(Adopted at the 7th 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 and promulgated by Order No.45 of the President of the People’s Republic of China on February 28, 2001)

Contents

Chapter I General Provisions

Chapter II Control over Drug Manufacturers

Chapter III Control over Drug Distributors

Chapter IV Control over Pharmaceuticals in Medical Institutions

Chapter V Control over Drugs

Chapter VI Control over Drug Packaging

Chapter VII Control over Drug Pricing and Advertising

Chapter VIII Inspection of Drugs

Chapter IX Legal Liabilities

Chapter X Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is enacted to tighten drug control, to ensure drug quality and safety for human beings, to protect the health of people and their legitimate rights and interests in the use of drugs.

Article 2 All institutions and individuals engaged in research, production, distribution, use, or control over drugs in the People’s Republic of China shall abide by this 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 Chinese crude drugs.

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

Article 5 The drug regulatory department under the State Council shall be responsible for drug regulation nationwide. The relevant departments under the State Council shall be responsible for the related regulatory work within the limits of their duties.

The drug regulatory departments of the people’s governments of provinces, autonomous regions, and municipalities directly under the Central Government shall be responsible for drug regulation in their administrative areas. The relevant departments of the said people’s governments shall be responsible for the related regulatory work 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 institutes established or designated by drug regulatory departments shall undertake the responsibility for drug testing required for conducting drug examination, granting approval and controlling drug quality in accordance with law.

Chapter II Control over Drug Manufacturers

Article 7 The establishment of a drug manufacturer shall be subject to approval by the local drug regulatory department of the people’s government of the province, autonomous region or municipality directly under the Central Government and be granted the Drug Manufacturing Certificate, and, with the certificate, the manufacturer shall be registered with the administrative department for industry and commerce. No one may manufacture drugs without the certificate.

The valid term and the scope of manufacturing shall be indicated in the Drug Manufacturing Certificate. For renewal of the certificate on expiration, reexamination is required.

When giving approval to the establishment of a new manufacturer, the drug regulatory department shall see to it that, apart from the requirements specified by the provisions in Article 8 of this Law that should be met, the pharmaceutical development programs and policies formulated by the State for the pharmaceutical industry are conformed to and 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 necessary technical workers;

(2)having the premises, facilities, and hygienic environment required for drug manufacturing;

(3)having the institutions and personnel capable of quality control and testing for drugs to be produced 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 according to the Good Manufacturing Practice for Pharmaceutical Products (GMP) formulated by the drug regulatory department under the State Council on the basis of this Law. The drug regulatory department shall inspect a drug manufacturer as to its compliance with the GMP requirements and issue a certificate to the manufacturer passing the inspection.

The specific measures and schedule for implementing the GMP shall be formulated by the drug regulatory department under the State Council.

Article 10 With the exception of the processing of prepared slices of Chinese crude drugs, a drug shall be produced in conformity with the National Drug Standard 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 matter for examination and approval to the original approval authority.

Prepared slices of Chinese crude drugs shall be processes in conformity with the national drug standards. Those not covered by the national drug standards shall be produced according to the processing procedures formulated by the drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the Central Government. The said processing procedures shall be submitted to the drug regulatory department under the State Council for the record.

Article 11 The drug substances and excipients for the manufacture of pharmaceutical products shall meet the requirements for medicinal use.

Article 12 Drug manufacturers shall perform quality test of the drugs produced; no drugs that do not meet the national drug standards or that are not produced according to the processing procedures for the prepared slices of Chinese crude drugs formulated by the drug regulatory department of the people’s government of the province, autonomous region, or municipality directly under the Central Government may be released.

Article 13 A drug manufacturer may accept contract production of drugs upon approval by the drug regulatory department under the State Council, or by the drug regulatory department of the people’s government of a province, autonomous region, or municipality directly under the Central Government authorized by the drug regulatory department under the State Council.

Chapter III Control over Drug Distributors

Article 14 The establishment of a drug wholesaler shall be subject to approval of the local drug regulatory department of the people’s government of the province, autonomous region or municipality directly under the Central Government and be granted the Drug Distribution Certificate; the establishment of a drug retailer shall be subject to approval and be granted the said certificate by the local drug regulatory department at or above the county level. With the certificate, the wholesaler and the retailer shall be registered with the administrative department for industry and commerce. No one may distribute drugs without the certificate.

The valid term and the scope of business shall be indicated in the Drug Distribution Certificate. For renewal of the certificate upon expiration, reexamination is required.

When giving approval to the establishment of a new distributor, the drug regulatory department shall see to it that, apart from the requirements specified by the provisions in Article 15 of this Law that should 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 operation premises, equipment, warehouses and hygienic environment required for drug distribution;

(3)having the units or personnel for quality control over 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 business according to the Good Supply Practice for Pharmaceutical Products (GSP) formulated by the drug regulatory department under the State Council on the basis of this Law. The drug regulatory department shall inspect a drug distributor as to its compliance with the GSP requirements, and issue a certificate to the distributor passing the inspection.

The specific measures and schedule for implementing the GSP shall be formulated by the drug regulatory department under the State Council.

Article 17 For purchasing drugs, drug distributors shall establish and apply a system for quality inspection and acceptance, and check the certificate of drug quality, labels and other marks; no drugs that do not meet the requirements may be purchased.

Article 18 Drug distributors shall keep authentic and complete records when purchasing and selling drugs. In the record shall be indicated the adopted name in China, dosage form, strength or size, batch number, date of expiry, manufacturer, purchase (or sale) unit, amount of the drug purchased (or sold), purchase or sale price, date of purchase (or sale), and other items specified by the drug regulatory department under the State Council.

Article 19 Drug distributors shall sell drugs properly and make correct description of usage, dosage and cautions; prescription for dispensing shall be checked, and no drugs listed in the prescription may be changed or substituted without authorization. They shall refuse to dispense incompatible or over-dose prescriptions; when necessary, they may do the dispensing only after corrections or re-signing is made by the prescribing physician.

Drug distributors shall indicate the origin of the Chinese crude drugs to be sold.

Article 20 A drug distributor shall establish and practise a system for drug storage, and take necessary measures to ensure drug quality, 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 Chinese crude drugs may be sold at town and country fairs, except those otherwise specified by the State Council.

No drugs other than the Chinese crude drugs may be sold at town and country fairs, but drug retailers holding the Drug Distribution Certificate may, within the specified business scope, sell such drugs at stores they set up at the fairs. Specific measures shall be formulated by the State Council.

Chapter IV Control over Pharmaceuticals in Medical Institutions

Article 22 A medical institution shall be staffed with legally qualified pharmaceutical professionals. No one who is not a pharmaceutical professional may directly engage in technical work in pharmacy.

Article 23 To dispense pharmaceutical preparations, a medical institution shall be subject to examination and permission by the administrative department for health of the people's government of the province, autonomous region or municipality directly under the Central Government, 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 it by the said drug regulatory department. No one may dispense pharmaceutical preparations without such certificate.

The valid term shall be indicated in the certificate. For renewal of the certificate upon expiration, reexamination is required.

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

Article 25 The pharmaceutical preparations to be dispensed by the medical institution shall be ones that are to meet the clinic need of the institution but are not available on the market and shall be subject to approval in advance by the local drug regulatory department of the people’s government of the province, autonomous region or municipality directly under the Central Government. The quality of the dispensed pharmaceutical preparations shall be subject to test according to regulations; those passing the testing may be used within the institution on the basis of 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 by the drug regulatory department under the State Council or by the drug regulatory department of the people’s government of a province, autonomous region or municipality directly under the Central Government.

No pharmaceutical preparations dispensed by medical institutions may be marketed.

Article 26 For purchasing drugs, medical institutions shall establish and practise a system for quality inspection and acceptance, and check the certificate of drug quality, labels and other marks; no drugs that do not meet the specified requirements may be purchased or used.

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

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

Chapter V Control over Drugs

Article 29 The dossier on a new drug research and development including the manufacturing process, quality specifications, results of pharmacological and toxicological tests, and the related data and the samples shall, in accordance with the regulations 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 study 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 the clinical trial and passed the evaluation, a New Drug Certificate shall be issued upon approval by the drug regulatory department under the State Council.

Article 30 The institutions for non-clinical safety evaluation and study and clinical study institutions shall respectively implement the Good Laboratory Practice for Non-Clinical Laboratory Studies (GLP) and Good Clinical Practice (GCP).

The GLP and GCP 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 by the drug regulatory department under the State Council, and a drug approval number shall be issued for it, with the exception of the Chinese crude drugs and the prepared slices of Chinese crude drugs which where no control by approval number is exercised. The list of the Chinese crude drugs and the prepared slices of the Chinese crude drugs to be controlled by the approval number shall be compiled by the drug regulatory department under the State Council, in conjunction with the administrative department for traditional Chinese medicines under the State Council.

A drug manufacturer may produce the drug only after an approval number is granted to it.

Article 32 Drugs shall meet the national drug standards. The provisions in the second paragraph of Article 10 of this Law shall be applicable to the prepared slices of Chinese crude 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 shall be 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 already approved for production.

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

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

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

Article 37 The State adopts different systems for the control over prescription and non-prescription drugs. The specific measures 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 Examination 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 specifications 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 needs of medical institutions or for personal medication, formalities for import shall be completed in accordance with the relevant regulations 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 local drug regulatory departments for the record. The customs shall release the drugs on the basis of 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 department in the place where the port is located shall notify the drug testing institution to conduct sampling and testing of the drugs to be imported according to the regulations of the drug regulatory department under the State Council, and sampling fees shall be charged in accordance with the provisions of the second paragraph of Article 41 of this Law.

The ports where drugs may be imported shall be proposed by the drug regulatory department under the State Council together with the General Customs Administration 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 rates shall be decided on and publicized by the financial department together with the competent pricing department under the State Council. Measures for collecting fees for testing shall be formulated and announced by the financial department together with the drug regulatory department under the State Council.

Article 42 The drug regulatory department under the State Council shall organize investigations of the drugs to the production or importation of which it has granted approval; it shall withdraw the approval number or Import Drug License 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, distributed or used. Those already produced or imported shall be destroyed or disposed of under the supervision of the local drug regulatory department.

Article 43 The State adopts a system for drug reserve.

When major disasters, epidemic situations or other emergencies occur in the country, the department specified by the State Council may transfer drugs from the enterprises to meet the urgent needs.

Article 44 The State Council shall have the power to restrict or prohibit the exportation of the drugs which are in short supply within the country.

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 Measures for the control over the folk crude drugs customarily used in certain regions shall be formulated by the drug regulatory department together with the administrative department for traditional Chinese medicines under the State Council.

Article 48 Production (including dispensing, the same below) and distribution of counterfeit drugs are prohibited.

A drug is a counterfeit drug in any of the following cases:

(1) the ingredients in the drug are different from those specified by the national drug standards; or

(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 regulations 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 this Law;

(3)it is deteriorated;

(4)it is contaminated;

(5)it is produced by using drug substances without approval number as required by this Law; or

(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 date of expiry is not indicated or is altered;

(2) the batch number is not indicated or is altered;

(3) it is beyond the date of expiry;

(4) no approval is obtained for the immediate packaging material or container;

(5) colorants, preservatives, spices, flavorings or other excipients are added without authorization; or

(6) other cases where the drug standards are not conformed.

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

Article 51 Employees 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 may engage in any work in direct contact with drugs.