Article 34The drug regulatory department under the State Council may, based on the needs for protection of public health, set an observation period of not more than five years for new drugs produced by drug manufacturers; and no approval shall be given to any other manufacturers to produce or import the said drugs during the observation period.

Article 35The State protects undisclosed data of drug study and others which are independently acquired and submitted by drug manufacturers or sellers to obtain production or marketing approval of the drugs in question which contain new chemical entities. No one may make unfair commercial use of the said data.

Within six years from the date a drug manufacturer or seller obtains the approval documents for producing or marketing a drug containing new chemical entities, if any other applicant uses the data mentioned in the preceding paragraph to apply for approval for production or marketing of the drug in question without permission of the original applicant who has obtained the approval, no approval may be given to the other applicants by the drug regulatory department except that the data submitted are acquired independently.

No drug regulatory department may disclose the data set forth in the first paragraph of this Article except

(1)for the need of public interests; or

(2)where steps are taken to ensure that the data are protected against unfair commercial use.

Article 36Any drug applied to be imported shall be the one obtained market authorization in the country or region of manufacturing. A drug without such an authorization may be approved of its importation in accordance with the provisions in the Drug Administration Law and in the Regulations, provided that its safety, efficacy and clinical needs have been confirmed by the drug regulatory department under the State Council.

For importation of a drug, an application shall be made according to the provisions of the drug regulatory department under the State Council. A drug may only be imported after an Import Drug License is given if it is produced by a foreign manufacturer, or a Pharmaceutical Product License is given if it is produced by a manufacturer in Hong Kong, Macao or Taiwan of China.

Article 37Any medical institution that urgently needs to import a small amount of drugs shall, with a Practicing License of Medical Institution, submit an application to the drug regulatory department under the State Council, and the drug in question may only be imported upon approval. Such imported drugs shall only be used in the designated medical institution for the specified purpose.

Article 38After import drugs arrive at the port, the drug importer shall file a record with the local drug regulatory department in the place where the port is located with the Import Drug License or Pharmaceutical Product License, the original copy of the certificate of origin, duplicate copy of the purchase contract, packing list, bill of freight, shipping invoice, certificate of analysis for the release of drugs by the manufacturer, insert sheet and other documents. The said drug regulatory department shall review the documents submitted and issue a Drug Import Note if they comply with the requirements. The drug importer shall, with the Drug Import Note, complete with the Customs the formalities for customs declaration and clearance.

The drug regulatory department in the place where the port is located shall notify the drug testing institution to conduct sampling and testing of the import drugs on each batch basis with the exception of the circumstances set forth in Article 41 of the Drug Administration Law.

Article 39Vaccines, blood products, diagnostic reagents in vitro for blood donor screening and other biological products regulated by the drug regulatory department under the State Council shall be subject to testing or review for approval according to the provisions of the drug regulatory department under the State Council before being marketed or imported; any product that fails in testing or has not been approved shall not be marketed or imported.

Article 40The State encourages the cultivation of Chinese crude drugs. Control through approval number shall be exercised over the Chinese crude drugs that can be cultivated or raised on a large scale and in an intensified way and whose quality can be controlled and fulfills the requirements laid down by the drug regulatory department under the State Council.

Article 41The drug regulatory department under the State Council shall re-evaluate the drugs approved for production and marketing and, on the basis of the re-evaluation results, it may take measures to order the revision of insert sheet or suspension of production, marketing or use of a drug. For drugs with serious adverse reaction or harmful to human health due to other reasons, the approval documents shall be withdrawn.

Article 42The valid term of a drug approval number, Import Drug License and Pharmaceutical Product License issued by the drug regulatory department under the State Council is five years. To continue its drug production or importation, the applicant shall submit a re-registration application six months prior to the expiry date. When making re-registration of a drug, the relevant data shall be submitted according to the provisions of the drug regulatory department under the State Council. If no application for the re-registration of a drug is made upon expiration of the valid term, or the application fails to comply with the provisions on re-registration of the drug regulatory department under the State Council upon review, the drug approval number, Import Drug License or Pharmaceutical Product License shall be withdrawn.

Article 43No contents involving prevention, treatment or diagnosis of human diseases shall be included in the package, label or insert sheet and the related promotional materials for promoting a non-drug product, except as otherwise provided by laws or administrative regulations.

Chapter VI Control over the Packaging of Drugs

Article 44Immediate packaging materials and containers used by drug manufacturers shall fulfill the requirements for medicinal use and the standards for ensuring human health and safety, and be subject to registration upon approval by the drug regulatory department under the State Council.

The drug regulatory department under the State Council shall be responsible for working out and issuing the measures for control over immediate packaging materials and containers, the product directories and the requirements and standards for medicinal use.

Article 45Packaging materials and containers selected for production of prepared slices of Chinese crude drugs shall accommodate to drug property. No prepared slices of Chinese crude drug may be marketed whose package fails to conform to regulations. A label shall be printed on or attached to the package of prepared slices of Chinese crude drug.

On the label of prepared slices of a Chinese crude drug shall be indicated the name of the drug, grade/weight, origin of production, manufacturer, product batch number and production date; if the said drug is controlled by approval number, the drug approval number shall also be indicated.

Article 46The package, label and insert sheet of a drug shall be printed in accordance with the provisions in Article 54 of the Drug Administration Law and those formulated by the drug regulatory department under the State Council.

The trade name of a drug shall conform to the provisions of the drug regulatory department under the State Council.

Article 47The immediate packaging materials and containers used by medical institutions for dispensing pharmaceutical preparations, as well as the labels and insert sheets, shall conform to the provisions in Chapter 6 of the Drug Administration Law and the relevant provisions in the Regulations, and be subject to approval by the local drug regulatory departments of the people's governments of the provinces, autonomous regions or municipalities directly under the Central Government.

Chapter VII Control over Drug Pricing and Advertising

Article 48For drug pricing, the State exercises a system under which the prices are fixed or guided by the government or regulated by the market.

For drugs listed in the directory of drugs for national basic medical insurance and drugs not listed in the directory but monopolistically manufactured and distributed, their prices shall be fixed or guided by the government; the prices of other drugs shall be regulated with the market.

Article 49For drugs the prices of which are fixed or guided by the government according to law, the competent pricing department of the government shall fix and adjust the prices in accordance with the principle set forth in Article 55 of the Drug Administration Law; and, in fixing and adjusting the marketing prices, control over the average social ratio of expense as a percentage of sales of drugs, the ratio of income as a percentage of sales, and wholesale and retail margin shall be manifested. The specific pricing measures shall be formulated by the competent department for pricing under the State Council in accordance with the relevant provisions in the Pricing Law of the People's Republic of China (hereinafter referred to as the Pricing Law).

Article 50For a drug whose price shall be fixed or guided by the government and is so established, the competent department for pricing shall publish the said price and specify the date for going into effect in designated publications in accordance with the provisions in Article 24 of the Pricing Law.

Article 51For a drug whose price is fixed or guided by the government, the competent department for pricing shall, in fixing or adjusting the price, organize experts in pharmaceutical, medical, economic and other fields to conduct assessment; and, if necessary, it shall solicit comments from drug manufacturers, drug distributors, medical institutions, citizens and other relevant units and persons.