Laws of the People's Republic of China

The Standing Committee of the National People's Congress

Order of the President of the People's Republic of China

No.45

The Pharmaceutical Administration Law of the People's Republic of China has been revised at the Twentieth Meeting of the Standing Committee of the Ninth National People's Congress on February 28, 2000, and now promulgated the revised edition of the Pharmaceutical Administration Law of the People's Republic of China, and shall enter into force as of December 1, 2001.

Jiang Zemin, President of the People's Republic of China

February 28, 2001

Pharmaceutical Administration Law of the People's Republic of China ContentsChapter I General Provisions

Chapter II Administration of Pharmaceutical Producing Enterprises

Chapter III Administration of Pharmaceutical Trading Enterprises

Chapter IV Administration of Pharmaceuticals at Medical Organizations

Chapter V Pharmaceutical Administration

Chapter VI Administration of the Packaging of Pharmaceuticals

Chapter VII Administration of the Prices and Advertising of Pharmaceuticals

Chapter VIII Supervision over Pharmaceuticals

Chapter IX Legal Responsibility

Chapter X Supplementary Provisions

Chapter I General Provisions

Article 1

This law is formulated to enhance the supervision and control of pharmaceuticals, ensure their quality, guarantee safety in medication, and safeguard the health and legal rights and interests of the people.

Article 2

The law shall be applicable to any units or individuals engaged in research, production, trade, use, supervision and management of pharmaceuticals within the territory of the People's Republic of China.

Article 3

The State shall develop both modern and traditional medicines encourage their role in the prevention and treatment of diseases and in health care.

The State shall protect the resources of wild medicinal resources and encourage the domestic cultivation of Chinese traditional medicinal crops.

Article 4

The State shall encourage the research and production of new medicine and protect the legal rights and interests of its citizens, natural persons and other organizations in the research and development of new medicine.

Article 5

The pharmaceuticals supervisory and administrative departments under the State Council shall be responsible for the supervision and control of pharmaceuticals throughout the country. Other relevant departments under the State Council shall be responsible for the supervision and control of pharmaceuticals related to the scope of their functions.

The pharmaceutical supervisory and administrative departments of the provinces, autonomous regions and municipalities directly under the central government shall be responsible for the supervision and control of pharmaceuticals within their administrative regions. Other relevant departments of the provinces, autonomous regions and municipalities directly under the central government shall be responsible for the supervision and control of pharmaceuticals related to the scope of their functions.

The pharmaceutical supervisory and administrative departments under the State Council shall cooperate with the general administrative department of the economy under the State Council to carry out pharmaceutical development plans and industrial policies formulated by the State.

Article 6

The pharmaceutical inspection institutions established or approved by the pharmaceutical supervisory and administrative departments shall be charged with the work of pharmaceutical examination and approval, as well as quality inspection, in accordance with laws and regulations.

Chapter II Administration of Pharmaceutical Producing Enterprises

Article 7

The establishment of a pharmaceutical producing enterprise must be approved by and issued a Pharmaceutical Production License by the pharmaceutical supervisory and administrative department of the province, autonomous region, or municipality directly under the Central government in which the enterprise is located.

The establishment shall be registered at the industry and commerce administrative department based on the Pharmaceutical Production License, without which no pharmaceuticals shall be produced.

The Pharmaceutical Production License shall bear the scope of production and a period of validity, and upon expiration a new license shall be issued after examination for its renewal.

The approval of the establishment of pharmaceutical producing enterprises by the pharmaceutical supervisory and administrative departments shall be in conformity with Article 8 of this law, as well as the pharmaceutical development plan and the industrial policies formulated by the State to avoid the instance of a repeat establishment.

Article 8

To establish a pharmaceutical producing enterprise, the following requirements must be met:

(1)

It shall be staffed with legally certified pharmaceutical technical personnel, engineering technical personnel, as well as corresponding skilled workers.

(2)

It shall have factory premises, facilities and a sanitary environment suitable for the medicines produced.

(3)

It shall have a unit or competent personnel capable of inspecting the quality of the medicines produced, as well as necessary instruments and equipment.

(4)

It shall have rules and regulations to ensure the quality of medicines.

Article 9

Pharmaceutical producing enterprises must organize production in accordance with the "Standards for Quality Control of Pharmaceutical Production" formulated by the pharmaceutical supervisory and administrative departments under the State Council on the basis of this Law. Pharmaceutical supervisory and administrative departments shall confirm whether the pharmaceutical producing enterprises have met the requirements of the "Standards," and shall issue certificates to those qualified ones.

The detailed implementation measures and implementation process of the "Standards for Quality Control of Pharmaceutical Production" shall be formulated by the pharmaceutical supervisory and administrative department under the State Council.

Article 10

Except in the preparation of traditional Chinese medicines into ready-to-use forms, pharmaceuticals must be produced in accordance with the national pharmaceutical standard and the technological procedures approved by the supervisory and administrative departments of pharmaceuticals under the State Council, and the record of production must be complete and accurate. The changes of technological procedure made by the pharmaceutical producing enterprises which affect the quality of the pharmaceuticals shall be examined and approved by the original approval authorities.

The process for preparing traditional Chinese medicines into ready-to-use forms must conform to the national pharmaceutical standards, and in the absence of such standards, the process must conform to the processing standards stipulated by the supervisory and administrative departments of pharmaceuticals of the provinces, autonomous regions, or municipalities directly under the central government. The processing standards stipulated by the supervisory and administrative departments of pharmaceuticals of the provinces, autonomous regions, or municipalities directly under the central governments shall be placed on record at the pharmaceutical supervisory and administrative department under the State Council.

Article 11

The raw and supplementary materials used for the production of pharmaceuticals must conform to the requirements for medicinal use.

Article 12

The pharmaceutical producing enterprises must conduct quality inspections on the pharmaceuticals they produce; products which do not meet national pharmaceutical standards or are not prepared in conformity with the processing standards stipulated by the pharmaceutical supervisory and administrative departments of the provinces, autonomous regions, or municipalities directly under the central government shall not leave the factory.

Article 13

Pharmaceutical producing enterprises can accept the authorization to produce pharmaceuticals after they obtain approval from the pharmaceutical supervisory and administrative department under the State Council or the pharmaceutical supervisory and administrative departments of the provinces, autonomous regions, or municipalities directly under the central government authorized by the supervisory and administrative department of pharmaceuticals under the State Council.

Chapter III Administration of Pharmaceutical Trading Enterprises

Article 14

The establishment of pharmaceutical wholesale enterprises must be sanctioned by the competent local authorities of the production and trade of pharmaceuticals of the provinces, autonomous regions or municipalities directly under the central government, which will issue a Pharmaceutical Trade License. The establishment of pharmaceutical retail enterprises must be sanctioned by local authorities for the supervision and control of pharmaceuticals at or above the county level, which will issue a Pharmaceutical Trade License, on the basis of which registration at the industry and commerce administrative departments shall be conducted. Without the Pharmaceutical Trade License, any enterprises shall not engage in the trade of pharmaceuticals.

A Pharmaceutical Trade License shall bear a scope of trade and a period of validity, and upon expiration a new license shall be issued after examination for its renewal.

The approval of the establishment of pharmaceutical trading enterprises by the pharmaceutical supervisory and administrative departments shall adhere to the principle of reasonable positioning and convenience for buying of pharmaceuticals, and in addition must conform to Article 15 of this Law.

Article 15

To establish a pharmaceutical trading enterprise, the following requirements must be met

(1)

1 It shall be staffed with legally certified pharmaceutical technical personnel.

(2)

It shall have business premises, equipment, storage facilities and a sanitary environment suitable for the pharmaceuticals in which it trades.

(3)

It shall have a quality control organ or personnel suitable for the pharmaceuticals in which it trades.

(4)

It shall have rules and regulations to ensure the quality of the pharmaceuticals in which it trades.

Article 16

Pharmaceutical producing enterprises must trade in pharmaceuticals in accordance with the "Standards for Quality Control of Pharmaceutical Trading" stipulated by the pharmaceutical supervisory and administrative departments under the State Council on the basis of this Law. Pharmaceutical supervisory and administrative departments shall certify whether pharmaceutical trading enterprises meet the requirements of the "Standards for Quality Control of Pharmaceutical Trading" in accordance with relevant regulations, and issue certifications to qualified enterprises.

Detailed implementation measures and procedures for the "Standards for Quality Control of Pharmaceutical Trading" shall be stipulated by the pharmaceutical supervisory and administrative departments under the State Council.

Article 17

Pharmaceutical trading enterprises must formulate and implement check and approval rules for the purchase of pharmaceuticals, and check pharmaceutical certifications and other marks while purchasing pharmaceuticals. Pharmaceuticals that do not meet the required standards must not be purchased.

Article 18

Pharmaceutical trading enterprises shall keep accurate and complete records of purchased pharmaceuticals. Purchasing records must bear information on the pharmaceutical product's generic names, types, specifications, batches, valid periods, producing enterprises, purchasing (selling) units, purchasing (selling) quantity, purchasing and selling price, purchasing (selling) date and other contents required by the pharmaceutical supervisory and administrative department under the State Council.

Article 19

It is imperative for pharmaceutical trading enterprises, in the sale of pharmaceuticals, to be accurate and free of mistakes, and to provide correct directions for use, dosage and precautions. Prescriptions being dispensed must be checked. Pharmaceutical products listed in the prescription must not be presumptuously changed or substituted. Prescriptions containing incompatible substances or excessive dosages shall be rejected by the dispensary. If necessary, such prescriptions can be dispensed after they have been corrected or re-signed by the doctors who wrote them.

When traditional Chinese medicinal materials are offered for sale by pharmaceutical trading enterprises, their origin must be indicated.

Article 20

Rules for storage of pharmaceuticals shall be formulated and implemented by pharmaceutical trading enterprises, which must adopt necessary measures to facilitate cold storage and protection against freezing, moisture, insects and rodents to ensure pharmaceutical quality.

An inspection system shall be carried out for pharmaceuticals entering or leaving a warehouse

Article 21

Unless otherwise stipulated by the State, traditional Chinese medicinal materials may be marketed at urban or rural fairs.

Pharmaceuticals other than traditional Chinese medicinal materials may not be sold at urban or rural fairs, but those retail enterprises which have the Pharmaceutical Trade License may set up stalls at urban or rural fairs to sell pharmaceuticals other than traditional Chinese medicinal materials within prescribed areas. Detailed measures shall be stipulated by the State Council.

Chapter IV Administration of Pharmaceuticals at Medical Organizations

Article 22

Medical organizations must be staffed with legally certified pharmaceutical technical personnel. Non-pharmaceutical technical personnel may not be directly engaged in the technical work of the pharmacy.

Article 23

To make medicinal preparations, a medical organization must be examined and approved by the administrative departments of health of the provinces, autonomous regions, or municipalities directly under the central government where the organization is located , and approved and issued a Dispensing Permit for Medical Organizations by the pharmaceutical supervisory and administrative departments of the provinces, autonomous regions or municipalities directly under the central government. No medicinal preparations shall be made without a Dispensing Permit for Medical Organizations.

The Dispensing Permit for Medical Organizations shall bear a period of validity, and upon expiration a new license shall be issued after examination for its renewal.

Article 24

Medical organizations that make medicinal preparations must have facilities, a managerial system, inspection instruments, and a sanitary environment to ensure quality.

Article 25

The medicinal preparations made by medical organizations shall be of the kinds that supply the clinical needs of the units themselves but have not been supplied on the market, and must not be made until the approval of the pharmaceutical supervisory and administrative departments of the provinces, autonomous regions and municipalities directly under the central government where the units are located. The quality of the medicinal preparations made by medical organizations must be inspected in accordance with relevant regulations. Those preparations conforming to standard can be used as the doctor prescribes. Under special circumstances, with approval from the pharmaceutical supervisory and administrative departments of the central government or of the provinces, autonomous regions and municipalities directly under the central government, the medicinal preparations made by medical organizations can be shared among appointed medical organizations.

Medicinal preparations made by medical organizations may not be sold on the market.

Article 26

When purchasing pharmaceuticals, medical organizations must formulate and implement a system of quality inspection and check the certificates and other marks of pharmaceuticals. Those pharmaceuticals that do not meet the requirements of relevant regulations shall not be purchased and used.

Article 27

Prescriptions being dispensed by the dispensers of medical organizations must be checked. Pharmaceuticals listed in prescriptions must not be presumptuously changed or substituted. Prescriptions containing incompatible substances or excessive dosages shall be rejected by the dispensary. If necessary, such prescriptions can be dispensed after they have been corrected or re-signed by the doctors who wrote them.

Article 28

Rules for storage of pharmaceuticals shall be formulated and implemented by medical organizations, which must adopt necessary measures to facilitate cold storage and protection against cold, moisture, insects and rodents to ensure the quality of pharmaceuticals.

Chapter V Pharmaceutical Administration

Article 29

When producing a new medicine, it is necessary to submit information about the methods of production, quality indices, pharmacological and toxicological testing results, and other related materials and sales as required by the pharmaceutical supervisory and administrative department of the State Council, only after whose approval can clinical tests be carried out. Certifying measures for clinical test units shall be jointly formulated by the pharmaceutical supervisory and administrative department under the State Council and the administrative department of health under the State Council.

A new medicine which has completed its clinical tests and been approved after appraisal shall be issued a certificate of new medicine by the pharmaceutical supervisory and administrative department under the State Council.

Article 30

The pharmaceutical non-clinical safety appraisal and research units and the clinical test units must respectively carry out the quality control standard for pharmaceutical non-clinical research and the quality control standard for pharmaceutical clinical test.

The quality control standard for pharmaceutical non-clinical research and the quality control standard for pharmaceutical clinical test shall be formulated by the department appointed by the State Council.

Article 31

A new medicine or medicine standardized by the State can be put into production only after the pharmaceutical supervisory and administrative department under the State Council has approved it and issued a registered document of approval. However, this does not apply to the production of traditional Chinese medicinal herbs and traditional Chinese medicine prepared in ready-to-use forms that are not controlled under a registered document of approval. For those traditional Chinese medicinal herbs and traditional Chinese medicines prepared in ready-to-use forms that are controlled with registered document of approval, the pharmaceutical supervisory and administrative department under the State Council and the administrative department of traditional Chinese medicines under the State Council shall jointly formulate their type catalogue.

Pharmaceutical producing enterprises can produce medicine only after obtaining the registered document of approval.

Article 32

Pharmaceuticals must meet the pharmaceutical standards of the State. Article 10 (2) of this Law shall be applied to traditional Chinese medicines prepared in ready-to-use forms.

The "Pharmacopoeia of the People's Republic of China" and the pharmaceutical standards promulgated by the pharmaceutical supervisory and administrative department under the State Council shall be the State pharmaceutical standards.

The Pharmacopoeia Committee organized by the pharmaceutical supervisory and administrative department under the State Council shall be responsible for the formulation and revision of the State pharmaceutical standards. The pharmaceutical inspection institutions of the pharmaceutical supervisory and administrative department under the State Council shall be responsible for the designation of State standard and contrastive pharmaceuticals.

Article 33

The pharmaceutical supervisory and administrative department under the State Council may organize pharmaceutical, medicinal and other technological personnel to carry out examination and evaluation of new medicines, and to reevaluate medicines already placed into production.

Article 34

Pharmaceutical producing enterprises, pharmaceutical trading enterprises and medical organizations must purchase pharmaceuticals from the qualified enterprises with the certificates for production and trade of pharmaceuticals. However, this does not apply to the purchase of the traditional Chinese medicinal herbs which are not controlled under the registered document of approval.

Article 35

For narcotics, psychotropic substances, toxic drugs for medicinal use, and radioactive drugs, the State Council shall formulate administrative measures to carry out special control.

Article 36

The State Council shall formulate detailed measures to carry out a protection system for the categorization of traditional Chinese medicines.

Article 37

The State Council shall formulate detailed measures to carry out a classified control system for prescription pharmaceuticals and non-prescription pharmaceuticals.

Article 38

Import of medicines whose curative effects are uncertain or poor, or which produce adverse reactions or have other harmful effects on people's health shall be prohibited.

Article 39

The import of medicines must go through examinations organized by the pharmaceutical supervisory and administrative department under the State Council. Those confirmed to conform to quality standards to be safe and effective can be approved to be imported and shall be issued a registered certificate for import.

Medicines to be imported in small quantities for urgent clinical needs by medical organizations or for personal use shall go through import formalities according to relevant regulations of the State.

Article 40

Pharmaceuticals must be imported through the ports which allow the import of pharmaceuticals, and the pharmaceutical import enterprise shall submit a report to the pharmaceutical supervisory and administrative department of the place where the port is located. Customs shall rely on the Import Pharmaceuticals Customs Form issued by the pharmaceutical supervisory and administrative department to proceed. Those without the Import Pharmaceuticals Customs Form shall not be permitted to pass through customs.

The pharmaceutical supervisory and administrative department of the place where the port is located shall notify the pharmaceutical inspection institution to carry out selective examinations and inspections on the imported pharmaceuticals according to the regulations stipulated by the pharmaceutical supervisory and administrative department under the State Council, and to collect inspection fees according to Article 41 (2) of this Law.

The nomination of the ports allowable for import of pharmaceuticals shall be jointly conducted by the pharmaceutical supervisory and administrative department under the State Council and the Customs Headquarters, and be reported to the State Council for approval.

Article 41

The pharmaceutical supervisory and administrative department under the State Council shall appoint inspection institutions to carry out inspections before the sale and import of the following pharmaceuticals. Those having not passed the inspection shall not be allowed to be sold or imported.

(1)

Bio-products prescribed by the pharmaceutical supervisory and administrative department of the State Council.

(2)

Pharmaceuticals to be sold for the first time in China.

(3)

Other pharmaceuticals prescribed by the State Council.

The inspection fee and charge standards for the above-mentioned pharmaceuticals shall be jointly checked, ratified and promulgated by the financial department under the State Council and the competent authority of price control under the State Council. The measures for the collection of inspection fees shall be jointly formulated by the financial department under the State Council and the pharmaceutical supervisory and administrative department under the State Council.

Article 42

The pharmaceutical supervisory and administrative department under the State Council shall organize investigations on medicines which have been approved for production or import. It shall revoke the registered documents of approval or the registered certificate of import if it discovers that the curative effects of the medicines are uncertain or poor, that they produce serious adverse reactions, or that for other reasons they are harmful to people's health.

The medicines whose registered documents of approval or registered certificate of import have been revoked shall not be allowed to be produced, imported, sold or used. Those which have already been produced or imported shall be destroyed or disposed of under the supervision of the local pharmaceutical supervisory and administrative departments.

Article 43

A pharmaceutical reserve system shall be carried out by the State.

In case of serious disasters, plagues and other sudden emergencies, the department prescribed by the State Council can requisite the pharmaceuticals of enterprises to deal with such emergencies.

Article 44

The State Council shall have the power to restrict or prohibit the export of the pharmaceuticals which are in short supply in the domestic market.

Article 45

Import or export licenses issued by the pharmaceutical supervisory and administrative department under the State Council are required for the import or export of narcotics and psychotropic substances falling within the restricted scope prescribed by the State.

Article 46

Newly discovered domestic medicinal plants or medicinal plants introduced from abroad may be sold only after they have been examined and approved by the pharmaceutical supervisory and administrative department under the State Council.

Article 47

Measures for controlling medicinal materials traditionally used by local people in certain regions shall be jointly formulated by the pharmaceutical supervisory and administrative department under the State Council and the administrative department of traditional Chinese medicines under the State Council.

Article 48

The production (including preparation, which also applies to the following) and sale of fake medicines are prohibited. A fake medicine has any one of the following characteristics:

(1)

Its components are different from those prescribed by state pharmaceutical standards.

(2)

A non-medical substance is passed off as a medicine, or one medicine is passed off as another.

A medicine shall be handled as fake medicine in any of the following cases:

(1)

Where the use of the medicine has been prohibited by the pharmaceutical supervisory and administrative department under the State Council;

(2)

Where the medicine is produced and imported without an approval dictated according to this Law, or the medicine is sold without being inspected as dictated according to this Law;

(3)

Where the medicine has deteriorated; or

(4)

Where the medicine has been contaminated;

(5)

Where the medicine has been produced with pharmaceutical materials without obtaining the dictated registration document of approval for the materials.

(6)

Where the indications or the functions marked on the labels of the pharmaceuticals do not fall within the prescribed scope.

Article 49

It is prohibited to produce and sell medicines of inferior quality, referring to the medicines whose components do not conform in quantity to that required by State pharmaceutical standards. A medicine shall be handled as medicine of inferior quality in any of the following cases:

(1)

An expiry date is not indicated or is altered; or

(2)

A registration number is not indicated or is altered; or

(3)

The medicine has passed its expiration date; or

(4)

The packages and containers which have direct contact with pharmaceuticals have not obtained approval; or

(5)

The medicine has been added presumptuously with color or preservative additives, spice, disguising odor or supplementary materials; or

(6)

The medicine fails to meet the prescribed standards in other respects.

Article 50

The names of the pharmaceuticals listed in the State pharmaceutical standards are the generic names of the pharmaceuticals. Those names that have become the generic names of pharmaceuticals shall not be used as trademarks of pharmaceuticals.

Article 51

Personnel in pharmaceutical producing or trading enterprises and in medical organizations who have direct contact with medicines must undergo an annual medical examination. Persons who have contracted contagious diseases or any other disease which may contaminate the medicine shall not be allowed to engage in any work which has direct contact with pharmaceuticals.

Chapter VI Administration on Pharmaceutical Packaging

Article 52

The pharmaceutical packaging materials and containers which have direct contact with pharmaceuticals must meet the requirements of medicinal use, conform with the standards of protecting people's health and safety, and obtain the approval of the pharmaceutical supervisory and administrative departments at the same time as the approval of the pharmaceutical product.

Pharmaceutical producing enterprises shall use the packaging materials and containers which have direct contact with the pharmaceuticals only after they have obtained approval for them.

The pharmaceutical supervisory and administrative departments shall stop the use of those unqualified packaging materials and containers which have direct contact with the pharmaceuticals.

Article 53

Packaging must meet the specific quality requirements of the pharmaceuticals and facilitate their storage, transportation and medical use.

Traditional Chinese medicinal materials must be packaged before transportation. There must appear on the package the name of the medicine, place of production, date, name of the consignor, and an indication showing that the quality of the medicine meets standards.

Article 54

Packages of pharmaceuticals must be labeled and include directions for use in accordance with the regulations.

The label or directions must indicate the generic name of the medicine, components, specifications, the producer, registration number, batch number of the product, production date, expiry date, indications or major functions, directions for use, dosage, restrictions, adverse reactions and precautions.

Special indications must be printed as required on the labels of narcotics, psychotropic substances, toxic drugs for medical use, radioactive drugs, medicines for external use and non-prescriptive pharmaceuticals.

Chapter VII Administration of the Prices and Advertising of Pharmaceuticals

Article 55

For pharmaceuticals controlled by the fixed and directive pricing system of the government, the competent authority of pricing of the government shall fix and adjust the price with reason in conformity with the principles for fixing prices as prescribed by the Price Law of the PRC and according to the considerations of societal average costs, market supply and demand, and the level of societal tolerance to achieve accord between quality and price, to avoid excessive prices, and to safeguard the due interests of the users of the pharmaceuticals.

Pharmaceutical producing enterprises, trading enterprises and medical organizations must carry out the fixed price and directive price system of the government, and shall not presumptuously raise prices in any form.

Pharmaceutical producing enterprises shall provide the competent authority of pricing of the government with the producing and trading costs of pharmaceuticals and shall not refuse to report, make a false report or withhold the truth in such a report.

Article 56

For the pharmaceuticals whose prices are to be adjusted by the market, the pharmaceutical producing enterprises, trading enterprises, and medical organizations shall fix the price in conformity with the principles of fairness, rationality, honesty, good faith and accord between quality and price to provide the users of the pharmaceuticals with reasonable prices.

Pharmaceutical producing enterprises, trading enterprises and medical organizations shall abide by the regulations concerning the control on prices of pharmaceuticals prescribed by the competent authority of pricing under the State Council, shall fix and mark the retail prices of pharmaceuticals, and shall avoid sudden excessive profits and deceptive acts on pricing which will harm the interests of the users of the pharmaceuticals.

Article 57

Pharmaceutical producing enterprises, trading enterprises and medical organizations shall, in accordance with this Law, provide the competent authority of pricing of the government with information such as the actual purchasing and selling prices and quantities of the pharmaceuticals.

Article 58

Medical organizations shall provide the patient with the price

list of the pharmaceuticals used. Medical organizations appointed by medical insurance shall faithfully promulgate the prices of frequently used pharmaceuticals according to prescribed measures to enhance the reasonable use of pharmaceuticals.

Article 59

Pharmaceutical producing enterprises, trading enterprises and medical organizations are prohibited to give or receive secret commissions and other benefits during the purchasing and selling of pharmaceuticals.

Pharmaceutical producing enterprises, trading enterprises or their representatives are prohibited to give any property or other benefits under any name to the principals, buyers of pharmaceuticals, physicians and other relevant persons in the medical organizations where their pharmaceuticals are used. The principals, buyers of pharmaceuticals, physicians and other relevant persons are prohibited from receiving any property or other benefits under any name from pharmaceutical producing enterprises, trading enterprises or their agents.

Article 60

Advertisements of pharmaceuticals must be approved and issued a registration number of advertisement by the pharmaceutical supervisory and administrative departments of the provinces, autonomous regions, or municipalities directly under the central government of the place where the enterprises are located.

In the absence of such registration numbers, advertisements for any medicines may not be placed.

Prescription pharmaceuticals may be introduced in medicinal and pharmaceutical magazines jointly appointed by the administrative department of health under the State Council and the pharmaceutical supervisory and administrative department under the State Council, but shall not be advertised through mass media or publicized in any other form to the public.

Article 61

The contents of pharmaceutical advertisement must be true, legitimate, and be based on the directions for use approved by the pharmaceutical supervisory and administrative department under the State Council, and be also free of falsehood.

Advertisements of pharmaceuticals shall not contain any unscientific assertion or guarantee on effects, and shall not be endorsed using the names and images of government bodies, pharmaceutical scientific research units, academic organizations, experts, scholars, physicians and sufferers.

The advertisements of non-pharmaceuticals shall not be involved in the publicizing of pharmaceuticals.

Article 62

The pharmaceutical supervisory and administrative departments of the provinces, autonomous regions and municipalities directly under the central government shall inspect on the pharmaceutical advertisements they approve, and shall notify and advise the administrative departments of advertising if the advertisements is not in conformity with this Law and the Advertisement Law of the PRC. The administrative departments of advertising shall deal with such advertisements according to relevant regulations.

Article 63

In the absence of regulations as provided in this Law, the Price Law of the PRC and the Advertisement Law of the PRC shall be applied to the control of pharmaceutical prices and advertisements.

Chapter VIII Supervision over Pharmaceuticals

Article 64

Pharmaceutical supervisory and administrative departments are authorized to conduct, in accordance with laws and administrative regulations, supervision and inspection over the research,development, production and trade of pharmaceuticals which they have approved, as well as the medical organizations' use of pharmaceuticals. The units and individuals concerned shall not refuse to comply.

Pharmaceutical supervisory and administrative departments shall present certificate documents while conducting supervision and inspection, and shall not divulge technological and business secrets gained during the process of supervision and inspection.

Article 65

According to the needs of supervision and inspection, pharmaceutical supervisory and administrative departments may conduct sampling examinations on the quality of pharmaceuticals. The sampling examinations shall be conducted according to relevant regulations and shall not be charged a fee. The expenses incurred shall be dispensed with in conformity with the regulations prescribed by the State Council.

Pharmaceutical supervisory and administrative departments may take administrative coercive measures including sequestration and banning against pharmaceuticals and other relevant materials which have been proven to be of possible harm to people's health; administrative measures must be taken within seven days. For pharmaceuticals which need to be inspected, decisions regarding administrative handling must be made within 15 days from the date of issue of the inspection reports.

Article 66

The pharmaceutical supervisory and administrative departments under the State Council and of the provinces, autonomous regions and municipalities directly under the central government shall regularly promulgate the results of sampling examinations and inspections on the quality of pharmaceuticals, and shall, in the case of improperly published statements, amend such statements in the original published documents.

Article 67

If a party concerned disagrees with the inspection decision made by the inspection institutions, it may apply for re-inspection to the original inspection institutions or ones established or appointed by the pharmaceutical supervisory and administrative departments of superior levels within seven days from the date of receiving the pharmaceutical inspection decision, and may directly apply for re-inspection to the inspection institutions established or appointed by the pharmaceutical supervisory and administrative department under the State Council. The inspection institutions which have accepted the re-inspections shall conclude the re-inspections within the time limit prescribed by the pharmaceutical supervisory and administrative department under the State Council.

Article 68

Pharmaceutical supervisory and administrative departments shall follow up on the inspections of the pharmaceutical producing enterprises or pharmaceutical trading enterprises which they have certified in conformity with the "Quality Control Standard of Pharmaceutical Production" and the "Quality Control Standard of Pharmaceutical Trade."

Article 69

The local people's governments and pharmaceutical supervisory and administrative departments shall not restrict or exclude the entrance of pharmaceuticals produced according to this Law by pharmaceutical producing enterprises in other regions of the country through the excuse of conducting inspection , examination and approval of the pharmaceuticals.

Article 70

Pharmaceutical supervisory and administrative departments and the pharmaceutical inspection institutions they have established, as well as the institutions exclusively engaged in pharmaceutical inspection they have appointed, shall not participate in pharmaceutical production and trade, and shall not endorse or supervise the production and sale of pharmaceuticals in their own names.

The functionaries of pharmaceutical supervisory and administrative departments, of the pharmaceutical inspection institutions they established, and of the institutions exclusively engaged in the inspection of pharmaceuticals they appointed, shall not participate in pharmaceutical production and trade.

Article 71

A reporting system over any adverse reactions of pharmaceuticals shall be practiced by Sstate. Pharmaceutical producing enterprises, pharmaceutical trading enterprises, and medical institutions shall conduct regular surveys on the quality, curative effects and adverse reactions of the pharmaceuticals they have produced, traded or used. When serious adverse reactions possibly related to the use of the pharmaceuticals are discovered, they must be promptly reported to the pharmaceutical supervisory and administrative departments and the administrative departments of health of the provinces, autonomous regions and municipalities directly under the central government. Detailed measures shall be formulated jointly by the pharmaceutical supervisory and administrative department under the State Council and the administrative department of health under the State Council.

Regarding the pharmaceuticals which have been confirmed to cause serious adverse reactions, the pharmaceutical supervisory and administrative department under the State Council and of the provinces, autonomous regions and municipalities directly under the central government, shall take urgent control measures including the cessation of the production, sale, and use of the pharmaceuticals, shall organize appraisals within five days, and shall make decisions on their administrative handling within 15 days from the conclusion date of the appraisals.

Article 72

The organs or personnel in charge of pharmaceutical inspection in pharmaceutical producing enterprises, pharmaceutical trading enterprises and medical organizations shall receive operational guidance from the pharmaceutical inspection institutions established by local pharmaceutical supervisory and administrative departments.

CHAPTER IX Legal Responsibility

Article 73

Those who produce or trade in medicines without obtaining a Pharmaceutical Production License, Pharmaceutical Trade License, or Dispensing Permit of Medical Organizations, shall be placed under ban, have the unlawfully produced and sold medicines and any unlawful income confiscated, and may concurrently be fined a sum of money more than two but less than five times the value of the medicines unlawfully made or sold (including both sold and unsold pharmaceuticals, which also applies below). Those whose acts constitute a crime shall be investigated for criminal liabilities.

Article 74

Those who produce and sell fake medicines shall have his unlawfully produced or sold medicines and any unlawful income confiscated, and concurrently be fined a sum of money more than two but less than five times the value value of the medicines unlawfully produced and sold. Those who have an approval certificate of pharmaceuticals shall have the certificate revokeded, and be ordered to suspend production or business operations pending rectification; if the circumstances are serious, the party shall have Pharmaceutical Production License, or Pharmaceutical Trade License or Dispensing Permit of Medical Organizations revoked. Those whose acts constitute a crime shall be investigated for criminal liabilities.

Article 75

Those who produce and sell medicines of inferior quality shall have his unlawfully made and sold medicines and any unlawful income confiscated, and be concurrently fined the sum of money more than two but less than three times the value of the medicines unlawfully made or sold; if the circumstances are serious, the party shall be ordered to suspend production or business pending rectification, or have thepharmaceutical approval certificate revoked and his Pharmaceutical Production License, or Pharmaceutical Trade License or Dispensing Permit of Medical Organizations revoked. Those whose acts constitute a crime will be investigated for criminal liabilities.

Article 76

The person-in-charge or personnel directly liable in the enterprise or other unit which produces and sells fake medicines or produces and sells pharmaceuticals of inferior quality shall not be permitted to engage in the production and trade of pharmaceuticals for ten years, if the circumstances are serious.

The producers' supplementary materials, packaging materials and production equipment which are used exclusively for producing fake medicines and medicines of inferior quality shall be confiscated.

Article 77

Those who provide facilities including transportation, preservation and storage that have been or should have been aware of the fakery or inferior quality of the pharmaceuticals, shall have the entirety of his income from such transportation, preservation and storage confiscated, and concurrently be fined a sum of money more than 50% but less than three times the value of the unlawful income. Those whose acts constitute a crime shall be investigated for criminal liabilities.

Article 78

The notice of penalties on fake medicines and medicines of inferior quality shall indicate the inspection results of the inspection institution. However, this does not apply to the circumstances prescribed by Article 48 (3)(a)(b)(e)(f) and Article 49 (3) of this Law.

Article 79

Pharmaceutical producing enterprises, trading enterprises, pharmaceutical non-clinical safety appraisal research institution, and pharmaceutical clinical testing institutions, shall be served a warning and be ordered to amend themselves within a prescribed time limit if they do not carry out the stipulations of the "Quality Control Standard of Pharmaceutical Production," the "Quality Control Standard of Pharmaceutical Trade," the quality control standard of pharmaceutical non-clinical research, and the quality control standard of pharmaceutical clinical testing. Those who do not rectify their mistakes within the prescribed time limit shall be ordered to suspend production and business operations pending rectification, and be concurrently fined more than 5000 but less than 20,000 RMB. If the circumstances are serious, they shall have their Pharmaceutical Production License, Pharmaceutical Trading License or Dispensing Permit of Medical Organizations revoked.

Article 80

If any pharmaceutical producing enterprises, pharmaceutical trading enterprises or medical organizations violate Article 34 of this Law and purchase medicines from enterprises without the Pharmaceutical Production License or Pharmaceutical Trade License, they shall be ordered to amend themselves, have their unlawfully purchased medicines confiscated, and be concurrently fined the sum of money more than two but less than five times the value of the unlawfully purchased medicines. If they have obtained any unlawful income, the unlawful income shall be confiscated; if the circumstances are serious, their Pharmaceutical Production License, Pharmaceutical Trading License or Practicing Permit of Medical Organizations shall be revoked.

Article 81

Those who import pharmaceuticals with a pharmaceutical import registration document and fail to register according to this Law at the pharmaceutical supervisory and administrative department at the location of the port allowed for pharmaceutical import, shall be served a warning and be ordered to correct its mistakes within a prescribed time limit. Those who have not corrected its mistakes within the prescribed time limit shall have their registration document to import pharmaceuticals revoked.

Article 82

Those who forge, alter, trade, lease or lend licenses or pharmaceutical approval certificates, shall have their unlawful income confiscated and be concurrently fined the sum of money more than two but less than three times the amount of the unlawful income. If the party has not obtained unlawful income yet, it will be fined more than 20,000 but less than 100,000 RMB; if the circumstances are serious, the Pharmaceutical Production License, Pharmaceutical trading License or Dispensing Permit of Medical Organizations of the seller, lessor or lender shall be revoked, or the pharmaceutical approval certificate shall be recalled. Those whose acts constitute a crime shall be investigated for criminal liabilities.

Article 83

Those who violate this Law by providing false certificates or samples of documents, or obtaining the Pharmaceutical Production License, the Pharmaceutical Trading License, the Dispensing Permit of Medical Organizations or pharmaceutical approval certificates through cheating, shall have their Pharmaceutical Production License, Pharmaceutical Trade License, or Dispensing Permit of Medical Organizations revoked, have their pharmaceutical approval certificates revoked, have their application rejected for five years, and have a concurrent fine of more than 10,000 but less than 30,000 RMB be imposed upon them.

Article 84

If a medical organization sells its preparations on the market, it shall be ordered to correct its mistakes, have its unlawfully sold preparations confiscated and concurrently be fined a sum of money more than two but less than three times the value of the unlawfully sold preparations. If it has obtained any unlawful income, the unlawful income shall be confiscated.

Article 85

If a pharmaceutical trading enterprise violates Article 18 and Article 19 of this law, it shall be ordered to amend itself and be served a warning. If the circumstances are serious, its Pharmaceutical Trading License shall be revoked.

Article 86

A medicine whose mark is not in conformity with Article 54 of this Law shall be handled as fake medicine or medicine of inferior quality. In addition, a correction shall be made and a warning shall be served. If the circumstances are serious, the approval certificate of this medicine shall be revoked.

Article 87

A pharmaceutical inspection institution which produces false inspection reports, where the circumstances are so serious as to constitute a crime, shall be investigated for criminal liabilities; if a crime is not constituted, it shall be ordered to amend and be served a warning. The institution shall be concurrently imposed a fine of more than 30,000 but less than 50,000 RMB, and the person-in-charge and other personnel directly liable shall be demoted, dismissed from their posts, or expelled according to law, and shall be concurrently be fined less than 30,000RMB. If any unlawful income has been obtained, the unlawful income shall be confiscated. If the circumstances are serious, the inspection qualification certificate shall be revoked. If an inspection institution produces false inspection reports and causes serious consequences, it shall bear corresponding liabilities for compensation.

Article 88

The decision to impose administrative sanctions stipulated from Article 73 to Article 87 by this Law shall be made by the pharmaceutical supervisory and administrative departments at or above the county level in conformity with the division of functions prescribed by the pharmaceutical supervisory and administrative department under the State Council. The original issue and approval departments shall decide regarding the revocation of the Pharmaceutical Production License, the Pharmaceutical Trading License, the Dispensing Permit of Medical Organizations, the practicing permit of medical organizations, and the pharmaceutical approval certificates.

Article 89

Violations of Article 55 , 56, 57 of this Law concerning the price control of pharmaceuticals shall be punished according to the Price Law of the People's Republic of China.

Article 90

If pharmaceutical producing enterprises, trading enterprises and medical organizations give or receive commissions or other interests in secret during the purchase or sale of pharmaceuticals; and if pharmaceutical producing enterprises, trading enterprises or their agents give any property or other interests to the directors, buyers, physicians and other relevant persons in the medical organizations where their medicines are used, a fine of more than 10,000 but less than 200,000 RMB shall be imposed and the unlawful income shall be confiscated by the government body of industry and commerce administration who, if the circumstances are serious, shall revoke the business licenses of the pharmaceutical producing enterprises and pharmaceutical trading enterprises, and shall notify the pharmaceutical supervisory and administrative departments which shall revoke the Pharmaceutical Production License and Pharmaceutical Trading License. If a crime is constituted, an investigation shall be made for criminal liabilities.

Article 91

If directors or buyers of pharmaceutical producing enterprises or trading enterprises receive any property or other interests from other producing enterprises, trading enterprises or their agents during the purchase or sale of medicines, they shall be punished according to relevant regulations and shall have their unlawful income confiscated. If a crime is constituted, an investigation shall be made for criminal liabilities.

If the directors, buyers, physicians or other relevant persons in medical organizations receive any property or other interests from pharmaceutical producing enterprises, pharmaceutical trading enterprises or their agents, they shall be punished by the administrative departments of health or the work units where they work, and have their unlawful income confiscated. If practicing physicians seriously violate the law, his practice certificate shall be revoked by the administrative departments of health. If a crime is constituted, an investigation shall be made for criminal liabilities in conformity with relevant laws and regulations.

Article 92

Those who act against the administrative regulations concerning pharmaceutical advertisement as provided in this Law shall be sanctioned in conformity with the Advertisement Law of the PRC, have its advertisement registration number revoked by the pharmaceutical supervisory and administrative departments from which the registration number has been issued, and its application for the approval of the advertisement regarding this variety of medicines shall not be accepted for one year. If a crime is constituted, an investigation of criminal liabilities shall be made in conformity with relevant laws and regulations.

If a pharmaceutical supervisory or administrative department does not perform its duty of inspection on pharmaceutical advertisements which results in the publishing of advertisements containing falsehoods or other content against laws and administrative regulations, the directly liable person in charge and other responsible personnel shall be subject to administrative sanction. If their acts constitute a crime, they shall be investigated for criminal liabilities in conformity with relevant regulations.

Article 93

If pharmaceutical producing enterprises, trading enterprises or medical organizations act against this law which results in damages to the users of pharmaceuticals, they shall bear liabilities of compensation in conformity with relevant regulations.

Article 94

If a pharmaceutical supervisory and administrative department violates this law with one of the following acts, a competent authority of a higher level or a supervisory organization shall order it to withdraw the unlawfully issued certificates, revoke the pharmaceutical approval certificates, and render administrative sanctions against the directly liable person in charge and other responsible personnel. If their acts constitute a crime, they shall be investigated for criminal liabilities.

(1)

issue a certificate of qualification to an enterprise which does not meet the requirements of the "Quality Control Standard of Pharmaceutical Production" and the "Quality Control Standard of Pharmaceutical Trading," fail to conduct inspections according to relevant regulations on the enterprises which have already obtained certificates, or fail to order the unqualified enterprises to amend themselves or revoke their certificates according to relevant regulations; or

(2)

issue a Pharmaceutical Production License, a Pharmaceutical Trading License or a Dispensing Permit of Medical Organizations to a unit which does not meet legal requirements;

(3)

issue a registration certificate of import to a medicine which does not meet the requirements for import; or

(4)

approve a clinic test when the requirements for clinic tests are not met, or issue certificates of new medicines and pharmaceutical approval document numbers when requirements for production are not met.

Article 95

If a pharmaceutical supervisory and administrative department, or an inspection institution it has established, or an organization exclusively engaged in pharmaceutical inspection it has appointed, participates in the production and trade of pharmaceuticals, the responsible authority of a higher level or a supervisory organization shall order it to amend itself and have its unlawful income confiscated. If the circumstances are serious, the directly liable person in charge and other responsible personnel shall be subject to administrative sanctions.

If a staff member in a pharmaceutical supervisory and administrative department, or in an inspection institution it has established, or in an organization exclusively engaged in pharmaceutical inspection it has appointed, participates in the production and trade of pharmaceuticals, he or she shall be subject to administrative sanction.

Article 96

If a pharmaceutical supervisory and administrative department or a pharmaceutical inspection institution it has established or appointed unlawfully collects inspection fees during a pharmaceutical supervision and inspection, it shall be ordered by the government bodies concerned to make reimbursements, and the directly liable person and other responsible personnel shall be subject to administrative sanctions. If the circumstances are serious, the certificate of qualification of the inspection institution which has unlawfully collected inspection fees shall be revoked.

Article 97

A pharmaceutical supervisory and administrative department shall perform its duty of supervision and inspection according to laws and regulations, and shall supervise the production and trade of the enterprises which have obtained a Pharmaceutical Production License or a Pharmaceutical Trade License according to the regulations of this Law.

If an enterprise which has obtained a Pharmaceutical Production License or a Pharmaceutical Trade License produces and sells fake medicines and medicines of inferior quality, the enterprise shall be investigated for legal liabilities according to laws and regulations. In addition, the directly liable person in charge and other responsible personnel in the pharmaceutical supervisory and administrative department who have neglected or have been derelict in their duty shall be subject to administrative sanction. If a crime is constituted, the party shall be investigated for criminal liabilities according to laws and regulations.

Article 98

A pharmaceutical supervisory and administrative department shall, within a prescribed time limit, order a pharmaceutical supervisory and administrative department of a lower level to correct an administrative act which is not in conformity with this Law. If the administrative act is not corrected within the prescribed time limit, the department shall have the power to change or repeal it.

Article 99

If the personnel of the pharmaceutical supervision and administration misuse their authority, engage in irregular practices due to favoritism, or neglect their duties to such an extent that a crime is constituted, they shall be investigated for criminal liabilities. If their acts have not constituted a crime, they shall be subject to administrative sanctions.

Article 100

If a Pharmaceutical Production License or a Pharmaceutical Trade License is revoked according to this Law, the pharmaceutical supervisory and administrative department shall notify the industry and commerce administrative department to alter or annul the registration.

Article 101

The value of goods as prescribed in this chapter is designated according to the marked price of the unlawfully made or sold medicines. In the absence of a marked price, the value of goods shall be designated according to the market price of pharmaceuticals of the same kind.

Chapter X Supplementary Provisions

Article 102

For the purpose of this Law, the following definitions are offered:

" Pharmaceuticals " means the articles intended for use in the prevention, treatment or diagnosis of human diseases, or intended to effect the purposive regulation of human physiological functions, for which indications or major functions, usage and dosage are prescribed. They include raw traditional Chinese medicinal materials, traditional medicines prepared in ready-to-use forms, and other prepared Chinese medicines, medicinal chemicals and their preparations, antibiotics, biochemical medicines, radioactive drugs, serums, vaccines, blood products, diagnostic aids, etc.

" Supplementary materials " means the excipients and additives used for the production and dispensing of pharmaceuticals.

" Pharmaceutical producing enterprise " means an enterprise exclusively or partly engaged in the production of pharmaceuticals.

" Pharmaceutical trading enterprise " means an enterprise exclusively or partly engaged in the trade of pharmaceuticals.

Article 103

Measures for the control of cultivation, collection and breeding of all categories of medicinal materials used in traditional Chinese medicine shall be seperately formulated by the State Council .

Article 104

The State Council shall formulate detailed measures to carry out special control on the circulation of preventive bioproducts.

Article 105

Detailed measures for the implementation of this law by the Chinese People's Army shall be formulated by the State Council and the Central Military Committee of the State on the basis of this Law.

Article 106

This Law shall enter into force as of December 1, 2001.