with the national drug standards and with the production processes approved by the drug regulatory department under the State Council, and the production records shall be complete and accurate. When drug manufacturers make any change in the production process that may affect the drug quality, they shall submit the change for examination and approval to the original approval authority.
Prepared slices of traditional Chinese drugs shall be processed in conformity with the national drug standards. Those not covered by the national drug standards shall be processed in accordance with the processing norms formulated by the drug regulatory departments of the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government. The said processing norms shall be submitted to the drug regulatory department under the State Council for the record.

Article 11 The crude materials and accessories for manufacturing drugs shall meet the requirements for medicinal use.

Article 12 Drug manufacturers shall perform quality test of the drugs produced thereby; no drugs that do not meet the national drug standards or that are not produced in accordance with the processing norms for the prepared slices of traditional Chinese drugs formulated by the drug regulatory departments of the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government may be released from the plants.

Article 13 A drug manufacturer may accept the commission to produce drugs upon approval from the drug regulatory department of the people's government of the relevant province, autonomous region, or municipality directly under the Central Government.



Chapter III Administration over Drug Distributors

Article 14 The establishment of a drug wholesaler shall be subject to approval from and be granted a Drug Distribution Certificate by the drug regulatory department of the people's government of the province, autonomous region or municipality directly under the Central Government where the wholesaler to be established is located; the establishment of a drug retailer shall be subject to approval from and be granted a Drug Distribution Certificate by the local drug regulatory department at or above the country level. No one is allowed to distribute drugs without a Drug Distribution Certificate.
The valid term and the scope of business shall be indicated in a Drug Distribution Certificate. For renewal of the certificate upon expiration, reexamination is required.
When giving approval to the establishment of a drug distributor, the drug regulatory departments shall see to it that, apart from the requirements specified by the provisions in Article 15 of the Law that shall be met, the principles of appropriate location and convenient purchase of drugs by the people are adhered to.


Article 15 A drug distributor to be established shall meet the following requirements:
1. having legally qualified pharmaceutical professionals;
2. having the business premises, equipment, warehouses and hygienic environment required for drug distribution;
3. having the institutions or personnel for quality management for the drugs to be distributed; and
4. having rules and regulations to ensure the quality of the drugs to be distributed.


Article 16 Drug distributors shall conduct drug distribution in accordance with the Good Distribution Practice for Drugs formulated by the drug regulatory department under the State Council based on the Law. The drug regulatory departments shall inspect a drug distributor for its compliance with the requirements of the Good Distribution Practice for Drugs, and issue a certificate to the distributor passing the inspection.
The specific measures and schedule for implementing the Good Distribution Practice for Drugs shall be formulated by the drug regulatory department under the State Council.

Article 17 For purchase of drugs, drug distributors shall establish and apply an examination and acceptance system for the drugs to be purchased, and check the certificate of drug quality and other marks; no drug that fails to meet the prescribed requirements may be purchased.

Article 18 When purchasing and selling drugs, drug distributors shall keep authentic and complete records of purchase and sale, wherein the common name, dosage form, specification, batch number, term of validity, manufacturer, purchaser (or seller), amount of the drugs purchased (or sold), purchase or sale price, date of purchase (or sale), and other items about the drugs specified by the drug regulatory department under the State Council shall be indicated.

Article 19 Drug distributors shall sell drugs correctly without errors and make a correct description of usage, dosage and cautions; prescriptions being dispensed shall be checked, and no drugs listed therein may be changed or substituted without authorization. They shall refuse to dispense incompatible or over-dose prescriptions; when necessary, they may do so only after corrections or re-signing by the prescribing physicians.
Drug distributors shall indicate the origin of the traditional Chinese drugs to be sold.

Article 20 A drug distributor shall establish and apply a system for drug storage, and take necessary measures to ensure the quality of drugs, such as cold storage, protection against freeze and humidity and avoidance of insects and rodents.
An examination system shall be applied for placing drugs in and releasing them from storage.

Article 21 Traditional Chinese drugs may be sold on urban and rural trade markets, except as otherwise specified by the State Council.
No drugs other than the traditional Chinese drugs may be sold on urban and rural trade markets, but drug retailers holding a Drug Distribution Certificate may, within the specified scope, sell such drugs at stores they set up on the urban and rural trade markets. Specific measures therefor shall be formulated by the State Council.

Chapter IV Administration over Pharmaceuticals in Medical Institutions

Article 22 A medical institution shall be staffed with legally qualified pharmaceutical professionals. No one other than a pharmaceutical professional is allowed to directly engage in technical work in pharmacy.

Article 23 To dispense pharmaceutical preparations, a medical institution shall be subject to examination and approval by the administrative department for health of the people's government of the province, autonomous region or municipality directly under the Central Government where the medical institution is located, and upon approval by the drug regulatory department of the said people's government, a Pharmaceutical Preparation Certificate for Medical Institution shall be issued to the medical institution. No one is allowed dispense pharmaceutical preparations without a Pharmaceutical Preparation Certificate for Medical Institution.
The valid term shall be indicated in a Pharmaceutical Preparation Certificate for Medical Institution. For renewal of the certificate upon expiration, reexamination is required.

Article 24 To dispense pharmaceutical preparations, a medical institution shall have the facilities, management system, testing instruments and hygienic conditions for ensuring their quality.

Article 25 The pharmaceutical preparations to be dispensed by a medical institution shall be those meeting the clinic need of the institution but not available on the market and shall be subject to prior approval from the drug regulatory department of the people's government of the province, autonomous region or municipality directly under the Central Government where the medical institution is located. The dispensed pharmaceutical preparations shall be subject to a quality test in accordance with the relevant provisions; those passing the test may be used within the medical institution based on the physician's prescription. In special cases, the pharmaceutical preparations dispensed by a medical institution may be used by other designated medical institutions, upon approval from the drug regulatory department under the State Council or by the drug regulatory department of the people's government of the province, autonomous region or municipality directly under the Central Government.
No pharmaceutical preparations dispensed by medical institutions may be marketed.

Article 26 For purchase of drugs, medical institutions shall establish and apply an examination and acceptance system for the drugs to be purchased, and check the certificate of drug quality and other marks; no drugs that do not meet the specified requirements may be purchased or used.

Article 27 Prescriptions being dispensed by pharmacists of medical institutions shall be checked, and no drug listed therein may be changed or substituted without authorization. The pharmacists shall refuse to dispense incompatible or over-dose prescriptions; when necessary, they may do so only after corrections or re-signing by the prescribing physicians.

Article 28 A medical institution shall establish and apply a system for drug storage, and take necessary measures to ensure the quality of drugs, such as cold storage, protection against freeze and humidity and avoidance of insects and rodents.

Chapter V Administration over Drugs

Article 29 The dossier on the research and development of a new drug including the research and development methods, quality indicators and results of pharmacological and toxicological tests, and samples shall, in accordance with the provisions of the drug regulatory department under the State Council, be truthfully submitted to the said department for approval before clinical trial is conducted. Measures for verifying the qualifications of clinical trial institutions for drugs shall be formulated jointly by the drug regulatory department and the administrative department for health under the State Council.
When a new drug has gone through clinical trials and passed the examination and approval, a new drug certificate shall be issued upon approval from the drug regulatory department under the State Council.


Article 30 The institutions for non-clinical safety evaluation and study and clinical trial institutions shall respectively implement the good practices of non-clinical drug research and good practices of clinical drug trials.
The good practices of non-clinical drug research and good practices of clinical drug trials shall be formulated by the department designated by the State Council.

Article 31 Production of a new drug or a drug admitted by national drug standards shall be subject to approval from the drug regulatory department under the State Council, and a drug approval number shall be issued for it, with the exception of the traditional Chinese drugs and the prepared slices of traditional Chinese drugs for which no control by approval numbers is exercised. The list of the traditional Chinese drugs and the prepared slices of the traditional Chinese drugs to be controlled by approval numbers shall be complied by the drug regulatory department under the State Council in concert with the administrative department for traditional Chinese medicines under the State Council.
A drug manufacturer may produce a drug only after an approval number is granted to it.

Article 32 Drugs shall meet the national drug standards. The provisions in Paragraph 2 of Article 10 of the Law apply to the prepared slices of traditional Chinese drugs.
The Pharmacopoeia of the People's Republic of China and the drug standards issued by the drug regulatory department under the State Council shall serve as the national drug standards.
The drug regulatory department under the State Council shall organize a pharmacopoeia commission, which is responsible for formulating and revising the national drug standards.
The drug testing institution affiliated to the drug regulatory department under the State Council is responsible for defining the national drug standard substance and reference substance.

Article 33 The drug regulatory department under the State Council shall organize experts in pharmaceutical, medical and other fields to evaluate new drugs and re-evaluate the drugs having already been approved for production.

Article 34 Drug manufacturers, drug distributors and medical institutions shall purchase drugs from enterprises which are qualified for drug production or distribution, with the exception of the traditional Chinese drugs for which no control by approval numbers is exercised.

Article 35 The State exercises special control over narcotic drugs, psychotropic substances, medicinal toxic drugs and radioactive pharmaceuticals. Measures therefor shall be formulated by the State Council.

Article 36 The State adopts a protection system for certain traditional Chinese medicines. Specific measures therefor shall be formulated by the State Council.

Article 37 The State adopts a classification system for prescription and non-prescription drugs. Specific measures therefor shall be formulated by the State Council.

Article 38 The import of drugs with uncertain therapeutic efficacy, serious adverse reaction, or other factors harmful to human health is prohibited.

Article 39 Evaluation of drugs to be imported shall be organized by the drug regulatory department under the State Council. A drug may be imported only upon approval granted after the fact that it conforms to the quality standards and is safe and effective is affirmed through examination, and an import drug license shall be issued.
As to small amounts of drugs to be imported for urgent clinical need of medical institutions or for personal medication, formalities for import shall be completed in accordance with the relevant provisions of the State.

Article 40 Drugs shall be imported via the ports where drug importation is permitted, and be registered by the drug importers with the drug regulatory departments in the places where the ports are located for the record. The customs shall release the drugs based on the Drug Import Note issued by the said departments, and may not release those drugs for which no Drug Import Note is issued.
The drug regulatory departments in the places where the ports are located shall notify the drug testing institutions to conduct sampling and testing of the drugs to be imported in accordance with the provisions of the drug regulatory department under the State Council, and charge testing fees in accordance with the provisions of Paragraph 2 of Article 41 of the Law.
The ports where drugs may be imported shall be proposed by the drug regulatory department under the State Council in concert with the General Administration of Customs and submitted to the State Council for approval.

Article 41 The drug regulatory department under the State Council shall designate drug testing institutions to test the following drugs before they are marketed or at the time they are imported; no drugs that fail to pass the testing may be marketed or imported:
1. biological products specified by the drug regulatory department under the State Council;
2. drugs to be marketed in China for the first time; and
3. other drugs specified by the State Council.
The testing items to be charged for the drugs listed in the preceding paragraph and the charging rates shall be ratified and publicized by the financial department under the State Council in concert with the competent price department under the State Council. Measures for collecting fees for testing shall be formulated by the financial department under the State Council in concert with the drug regulatory department under the State Council.


Article 42 The drug regulatory department under the State Council shall organize the investigation of the drugs having already been approved for production or importation; and shall withdraw the approval numbers or import drug licenses issued to drugs with uncertain therapeutic efficacy, serious adverse reaction, or other factors harmful to human health.
No drugs whose approval numbers or import drug licenses have been withdrawn may be produced, or imported, sold or used. Those having already been produced or imported shall be destroyed or disposed of under the supervision of the local drug regulatory departments.

Article 43 The State adopts a system for drug reserve.
When major disasters, epidemic situations or other emergencies occur in China, the department specified by the State Council may transfer drugs from the enterprises to meet the urgent need.

Article 44 The State Council has the power to restrict or prohibit the exportation of the drugs which are in short supply in China.

Article 45 Anyone who wishes to import or export narcotic drugs and psychotropic substances that fall within the scope specified by the State shall produce the Import License or Export License issued by the drug regulatory department under the State Council.

Article 46 The newly-discovered crude drugs or cultivated crude drugs introduced from abroad may be marketed only after examination and approval by the drug regulatory department under the State Council.

Article 47 Administrative measures for the folk crude drugs customarily used in certain regions shall be formulated by the drug regulatory department under the State Council in concert with the administrative department for traditional Chinese medicines under the State Council.

Article 48 Production (including dispensing, hereinafter the same) and distribution of counterfeit drugs are prohibited.
A drug is a counterfeit drug in either of the following cases:
1. the ingredients in the drug are different from those specified by the national drug standards; and
2. a non-drug substance is simulated as a drug or one drug is simulated as another.
A drug shall be treated as a counterfeit drug in any of the following cases:
1. its use is prohibited by the provisions of the drug regulatory department under the State Council;
2. it is produced or imported without approval, or marketed without being tested, as required by the Law;
3.it is deteriorated;
4. it is contaminated;
5. it is produced by using crude drugs without approval numbers as required by the Law; and
6. the indications or functions indicated are beyond the specified scope.

Article 49 Production and distribution of substandard drugs are prohibited.
A drug with content not up to the national drug standards is a substandard drug.
A drug shall be treated as a substandard drug in any of the following cases:
1. the term of validity is not indicated or is altered;
2. the batch number is not indicated or is altered;
3. it is beyond the term of validity;
4. no approval is obtained for the packaging material or container in direct contact with drugs;
5. colorants, preservatives, spices, flavorings or other accessories are added without authorization; and
6. other cases where the drug standards are not conformed to.

Article 50 A drug name listed in the national drug standards is a common name. Such a common name may not be used as a trademark of the drug.

Article 51 Staff members of drug manufacturers, drug distributors and medical institutions who are in direct contact with drugs shall undergo health checkup annually. No one who suffers from infectious diseases or any other diseases which may cause contamination to drugs is allowed engage in any work in direct contact with drugs.

Chapter VI Administration over Drug Packaging

Article 52 Packaging materials and containers in direct contact with drugs shall meet the requirements for medicinal use and the standards for ensuring human health and safety, and shall, along with the drugs, be subject to examination and approval by the drug regulatory departments.
No drug manufacturers may use packaging materials and containers in direct contact with drugs for which no approval is obtained.
If the packaging materials and containers in direct contact with drugs are not up to standard, the drug regulatory departments shall give orders stopping the use of such materials and containers.

Article 53 Drug packaging shall conform to drug quality requirements and be convenient for storage, transportation and medical use.
Traditional Chinese drugs shall be packed for transportation. On each package shall be indicated the name of the drug, the place of origin, the date and the name of the consignor, with a quality certification mark attached.

Article 54 A label shall be printed or stuck on the drug package together with an insert sheet, as required by provisions.
In the label or insert sheet shall be indicated the common name of the drug, its ingredients, specification, manufacturer, approval number, product batch number, production date, term of validity, indications or functions, usage, dosage, contraindications, adverse drug reactions, and precautions.
Specified marks shall be printed in the label of narcotic drugs, psychotropic substances, toxic drugs for medical use, radioactive pharmaceuticals, drugs for topical use, and non-prescription drugs.


Chapter VII Administration over Drug Pricing and Advertising

Article 55 For drugs the prices of which are adjustable with the market in accordance with the law, drug manufacturers, drug distributors and medical institutions shall fix the prices on the principles of fairness, rationality, good faith and commensuration of price with quality, in order to provide the users with drugs of reasonable prices.
When fixing and indicating retailing prices of drugs, drug manufacturers, drug distributors and medical institutions shall abide by the provisions on administration over drug prices formulated by the competent price department under the State Council. Usurious profits and fraud in pricing that harms the users' interests are prohibited.

Article 56 Drug manufacturers, drug distributors and medical institutions shall provide the actual buying and selling prices and quantity of the drugs purchased and sold, and other related data for the competent price departments of the government in accordance with the law.

Article 57 Medical institutions shall provide the patients with a list of prices of drugs used thereby; and the designated medical institutions for medical insurance shall also truthfully publicize the prices of drugs in common use in accordance with the specified measures, in order to strengthen reasonable use of drugs. Specific measures therefor shall be formulated by the administrative department for health under the State Council.

Article 58 Drug manufacturers, drug distributors and medical institutions are prohibited from offering or accepting, in private, off-the-book rake-offs or other benefits in the course of purchasing and selling drugs.
Drug manufacturers, drug distributors or their agents are prohibited from offering, in any name, money or things of value or other benefits to leading members, drug purchasers, physicians, or other related persons of the medical institutions where their drugs are used. Leading members, drug purchasers, physicians, or other related persons of medical institutions are prohibited from accepting, in any name, money or things of value or other benefits offered by drug manufacturers, drug distributors or their agents.

Article 59 Drug advertisements shall be subject to approval from the drug regulatory department of the people's government of the province, autonomous region or municipality directly under the Central Government where the enterprise is located, and an approval number of drug advertisement shall be issued. No one is allowed to launch any drug advertisement without an approval number.
Prescription drugs may be introduced in the medical or pharmaceutical professional publications jointly designated by the administrative department for health under the State Council and the drug regulatory department under the State Council, provided that their advertisements may not be released by mass media or otherwise disseminated to the general public.


Article 60 The content of drug advertisements shall be truthful and lawful, and shall be subject to the insert sheet approved by the drug regulatory department under the State Council, and no false content may be contained in them.
No unscientific or categorical assertion or warranty of described function may be contained in drug advertisements; no names or images of government departments, medical or pharmaceutical research institutions, academic institutions, or experts, scholars, physicians and patients may be used as evidence in drug advertisements.
Non-drug advertisements may not deal with drug promotion.

Article 61 Drug regulatory departments of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall inspect the drug advertisements approved thereby, and inform the advertisement regulatory authorities of those advertisements that violate the Law and the Advertising Law of the People's Republic of China, and put forward suggestions for their handling, and the said authorities shall handle such cases in accordance with the law.

Article 62 The provisions of the Price Law of the People's Republic of China and the Advertising Law of the People's Republic of China apply to the prices and advertisements of drugs not governed by the provisions of the Law.

Chapter VIII Supervision over Drugs

Article 63 Drug regulatory departments have the power to supervise and inspect, in accordance with the provisions of laws and administrative regulations, matters relating to drug research and development, for which they have given approval, to drug production and distribution, and to the use of drugs by medical institutions. No entities or individuals concerned may resist the supervision and inspection or conceal any facts.
When officers from drug regulatory departments conduct supervision and inspection, they shall show their identification documents, and shall keep confidential the know-how and business secrets of the persons under inspection coming to their knowledge in the course of supervision and inspection.

Article 64 Drug regulatory departments may conduct selective testing of drug quality in light of the need of supervision and inspection. Sampling for selective testing shall be carried out in accordance with relevant provisions, and no fees whatever may be charged therefor. The necessary expenses shall be listed and covered in accordance with the provisions of the State Council.
Drug regulatory departments shall take administrative enforcement measures to seal or seize the drugs and related materials that are proved to be potentially harmful to human health and shall, within seven days, make an administrative treatment decision on the matter in question. Where it is necessary to test such drugs, they shall, within 15 days from the date a testing report is issued, make an administrative treatment decision.

Article 65 The drug regulatory department under the State Council and the drug regulatory departments of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall regularly announce the results of selective testing of drug quality. Where the announcement is improper, it shall be corrected within the scope in which the original announcement is made.

Article 66 Where the party concerned has objection to the results of testing conducted by a drug testing institution, it may, within seven days from the date it receives the testing results for the drug, either apply for re-testing to the said drug testing institution, or to such an institution established or designated by the drug regulatory department at the next higher level or directly apply to a drug testing institution established or designated by the drug regulatory department under the State Council. The drug testing institution that accepts the application shall, within the time limit specified by the drug regulatory department under the State Council, draw a conclusion on the re-testing.


Article 67 Drug regulatory departments shall make follow-up inspections on the certified drug manufacturers and drug distributors in accordance with relevant provisions and based on the Good Manufacturing Practice for Drugs and the Good Distribution Practice for Drugs.

Article 68 With regard to the drugs produced in accordance with the provisions of the Law by drug manufacturers not located in the region, no local people's government or drug regulatory department may, by means of demanding drug testing or approval, restrict or deny their access to the region.

Article 69 No drug regulatory department, or drug testing institution established thereby, or the institution specially engaged in drug testing designated thereby may be involved in production or distribution of drugs, or recommend drugs in its name or have the supervisor for drug production or sale named after it.
No staff members of drug regulatory departments, of drug testing institutions established thereby or of institutions specially engaged in drug testing designated thereby may be involved in drug production or distribution.

Article 70 The State applies a system of report on adverse drug reaction. Drug manufacturers, drug distributors and medical institutions shall make constant investigations into quality, therapeutic efficacy and reactions of the drugs produced, distributed and used thereby. When serious adverse reactions possibly induced by drug use are discovered, they shall, without delay, report the matter to the local drug regulatory departments and administrative departments for health of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government. Specific measures therefor shall be formulated by the drug regulatory department under the State Council in concert with the administrative department for health under the State Council.
With regard to drugs with confirmed serious adverse reactions, the drug regulatory department under the State Council or the drug regulatory department of the people's government of province, autonomous region or municipality directly under the Central Government may take urgent control measures to suspend their production, distribution and use, and shall, within five days, arrange for assessment and, within 15 days from the date the conclusion is drawn, make an administrative treatment decision in accordance with the law.

Article 71 Drug testing institutions of the drug manufacturers, drug distributors and medical institutions or their staff members shall accept technical instructions given by drug testing institutions set up by the local drug regulatory departments.

Chapter IX Legal Liabilities

Article 72 Any drug manufacturer or drug distributor that, without obtaining a Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution, manufactures or distributes drugs shall be banned in accordance with the law, and have the drugs illegally produced or sold and the illegal gains therefrom, if any, confiscated, and they shall concurrently be fined not less than two times but not more than five times the value of the drugs illegally produced or sold (including the drugs sold and not sold, hereinafter the same). If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.


Article 73 Where counterfeit drugs are produced or sold, the drugs illegally produced or sold and the illegal gains therefrom, if any, shall be confiscated, and a fine not less than two times but not more than five times the value of the said drugs shall be imposed. The approval documents, if any, shall be withdrawn and an order shall be given to suspend production or business operation for rectification. If the circumstances are serious, the Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution shall be revoked. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.


Article 74 Where substandard drugs are produced or sold, the drugs illegally produced or sold and the illegal gains therefrom, if any, shall be confiscated, and a fine not less than one time but not more than three times the value of the said drugs shall also be imposed. If the circumstances are serious, an order shall be given to suspend production or business operation for rectification, or the drug approval documents shall be withdrawn and the Drug Manufacturing Certificate, the Drug Distribution Certificate, or the Pharmaceutical Preparation Certificate for Medical Institution shall be revoked. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.


Article 75 Where enterprises or other entities are engaged in production or sale of counterfeit or substandard drugs, if the circumstances are serious, the persons directly in charge and other persons directly liable shall be prohibited from engaging in the drug production or distribution within ten years.
The crude materials, accessories, packaging materials and manufacturing equipment specially used for producing counterfeit or substandard drugs by any producer shall be confiscated.


Article 76 Anyone who knows or should have known that the drugs are counterfeit or substandard drugs provides conveniences such as transportation, keeping or storage of the drugs, all the earnings therefrom, if any, shall be confiscated, and a fine not less than 50% of but not more than three times the amount of the illegal earnings shall be concurrently imposed. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.

Article 77 The quality testing results provided by the drug testing institutions shall be contained in the penalty notification regarding counterfeit and substandard drugs, except in cases specified in the provisions of Items 1, 2, 5 and 6, Paragraph 3 of Article 48 and Paragraph 3 of Article 49 of the Law.

Article 78 Any drug manufacturer, drug distributor, institution for non-clinical safety study, or institution for drug clinical trial that does not implement the Good Manufacturing Practice for Drugs, the Good Distribution Practice for Drugs, good practices of non-clinical drug research or good practices of clinical drug trials as required shall be given a warning and shall be ordered to make corrections within a time limit. If it fails to do so within the time limit, it shall be ordered to suspend production or business operation for rectification and shall concurrently be fined not less than CNY5,000 but not more than CNY20,000. If the circumstances are serious, the Drug Manufacturing Certificate, Drug Distribution Certificate or the qualifications of the institution for drug clinical trial shall be revoked.


Article 79 Any drug manufacturer, drug distributor or medical institution that, in violation of the provisions of Article 34 of the Law, purchases drugs from the enterprises without a Drug Manufacturing Certificate or Drug Distribution Certificate shall be ordered to make corrections, and have the drugs illegally purchased confiscated, and shall concurrently be fined not less than two times but not more than five times the value of the drugs illegally purchased; the illegal gains, if any, shall be confiscated. If the circumstances are serious, the Drug Manufacturing Certificate, Drug Distribution Certificate, or the practice license for the medical institution shall be revoked.


Article 80 If any enterprise that imports drugs for which an import drug license has been granted fails to register, in accordance with the provisions of the Law, for the record with the drug regulatory department in the place where the port permitting the drug importation is located, it shall be given a warning and be ordered to make corrections within a time limit; if it fails to do so within the time limit, the import drug license shall be revoked.


Article 81 If anyone falsifies, alters, trades in, rents out or lends the certificates or drug approval documents, the illegal gains, if any, shall be confiscated and a fine not less than one time but not more than three times the amount of the illegal gains shall be concurrently imposed; if there are no illegal gains, a fine not less than CNY20,000 but not more than CNY100,000 shall be imposed. If the circumstances are serious, the Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution of the party that sells, rents out or lends it shall be revoked, or the drug approval documents shall be withdrawn. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.


Article 82 If anyone, in violation of the provisions of the Law, obtains a Drug Manufacturing Certificate, Drug Distribution Certificate, Pharmaceutical Preparation Certificate for Medical Institution, or drug approval documents by providing false certificates, documents and data, or samples, or by other fraudulent means, the said Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution shall be revoked, or the drug approval documents shall be withdrawn, and his applications for such certificates or approval documents shall be rejected within five years, and a fine not less than CNY10,000 but not more than CNY30,000 shall also be concurrently imposed.


Article 83 Any medical institution that sells pharmaceutical preparations dispensed thereby on the market shall be ordered to make corrections, and have the preparations for illegal sale confiscated, and shall concurrently be fined not less than one time but not more than three times the value of the said preparations; and the illegal gains, if any, shall be confiscated.

Article 84 Any drug distributor that violates the provisions of Articles 18 and 19 of the Law shall be ordered to make corrections and be given a warning. If the circumstances are serious, the Drug Distribution Certificate shall be revoked.

Article 85 Where the drugs the marks of which are not in conformity with the provisions of Article 54 of the Law, except for those treated as counterfeit or substandard drugs in accordance with the law, an order for corrections and a warning shall be given. If the circumstances are serious, the approval documents for the drugs shall be withdrawn.

Article 86 Where a drug testing institution issues a false testing report, if it constitutes a crime, criminal liabilities shall be prosecuted in accordance with the law; if it does not constitute a crime, the institution shall be ordered to make corrections and be given a warning, and concurrently be fined not less than CNY30,000 but not more than CNY50,000. The persons directly in charge and other persons directly liable shall, in accordance with the law, be punished with demotion, dismissal, or expulsion and concurrently be fined not more than CNY30,000. The illegal gains, if any, shall be confiscated. If the circumstances are serious, the qualification for testing shall be annulled. If the testing result issued by the drug testing institution is not authentic, thus causing losses, the institution shall bear corresponding liability for compensation for losses.


Article 87 The administrative penalties prescribed in Articles 72 through 86 of the Law shall be determined by the drug regulatory departments at or above the county level in accordance with the division of responsibility defined by the drug regulatory department under the State Council. Revocation of the Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution or withdrawal of the drug approval documents shall be determined by the department that issued the certificate or the approval documents.

Article 88 Any violation of the provision of Articles 55, 56 of the Law governing the administration over drug prices shall be punished pursuant to the provisions of the Price Law of the People's Republic of China.

Article 89 Drug manufacturers, drug distributors or medical institutions that offer or accept, in private, the rake-offs or other benefits in the course of purchasing and selling drugs or drug manufacturers, drug distributors or their agents that offer money or things of value or other benefits to leading members, drug purchasers, physicians, or other related persons of the medical institutions where their drugs are used shall be fined not less than CNY10,000 but not more than CNY200,000 by the administrative departments for industry and commerce, and the illegal gains therefrom, if any, shall be confiscated. If the circumstances are serious, the administrative departments for industry and commerce shall revoke the business licenses of the drug manufacturers or drug distributors and inform the drug regulatory departments of the matter, which shall revoke their Drug Manufacturing Certificate, or Drug Distribution Certificate. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.

Article 90 Any leading members, purchasers or other related persons of drug manufacturers or drug distributors that, in the course of drug purchasing or selling, accept money or things of value or other benefits offered by other manufacturers, distributors or their agents shall be given sanctions in accordance with the law, and the illegal gains therefrom, if any, shall be confiscated. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.
Leading members, drug purchasers, physicians or other related persons of medical institutions who accept money or things of value or other benefits offered by drug manufacturers, drug distributors or their agents shall be given sanctions by the administrative departments for health or the institutions to which they belong, and the illegal gains therefrom, in any, shall be confiscated. With regard to licensed physicians who seriously violate the law, the administrative departments for health shall revoke their licenses for medical practice. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.

Article 91 Any violation of the provisions of the Law related to the administration over drug advertisements shall be punished pursuant to the provisions of the Advertising Law of the People's Republic of China, and the drug regulatory department that issues the advertisement approval number shall withdraw the advertisement approval number and shall, within one year, reject any application for approval of advertising for the drug in question. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.
Where a drug regulatory department does not perform its duty of drug advertisement examination in accordance with the law and the advertisement approved for issuance contains false information or other content violating laws or administrative regulations, administrative sanctions shall, in accordance with the law, be given to the persons directly in charge and other persons directly liable. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.

Article 92 Drug manufacturers, drug distributors or medical institutions that violate the provisions of the Law and thus cause harm to users of drugs shall bear the liability for compensation in accordance with the law.


Article 93 Any drug regulatory department that violates the provisions of the Law and commits any of the following acts shall be ordered by the competent authority at the next higher level or the supervisory body to recall the certificates unlawfully issued or to withdraw the drug approval documents, and administrative sanctions shall be given to the persons directly in charge and other persons directly liable in accordance with the law. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law:
1. issuing the certificates proving the compliance with the Good Manufacturing Practice for Drugs or the Good Distribution Practice for Drugs to the enterprises that do not meet the corresponding requirements, failing to perform, in accordance with the relevant provisions, the duty of follow-up inspections in respect of the enterprises that have obtained the certificates, or failing to order, in accordance with the law, the enterprises not meeting the requirements to make corrections or withdraw their certificates;
2. issuing a Drug Manufacturing Certificate, Drug Distribution Certificate or Pharmaceutical Preparation Certificate for Medical Institution to the entities that do not meet the statutory requirements;
3. issuing an import drug license to the drug that does not comply with the requirements for import; and
4. granting approval for conducting a clinical trial, issuing a new drug certificate or a drug approval number, where the requirements for clinical trial or drug production are not fulfilled.

Article 94 If any drug regulatory department, drug testing institution established thereby or institution specially engaged in drug testing designated thereby is involved in drug production or distribution, it shall be ordered by the authority at the next high level or the supervisory body to make corrections, and the illegal gains therefrom, if any, shall be confiscated. If the circumstances are serious, administrative sanctions shall be given to the persons directly in charge and other persons directly liable in accordance with the law.
Any staff member of the drug regulatory department, drug testing institution established thereby or institution specially engaged in drug testing designated thereby who is involved in drug production or distribution shall be given an administrative sanction in accordance with the law.

Article 95 If any drug regulatory department or drug testing institution established or designated thereby, in violation of the law, collects testing fees for supervision and inspection on drugs shall be ordered by the relevant government department to return the fees, and administrative sanctions shall be given to the persons directly in charge and other persons directly liable in accordance with the law. Any drug testing institution that collects testing fees in violation of the law, if the circumstances are serious, shall be disqualified for drug testing.


Article 96 Drug regulatory departments shall, in accordance with the law, perform their duties of supervision and inspection and shall see to it that the enterprises holding the Drug Manufacturing Certificate or Drug Distribution Certificate engage in drug production or drug distribution in accordance with the provisions of the Law.
Where enterprises holding a Drug Manufacturing Certificate or Drug Distribution Certificate produce or sell counterfeit or substandard drugs, such enterprises shall be prosecuted for legal liabilities in accordance with the law; in addition, the persons directly in charge and other persons directly liable of the drug regulatory departments who neglect their duty or commit dereliction of duty shall be given administrative sanctions in accordance with the law. If a crime is constituted, criminal liabilities shall be prosecuted in accordance with the law.

Article 97 A drug regulatory department shall order a drug regulatory department at a lower level to correct, within a time limit, the administrative action taken in violation of the Law, and it has the power to alter or annual the action which is not corrected within the time limit.

Article 98 Anyone responsible for drug supervision and administration who abuses his power, engages in malpractice for personal gain or neglects his duty, if it constitutes a crime, shall be prosecuted for criminal liabilities in accordance with the law; if it is not serious enough to constitute a crime, he shall be given administrative sanctions in accordance with the law.

Article 99 The value of products mentioned in present chapter shall be calculated based on the marked prices of the drugs illegally produced or sold; where there is no marked price, the value shall be calculated based on the market prices of drugs of the same kind.

Chapter X Supplementary Provisions

Article 100 The terms used in the Law are defined as follows:
Drugs refer to articles which are used in the prevention, treatment and diagnosis of human diseases and intended for the regulation of the physiological functions of human beings, for which indications or functions, usage and dosage are specified, including traditional Chinese drug materials, prepared slices of traditional Chinese drugs, traditional Chinese medicine preparations, chemical crude drugs and their preparations, antibiotics, biochemical drugs, radioactive pharmaceuticals, serum, vaccines, blood products and diagnostic agents.
Accessories refer to the excipients and additives used in drug production and prescription dispensing.
Drug manufacturers refer to enterprises exclusively or partly engaged in drug production.
Drug distributors refer to enterprises exclusively or partly engaged in drug distribution.


Article 101 Administrative measures for the cultivation, collection and breeding of traditional Chinese drugs shall be separately formulated by the State Council.

Article 102 The State exercises special administration over the circulation of preventive biological products. Specific measures therefor shall be formulated by the State Council.

Article 103 Specific measures for enforcement of the Law by the Chinese People's Liberation Army shall be formulated by the State Council and the Central Military Commission in accordance with the Law.

Article 104 The Law shall come into force as of December 1, 2001.