(Adopted at the 7th Meeting of the Standing Committee of the Sixth National People's Congress on September 20, 1984; revised for the first time at the 20th Meeting of the Standing Committee of the Ninth National People's Congress on February 28, 2001; amended for the first time in accordance with the Decision to Amend Seven Laws Including the Marine Environment Protection Law of the People's Republic of China at the 6th Meeting of the Standing Committee of the Twelfth National People's Congress on December 28, 2013; amended for the second time in accordance with the Decision to Amend the Drug Administration Law of the People's Republic of China at the 14th Meeting of the Standing Committee of the Twelfth National People's Congress on April 24, 2015; and revised for the second time at the 12th Meeting of the Standing Committee of the Thirteenth National People's Congress on August 26, 2019)

TABLE OF CONTENTS

Chapter I General Provisions

Chapter II Research and Development and Registration of Drugs

Chapter III Holders of Marketing Authorization for Drugs

Chapter IV Manufacture of Drugs

Chapter V Distribution of Drugs

Chapter VI Control over Pharmaceutical Affairs in Medical Institutions

Chapter VII Control over Post-market of Drugs

Chapter VIII Pricing and Advertising of Drugs

Chapter IX Reserves and Supply of Drugs

Chapter X Supervision and Administration

Chapter XI Legal Liabilities

Chapter XII Supplementary Provisions

Chapter I General Provisions

Article 1. This Law is enacted tostrengthen drug administration, to ensuredrug quality, to guarantee the drug safety and legitimate rights and interests for the public, and to protect and promote public health.

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

Drugs referred to in this Lawrefer to articles which are used in the prevention, treatment, or diagnosis of human diseases and intended for the regulation of the physiological functions of human beings, for which indications, usage and dosageare established, including Chinese crude drugs, chemical drugs, and biological products.

Article 3.Drug administration shall center around people's health, adhere to the principles of risk management, whole process management and control, and social co-governance, and by establishment of a scientific and strict regulatory regime, comprehensively improve drug quality, and guarantee the safety, efficacy, and accessibility of drugs.

Article 4. The state develops both modern and traditional medicines to give full play to their role in prevention and treatment of disease and in maintenance of health.

The state protects the resources of natural crude drugs and the varieties of Chinese crude drugs, and encourages the cultivation of Chinese crude drugs of recognized quality and efficacy.

Article 5. 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 6. In drug administration, the state implements a marketing authorization holder system for drugs. Holders of marketing authorization for drugs shall be responsible for the safety, efficacy, and quality controllability of drugs during the whole process of research and development, production, distribution, and use of drugs in accordance with the law.

Article 7. The research and development, production, distribution, and use of drugs shall comply with laws, regulations, rules, standards and specifications, and the authenticity, accuracy, integrity, and traceability of information during the whole process shall be ensured.

Article 8. The drug regulatory department under the State Council shall be responsible for drug supervision and administration nationwide. The relevant departments under the State Council shall be responsible for supervision and administrationrelated to drugs within limits of their duties. The drug regulatory department under the State Council shall cooperate with the relevant departments under the State Council in implementing national general plans for pharmaceutical industry development and industry policies.

The drug regulatory department underthe people's governments of provinces, autonomous regions and municipalities directly under the central government shall be responsible for the supervision and administration of drugs within their respective administrative areas. The department of a people's government at or above the districted city or county level charged with the duty of supervision and administration of drugs (“drug regulatory department”) shall be responsible for the supervision and administration of drugs within its administrative area. The relevant departments of a local people's government at or above the county level shall be responsible for supervision and administration related to drugs within limits of their duties.

Article 9. Local people's governments at and above the county level shall be responsible for the supervision and administration of drugs within their respective administrative areas, lead, organize, and coordinate in a unified manner the supervision and administration of drugs as well as drug safety emergency response work within their respective administrative areas, and establish and improve their supervision and administration working mechanisms and information sharing mechanisms for drugs.

Article 10. Local people's governments at and above the county level shall incorporatedrug safety work in the national economic and social development plans at their respective levels, list the funding for drug safety work in their respective budgets, strengthen thebuilding ofdrug supervision and administration capabilities, and provide guarantees for drug safety work.

Article 11. The specialized technical institutions for drugs established or designated by the drug regulatory department shall undertake the review, inspection, verification, monitoring，evaluation andother work required for the implementation of supervision and administration of drugs in accordance with the law.

Article 12. The state establishes and improves a drug traceability system. The drug regulatory department under the State Council shall formulate unified drug traceability standards and specifications, advance the interconnection and mutual sharing of drug traceability information, and achieve drug traceability.

The state establishes a pharmacovigilance system to monitor, identify, assess, and control adverse reactions to drugs and other harmful reactions associated with the use of drugs.

Article 13. The people's governments at all levels and their relevant departments and the pharmaceutical industry associations, among others, shall strengthen publicity and education on drug safety, and widely disseminate drug safety laws and regulations and other knowledge.

News media shall, in the public interest, conduct publicity on drug safety laws and regulations and other knowledge, and implement supervision over illegal activities related to drugs by public opinion. Publicity and coverage on drugs shall be comprehensive, scientific, objectiveand fair.

Article 14. Pharmaceutical industry associations shall strengthen industry self-regulation, establish and improve industry norms, promote the building of industry integrity systems, and guide and supervise their members in the lawful production and distribution, among others, of drugs.

Article 15. The people's governments at and above the county level and their relevant departments shall, in accordance with the relevant provisions issued by the state, commend and reward institutions and individuals which have made outstanding contributions to the research and development, production, distribution, use, supervision, and administration of drugs.

Chapter II Research andDevelopment and Registration of Drugs

Article 16. The state supports pharmaceutical innovations oriented to clinical value with clear or special therapeutic effects on human diseases, encourages the research and development of new drugs which have new therapeutic mechanisms, treat serious life-threatening diseases or rare diseases, or have multi-target systematic regulation and intervention functions for human body, among others, and promotes the advancement of pharmaceutical technology.

The state encourages the science and technology research on Chinese crude drugs and the development of pharmaceuticals by using modern science and technology and traditional research methods for Chinese crude drugs, establishes and improves a technical evaluation system conforming to the characteristics of Chinese crude drugs, and promotes Chinese crude drug inheritance and innovation.

The state adopts effective measures to encourage pediatric drug research anddevelopment and innovation, supports the development of new varieties, dosage forms, and specifications of pediatric drugs which conform to the physiological characteristics of children, and prioritizes the evaluation and approval of pediatric drugs.

Article 17. The research and development of drugs shall comply with the good laboratory practice for nonclinical laboratory studies (“GLP”) for pharmaceuticals and the good clinical practice (“GCP”) for pharmaceuticals, and the continuing compliance with the statutory requirements shall be ensured during the whole process of research and development of drugs.

The GLP and GCP shall be formulated by the drug regulatory department under the State Council together with the relevant departments under the State Council.

Article 18. Nonclinical laboratory studies for pharmaceuticals shall be conducted in compliance with the relevant provisions issued by the state, with the personnel, site, equipment, instruments, and management system appropriate for the study project, and the authenticity of the relevant data, information, and samples shall be ensured.

Article 19. To conduct pharmaceutical clinical trials, the research and development methods, quality indicators, results of pharmacological and toxicological tests, and other relevant data, information, and samples shall be truthfully reported in accordance with the rules of the drug regulatory department under the State Council, and be subject to the approval of the drug regulatory department under the State Council. The drug regulatory department under the State Council shall, within 60 working days of accepting an application for a clinical trial, decide whether to grant the application and notify the sponsor, and shall be deemed to have granted the application if the sponsor is not notified within the time limit. Bioequivalence studies, if any, shall be reported to the drug regulatory department under the State Council for recordation.

Pharmaceutical clinical trials shall be conducted in clinical trial institutions which meet the corresponding conditions. Pharmaceutical clinical trial institutions shall be subject to recordation management, and the specific measures shall be developed jointly by the drug regulatory department under the State Council and the health department under the State Council.

Article 20. Pharmaceutical clinical trials shall be conducted in conformity with ethical principles, and clinical trial protocols shall be developed, subject to the review and consent of the ethics committee.

The ethics committee shall establish a working system of ethical review, ensure that the process of ethical review is independent, objective, and fair, oversee the conduct of pharmaceutical clinical trials in a well-regulated manner, protect the legitimate rights and interests of human subjects, and safeguard the public interest.

Article 21. In the implementation of pharmaceutical clinical trials, the objectives, risks, and other particulars of clinical trials shall be truthfully stated and explained to human subjects or their guardians, informed consent forms voluntarily signed by human subjects or their guardians shall be obtained, and effective measures shall be adopted to protect the legitimate rights and interests of human subjects.

Article 22. Where any safety issue or other risk is discovered during a pharmaceutical clinical trial, the sponsor of the clinical trial shall, in a timely manner, adjust the clinical trial protocol or suspend or terminate the clinical trial, and report to the drug regulatory department under the State Council. When necessary, the drug regulatory department under the State Council may order adjustment of the clinical trial protocol or suspension or termination of the clinical trial.

Article 23. Pharmaceuticals in clinical trials intended for the treatment of serious life-threatening diseases for which there is no effective means of treatment may, upon review and informed consent, be administered to patients with the same conditions within the institution conducting the clinical trials, provided that such pharmaceuticals may be beneficial as indicated by medical observation and it is in conformity with ethical principles.

Article 24.Drugs to be marketed in China shall be subject to the approval of the drug regulatory department under the State Council, and a drug registration certificate shall be obtained for them, except for Chinese crude drugs and the prepared slices of Chinese crude drugs not subject to approval management. The catalogs of Chinese crude drugs and the prepared slices of Chinese crude drugs subject to approval management shall be formulated by the drug regulatory department under the State Council together with the traditional Chinese medicine department underthe State Council.

To apply for registration of a drug, the applicant shall provide authentic, sufficient, and reliable data, information, and samples, evidencing the safety, efficacy, and quality controllability of the drug.

Article 25. For a drug under an application for registration, the drug regulatory department under the State Council shall arrange for pharmaceutical, medical, and other technical personnel to conduct an evaluation to review the safety, efficacy, and quality controllability of the drug and the applicant's capabilities of quality management, risk prevention and control, and payment of damages, among others; and if the prescribed conditions are met, thedrug registration certificate shall be issued.

In approving drugs, the drug regulatory department under the State Council shall concurrently evaluate and approve chemical drug substances, concurrently evaluate the relevant excipients and packaging materials and containers immediately in contact with drugs, and concurrently review and approve the quality standards, production processes, labels, and insert sheets of drugs.

Excipientsreferred to in this Law refer to the vehicles and additives used for drug productionand prescription dispensing.

Article 26.Drugs intended for the treatment of serious life-threatening diseases for which there is no effective means of treatment or urgently needed for public health may be conditionally approved with the relevant matters stated in the drug registration certificate for them, provided that data from pharmaceutical clinical trials have indicated any therapeutic effects and their clinical values are predictable.

Article 27. The drug regulatory department under the State Council shall improve the working system of evaluation and approval of drugs, strengthen capacity building, establish and improve the communication and exchange, expert advice, and other mechanisms, optimize the processes of evaluation and approval, and improve the efficiency of eval       uation and approval.

The evaluation conclusion and basis for a drug approved for marketing shall be disclosed to the public in accordance with the law to receive supervision by the public. Trade secrets known during evaluation and approval shall be kept confidential.

Article 28.Drugs shall meet the national drug standards. Where any drug quality standards approved by the drug regulatory department under the State Council are higher than the national drug standards, the approved drug quality standards shall prevail; and absent national drug standards, the approved drug quality standards shall be met.

The Pharmacopoeia of the People's Republic of China and the drug standards issued by the drug regulatory department under the State Council shall be the national drug standards.

The drug regulatory department under the State Council shall, together with the health department under the State Council, organize a pharmacopoeia committee, which shall be responsible for the formulation and revision of the national drug standards.

The drugtesting institutions established or designated by the drug regulatory department under the State Council shall be responsible for defining the national drug standard substance and reference substance.

Article 29.A drugname listed in the national drug standards is anadopted name of the drug in China. Such an adopted namemay not be used as a trademark of drugs.

Chapter III Holders of Marketing Authorization for Drugs

Article 30.Holders of marketing authorization for drugsrefer to enterprises or pharmaceutical research and development institutions, among others, which have obtained a drug registration certificates.

Holders of marketing authorization for drugs shall be responsible for the nonclinical laboratory studies, clinical trials, production, distribution, post-market studies, and surveillance, reporting, and disposition of adverse reactions, among others, of drugs in accordance with the provisions of this Law. Any other institutions or individuals engaged in the research and development, production, distribution, storage, transportation, and use, among others, of drugs shall assume corresponding responsibility in accordance with the law.

The legal representative or the primary person in charge of the holders of marketing authorization for drugs shall be fully responsible for drug quality.

Article 31.Holdersof marketing authorization for drugsshall establish a drug quality assurance system, and employ specialized personnel independently responsible for drug quality management.

Holders of marketing authorization for drugs shall regularly review the quality management systems of the authorized manufacturers and distributors of the approved drug, and oversee their continuing capabilities of quality assurance and control.

Article 32.Holders of marketing authorization for drugs may manufacture the drugs itself or authorize a drug manufacturer to manufacture the drugs.

Holders of marketing authorization for drugs shall obtain a drug manufacturing certificate in accordance with the provisions of this Law if it manufactures the drugs itself; or if it authorizes a drug manufacturer to manufacture the drugs, the authorized drug manufacturer shall meet the prescribed conditions. Holders of marketing authorization for drugs and the authorized manufacturer shall enter into an agreement on the authorized manufacture and a quality agreement, and strictly perform the obligations under the agreements.

The drug regulatory department under the State Council shall formulate the guidance on quality agreements for the authorized manufacture of drugs, and guide and oversee the holders of marketing authorization for drugs and authorized manufacturers in performing their obligations to assure drug quality.

Holders of marketing authorization for drugsmay not outsource the manufacture of blood products, narcotic drugs, psychotropic substances, toxic drugs for medical use, and pharmaceutical precursor chemicals, except as otherwise specified by the drug regulatory department under the State Council.

Article 33.Holders of marketing authorization for drugs shall establish the rules and procedures for the release of drugs to be placed on the market, review the ex-factory drugs released by a drug manufacturer, and grant release only upon signature of the quality authorizingperson. Drugs in nonconformity with the national drug standards may not be released.

Article 34.Holders of marketing authorization for drugs may themselvessell the drug for which a drug registration certificate has been obtained, or authorize a drug distributor to sell the drugs. Holders of marketing authorization for drugs engaged in the retailing of drugs shall obtain a drug distribution certificate.

Holders of marketing authorization for drugs shall meet the conditions as set forth in Article 52 of this Law if theysell the drugsthemselves; or if theyauthorize a drug distributor to sell the drugs, the authorized drug distributor shall meet the prescribed conditions. Holders of marketing authorization for drugs and the authorized distributor shall enter into an agreement on the authorized distribution, and strictly perform the obligations under the agreement.

Article 35. Where holders of marketing authorization for drugs,drug manufacturersordrug distributors outsource the storage or transportation of drugs, theyshall assess the quality assurance and risk management capabilities of the authorized service provider, enter into a storage or transportation agreement with the authorized service provider, covering, among others, the liability for drug quality and the operating rules and procedures, and oversee the authorized service provider.

Article 36.Holders of marketing authorization for drugs, drug manufacturers,drug distributors and medical institutions shall establish and implement their drug traceability systems, provide traceability information as required, and ensure the traceability of drugs.

Article 37.Holders of marketing authorization for drugs shall establish an annual reporting system, and annually report theirmanufacture and sale of drugs, post-market studies, risk management, and other information to the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government as required.

Article 38. Where a holder of marketing authorization for drugs is an overseas enterprise, the legal person of a corporate enterprise in China designated by it shall perform the obligations of the holder of marketing authorization for drugs, and assume joint and several liabilities with the holder of marketing authorization for drugs.

Article 39. A manufacturer of the prepared slices of Chinese crude drugs shall perform the relevant obligations of holders of marketing authorization for drugs, implement the whole process management of the manufacture and sale of the prepared slices of Chinese crude drugs, establish a traceability system of the prepared slices of Chinese crude drugs, and ensure the safety, efficacy, and traceability of the prepared slices of Chinese crude drugs.

Article 40.Holdersof marketing authorization for drugs may assign the marketing authorization for drugswith the approval of the drug regulatory department under the State Council. The assignee shall have the capabilities of quality management, risk prevention and control, and payment of damages, among others, to ensure the safety, efficacy, and quality controllability of drugs, and perform the obligations of the holders of marketing authorization for drugs.

Chapter IV Manufacture of Drugs

Article 41. To be engaged in the manufacture of drugs, one shall be subject to the approval of the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government where it is located, and obtain adrug manufacturing certificate. No drugs may be manufactured without the drug manufacturing certificate.

Thevalid term and scope of manufacturing shall be indicated in the drug manufacturing certificate, and upon expiration, shall be reissued after examination.

Article 42. To be engaged in the manufacture of drugs, one 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 quality of drugs and complywith the requirements of the good manufacturing practice (“GMP”) for drugs formulated by the drug regulatory department under the State Council in accordance with this Law.

Article 43. One engaged in the manufacture of drugs shall comply with the GMP for drugs, establish and improve a quality management system for the manufacture of drugs, and ensure the continuing compliance of the whole process of manufacture of drugs with the statutory requirements.

The legal representative or the primary person in charge of a drug manufacturer shall be fully responsible for the enterprise's manufacture of drugs.

Article 44.Drugs shall be manufactured in accordance with the national drug standards and the manufacturing processes reviewed and approved by the drug regulatory department under the State Council. The records of manufacture and inspection shall be complete and accurate, and may not be fabricated.

Prepared slices of Chinese crude drugsshall be processed in accordance with the national drug standards; those not covered by the national drug standards shall be processed in accordance with the processing specifications formulated by the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government. The processing specifications formulated by the drug regulatory department underthe people's government underprovinces, autonomous regions andmunicipalitiesdirectly under the central government shall be submitted to the drug regulatory department under the State Council for record. Nodrugsthat do not meet the national drug standards or that are not processed in accordance with the processing specifications for the prepared slices of Chinese crude drugs formulated by the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government may be released or be sold.

Article 45. The drug substances and excipients needed for the manufacture of drugs shall meet the requirements for medicinal use and the relevant requirements of the GMP for drugs.

In the manufacture of drugs, the suppliers of drug substances and excipients, among others, shall be examined as required to ensure that the drug substances and excipients, among others, purchased and used meet the requirements of the preceding paragraph.

Article 46. Packaging materials and containers immediately in contact with drugs shall meet the requirements for medicinal use, and meet the standards for protecting human health and safety.

If the packaging materials and containers immediately in contact with drugsare not up to standard, the drug regulatory department shall giver orders stopping the useof such materials and containers.

Article 47.A drug manufacturer shall performquality testof thedrugs. No drugs that do not meet the national drug standards may be released.

A drug manufacturer shall establish the rules and procedures for the release of ex-factory drugs, and specify the standards and conditions for ex-factory release. Those meeting the standards and conditions may be released upon signature of the quality authorizingperson.

Article 48.Drug packaging shall conform to drug quality requirements and be convenient for storage, transportation, and medical use.

Chinese crude drugs shall be packaged for transportation. On each package shall be indicated the name of drug, the origin of production, the date and the supplier, with a quality certification mark affixed.

Article 49.A label shall be printed or stuck on the drug packaging together with aninsert sheet, as required by regulations.

The label or insert sheet shall indicatethe adopted name of the drug in China, its ingredients, specifications, marketing authorization holder with address, manufacturer with address, approval number, product batch number, production date, date of expiry, indications or functions, usage, dosage, contraindications, adverse reactions, and precautions. The language on the label and insert sheet shall be clear, and matters such as production date and date of expiry shall be marked conspicuously and easily legible.

The required marks shall be printed on the labels and insert sheets of narcotic drugs, psychotropic substances, toxic drugs for medical use, radioactive pharmaceuticals, drugs for topical use, and non-prescription drugs.

Article 50.Staff members of holdersof marketing authorization of drug, drug manufacturers, drug distributors and medical institutions who are immediately in contact with drugs shall undergo health checkup annually. No one whosuffers from infectious diseases or any other diseases which may cause contamination to drugs may engage in any work immediately in contact with drugs.

Chapter V Distribution of Drugs

Article 51. To be engaged in the wholesale distribution of drugs, one shall be subject to the approval of the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government where it is located, and obtain a drug distribution certificate. To be engaged in the retailing of drugs, one shall be subject to the approval of the drug regulatory department of the local people's government at or above the county level, and obtain the drug distribution certificate. No drugs may be distributed without the drug distribution certificate.

The valid term and scope of distribution shall be indicated in the drug distribution certificate, and upon expiration, shall be reissued after examination.

In implementing the licensure of distribution of drugs, the drug regulatory department shall also follow the principle of convenience for people's purchase of drugs, subject to the conditions as set forth in Article 52 of this Law.

Article 52. To be engaged in the distribution of drugs, one shall meet the following requirements:

(1) having legally qualified pharmacists or other 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 quality of drugs and complywith the requirements of the good supply practice (“GSP”) for drugs formulated by the drug regulatory department under the State Council in accordance with this Law.

Article 53. One engaged in the distribution of drugs shall comply with the GSP for drugs, establish and improve a quality management system for the distribution of drugs, and ensure the continuing compliance of the whole process of distribution of drugs with the statutory requirements.

The state encourages and guides the operations of drug retail chains. The headquarters of enterprises engaged in drug retail chain operations shall establish a unified quality management system, and fulfill the management responsibility for the distribution activities of member retailers.

The legal representative or the primary person in charge of a drug distributor shall be fully responsible for the enterprise's distribution of drugs.

Article 54. The state adopts a classification system for prescription and non-prescription drugs. The specific measures shall be formulated by the drug regulatory department under the State Council together with the health department under the State Council.

Article 55.Holders of marketing authorization for drugs, drug manufacturers,drug distributors and medical institutions shall purchase drugs from the holders of marketing authorization for drugs or enterprises qualified for the manufacture or distribution of drugs,except for the purchase of Chinese crude drugs not subject to approval management.

Article 56.For purchasing drugs, drug distributors shall establish and implement a purchase examination and acceptance system, and check the certificate of drug quality, labels and other marks; and nodrugs that do not meet the specified requirements may be purchased and sold.

Article 57.Drug distributors shall keep authentic and complete records when purchasing and sellingdrugs. In the records shall be indicatedtheadopted name of the drug in China, dosage form, specifications, batch number, date of expiry, holders of marketing authorization, manufacturer, purchaser or seller, purchase or sales quantity, purchase or sales price, date of purchase or sale, and other items specified by the drug regulatory department under the State Council.

Article 58.Drug distributors shall retail 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.

Pharmacists or other pharmaceutical professionals who are qualified in accordance with the law shall be responsible for the drugadministration, review and dispensing of prescriptions, guidance on rational medication, and other work of the institution.

Article 59.Drug distributors shall establish and implement asystem for drug storage, and take necessary measures toensure drug quality, such as cold storage, protection against freeze and humidity and avoidance of insects and rodents.

An examination system shall be implemented for placing drugs in and releasing them from storage.

Article 60.Chinese crude drugs may be sold at town and country fairs, except as otherwise specified by the State Council.

Article 61.Holders of marketing authorization for drugs or drug distributors which sell drugs online shall comply with the provisions on distribution of drugs of this Law. The specific administrative measures shall be formulated by the drug regulatory department under the State Council together with the health and other departments under the State Council.

Vaccines, blood products, narcotic drugs, psychotropic substances, toxic drugs for medical use, radioactive pharmaceuticals, pharmaceutical precursor chemicals, and other drugs under special administration of the state shall not be sold online.

Article 62. The provider of a third-party platform for online trading in drugs shall, in accordance with the rules of the drug regulatory department under the State Council, undergo recordation with the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government where it is located.

The provider of the third-party platform shall, in accordance with the law, examine the qualifications, among others, of holders of marketing authorization for drugsand drug distributors which apply for distribution on the platform to ensure their compliance with the statutory requirements, and manage the acts of distribution of drugs which occur on the platform.

Where the provider of the third-party platform discovers that any holders of marketing authorization for drugs or drug distributors engaged in distribution on the platform violates the provisions of this Law, it shall cease in a timely manner and report immediately the violation to the drug regulatory department of the local people's government at the county level; and if any illegal conduct discovered is serious, cease immediately the provision of online trading platform services to the violator.

Article 63. Newly discovered crude drugs and cultivated crude drugs introduced from abroad may be sold only after approval by the drug regulatory department under the State Council.

Article 64.Drugs shall be imported via the portswhere drug importation is permitted, and be registered for record by the drug importers with the regulatory departments in the place where the ports are located. The customs shall conduct customs clearance based on the drug import note issued by the drug regulatory department. The customs shall not release those drugs without the drug import note.

The drug regulatory department in the place where the port is located shall notify the drugtesting institution to conduct sampling and testing of the drugs to be imported in accordance with the rules of the drug regulatory department under the State Council.

The ports where drugs may be imported shall be proposed by the drug regulatory department under the state Council together with the General Administration of Customs and submitted to the State Council for approval.

Article 65. For clinical urgency, medical institutions may import a drug in a limited amount with the approval of the drug regulatory department under the State Council or the people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government authorized by the State Council. The imported drug shall be used within the designated medical institution for the specific medical purpose.

A small amount of drugs brought into the country for personal use shall be governed by the relevant provisions issued by the state.

Article 66.Anyone who wishesto 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 67. The import of drugs with uncertain therapeutic effects, serious adverse reactions, orother factors harmful to human healthis prohibited.

Article 68. The drug regulatory department under the State Council shall designate drugtesting institutions to test the following drugs before they aresold or at the time they are imported; and no drugs that have not been tested or fail to pass the testingmay be sold or imported:

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

(2) biological products specified by the drug regulatory department under the State Council; and

(3) other drugs specified by the State Council.

Chapter VI Control over Pharmaceutical Affairs in Medical Institutions

Article 69.A medical institution shall be staffed withlegally qualified pharmacists or other pharmaceutical professionals, responsible for the drugadministration, review and dispensing of prescriptions, guidance on rational medication, and other work of the institution. No one who is not apharmaceutical professional may directly engage in technical workin pharmacy.

Article 70.For the purchasing drugs, medical institutions shall establish and implement a purchase examination and acceptance system, and check the certificate ofdrug quality,labels and other marks; and no drugs that do not meet the specifiedrequirementsmay be purchased and used.

Article 71. A medical institution shall have the premises, equipment, warehousesand hygienic environment suitable for the drugs used, establish and implement asystem 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.

Article 72. A medical institution shall adhere to the principle of safe, effective, economical, and rational medications, use drugs rationally by following the principles for guiding clinical application of drugs, clinical diagnosis and treatment guidance, and insert sheets, among others, and review the suitability of the physician's prescriptions and medication advice.

Institutions using drugs other than medical institutions shall comply with the provisions of this Law on the use of drugs by medical institutions.

Article 73.When dispensing prescriptions, pharmacists or other pharmaceutical professionals who are qualified in accordance with the lawshall check the prescriptions, 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 dispersing only after corrections or re-signing is made by the prescribing physician.

Article 74.To dispense pharmaceutical preparations, a medical institution shall be subject to the approval of the drug regulatory department underthe people's governmentsof provinces, autonomous regionsand municipalitiesdirectly under the central government where it is located, and obtain a pharmaceutical preparation certificate for medical institution. No one may dispense pharmaceutical preparations withoutthe pharmaceutical preparation certificate for medical institution.

The valid term shall be indicated in the pharmaceutical preparation certificate for medical institution, and upon expiration, shall be reissued after examination.

Article 75.To dispense pharmaceutical preparations, the medical institution shall have the facilities, management system, testing instruments, and hygienic environment capable of assuring quality of the pharmaceutical preparations.

To dispense pharmaceutical preparations, the medical institution shall conduct according to the processes reviewed and approved, and the needed drug substances, excipients, and packaging materials, among others, shall meet the requirements for medicinal use.

Article 76.The pharmaceutical preparations to be dispensedby the medical institutions 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 the approval of the drug regulatory department underthe people's governmentsof provinces, autonomous regionsand municipalitiesdirectly under the central government where it is located,except as otherwise required by laws regarding the preparation ofChinese crude drugs preparations.

The quality of pharmaceutical preparations to be dispensedby a medical institution shall be subject to test according to regulations; and those passing the testing may be used within the institution on the basis of the physician's prescription. 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 the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government.

No pharmaceutical preparations dispensed by the medical institutions may be sold on the market.

Chapter VII Control over Post-market of Drugs

Article 77.Holders of marketing authorization for drugs shall formulate a post-market risk management plan for drugs, proactively conduct post-market studies on drugs, further validate the safety, efficacy, and quality controllability of drugs, and strengthen the continuing management of the marketed drugs.

Article 78. For a conditionally approved drug, the holders of marketing authorization for drugs shall take corresponding risk management measures, and complete relevant studies as required within the prescribed time limit; and if theyfail to complete the studies as required within the prescribed time limit or are unable to prove that the benefits of the drug outweigh the risks of it, the drug regulatory department under the State Council shall take action in accordance with the law, and even cancel the drug registration certificate.

Article 79.Modifications in the process of manufacture of drugs shall be managed by classification according to the risks posed by them to the safety, efficacy, and quality controllability of drugs and the degrees of their impacts. Significant modifications shall be subject to the approval of the drug regulatory department under the State Council, and any other modification shall undergo recordation or be reported in accordance with the rules of the drug regulatory department under the State Council.

Holders of marketing authorization for drugs shall, in accordance with the rules of the drug regulatory department under the State Council, comprehensively assess and verify the impact of any modification on the safety, efficacy, and quality controllability of drugs.

Article 80.Holders of marketing authorization for drugs shall conduct the post-market surveillance of adverse reactions to drugs, proactively collect, track and analyze information on suspected adverse reactions to drugs, and take timely risk control measures on drugs with identified risks.

Article 81.Holders of marketing authorization for drugs, drug manufacturers,drug distributors and medical institutions shall make constant investigations into quality, therapeutic effects and adverse reactions of the drugs produced, distributed or used by them. If any suspected adverse reaction is discovered, they shall report in a timely manner to the drug regulatory department and the health department. The specific measures shall be formulated by the drug regulatory department under the State Council together with the health department under the State Council.

With regard to drugs with confirmedserious adverse reactions, the drug regulatory department under the State Council or the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government shall take urgent control measures to suspend theirproduction, sale, or use based on the actual circumstances, and it shall, within five days, arrange for assessment, and, within 15 days from the date the conclusion is drawn, make an administrative decision on how to deal with the case.

Article 82. Where there is any quality problem or other hidden safety risk with adrug, the holders of marketing authorization for drugsshall immediately cease the sale of the drug, notify the relevant drug distributors and medical institutions regarding ceasing the sale and use of the drug, recall the drug already sold, publish in a timely manner the recall information, immediately cease the manufacture of the drug when necessary, and report the recall and disposition of the drug to the drug regulatory department and the health department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government. Drug manufacturers,drug distributors and medical institutions shall provide cooperation.

Where the holders of marketing authorization for drugs fail to recall the drugs as theyshall recall in accordance with the law, the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government shall order themto recall the drugs.

Article 83.Holders of marketing authorization for drugs shall, on a regular basis, conduct post-market evaluation on the safety, efficacy, and quality controllability of the marketed drugs. When necessary, the drug regulatory department under the State Council may order the holders of marketing authorization for drugs to conduct post-market evaluation or directly organize post-market evaluation.

Upon evaluation, the drug registration certificates shall be cancelled for drugs with uncertain therapeutic effects, serious adverse reactions, or other factors harmful to human health.

No drugs for which the drug registration certificates have been cancelledmay be produced, imported, sold or used.

The drug regulatory department shall supervise the destruction of or in accordance with the law, take other measures such as harmless treatment on drugs for which the drug registration certificates have been cancelled or beyond the date of expiry, among others.

Chapter VIII Pricing and Advertising of Drugs

Article 84. The state improves the drug procurement management system, conducts surveillance of drugpricing, conducts cost and price investigation of drugs, strengthens the supervisory inspection of drugpricing, investigates and punishes illegal conduct in connection with drugpricing such as price monopoly and price gouging according to law, and maintains the order of drugpricing.

Article 85. For drugs the prices of which are adjustable with the market according to law, holders of marketing authorization for drugs, drug manufacturers,drug distributors and medical institutions shall fix the prices on the principles of fairness, rationality, good faith and commensuration of price with quality, in order to provide users of drugs with rationally priced drugs.

Holders of marketing authorization for drugs, drug manufacturers,drug distributors and medical institutions shall abide by the regulations on control over drug pricesformulatedby the competent pricing department under the State Council, and fix and indicateretailing prices of drugs, and shall be prohibited from making exorbitant profits, price monopoly and price fraud, among others.

Article 86.Holders of marketing authorization for drugs, drug manufacturers, drug distributors and medical institutions shall, in accordance with the law, provide the competent pricing departments with the actual purchasing and selling prices and quantity of their drugs and other information.

Article 87. Medical institutions shall provide patients with the price lists of the drugs used, truthfully publish the prices of frequently used drugs as required, and enhance the management of rational use of drugs. The specific measures shall be formulated by the health department under the State Council.

Article 88.Holders of marketing authorization for drugs, drug manufacturers, drug distributors and medical institutions shall be prohibited from offering or acceptingrake-offs or other illicit benefits during the purchase and sale of drugs.

Holders of marketing authorization for drugs, drug manufacturers,drug distributors, or their agents shall be prohibited fromoffering, in any name, property or other illicit benefits to leading members, drugpurchasers, physicians, pharmacists, and other relevant persons of medical institutions using their drugs. The leading members, drugpurchasers, physicians, pharmacists and other relevant persons of medical institutions shall be prohibited from accepting, in any name, property or other illicit benefits offered bythe holders of marketing authorizationfor drugs, drug manufacturers,drug distributors or their agents.

Article 89.Drug advertisements shall be subject to the approval of the advertising review authority determined by the people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government where the advertiser is located; and no drug advertisement may be published without such approval.

Article 90. The content of drug advertisements shall be truthful and lawful, and shall be determined by thedrug insert sheet reviewed and approved by the drug regulatory department under the State Council, and shall not contain false content.

No categorical assertion or warranty pertaining to functionor safetymay be contained in drug advertisements; and no names or images of government departments, scientific research institutions, academic institutions, industry associations or experts, scholars, physicians, pharmacists and patients, among others, may be used as recommendation or evidence for drug advertising.

Non-drug advertisements may not deal with drug promotion.

Article 91. Where drug pricing and advertising are not governed by the provisions of this Law, the provisions of the Pricing Law of the People's Republic of China, theAnti-monopoly Law of the People's Republic of China, the Anti-unfair Competition Law of the People's Republic of China, and the Advertisement Law of the People's Republic of China, among others, shall be applicable.

Chapter IX Reserve and Supply of Drugs

Article 92. The state implements adrug reserve system, and establishesa drug reserve at both central and local levels.

When major disasters,epidemic situations or any other emergencies occur, drugs may be urgently dispatched and used in accordance with the provisions of the Emergency Response Law of the People's Republic of China.

Article 93. The state implements anessential medicine system, selects varieties of essential medicines in an appropriate quantity, strengthens the organization of manufacture and reserves, improves the capabilities to supply essential medicines, and meets the basic medication demand in disease prevention and treatment.

Article 94. The state establishes a drug supply and demand surveillance system, collects, consolidates and analyzes in a timely manner the supply and demand information on drugs in shortage, issues early warnings on drugs in shortage, and takes countermeasures.

Article 95. The state implements a listing management system of drugs in shortage. The specific measures shall be formulated by the health department under the State Council together with the drug regulatory and other departments under the State Council.

Where holders of marketing authorization for drugsceases producingdrugs in shortage, it shall report as required to the drug regulatory department under the State Council or the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government.

Article 96. The state encourages the research anddevelopment and production of drugs in shortage, and prioritizes the evaluation and approval of drugs in shortage as urgently needed clinically and new drugs intended for the prevention and treatment of diseases such as major infectious diseases and rare diseases.

Article 97. The State Council may restrict or prohibit the export of drugs in shortage. When necessary, the relevant departments under the State Council may adopt measures such as organizing production, price intervention and expanding import to ensure supply of drugs.

Holders of marketing authorization for drugs,drug manufacturers and drug distributors shall guarantee the production and supply of drugs as required.

Chapter XSupervision and Administration

Article 98.Production (including dispensing, the same below), sale and use of counterfeit drugs or substandard drugs shall be 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;

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

(3) the drugis deteriorated; and

(4) the indications or functionsindicated by thedrug are beyond the specified scope.

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

(1) the content of ingredients in the drugdoes not meet the national drug standards;

(2) the drugis contaminated;

(3) thedate of expiryis not indicated or is altered;

(4) the batch number is notindicated or is altered;

(5) the drugis beyond the date of expiry;

(6) preservatives or excipientsare added without authorization; and

(7) other cases where thedrug standards are not conformed.

No drugs may be produced or imported without a drug approval certification document,and no drugs may be manufactured by using drug substances, packaging materials and containers not evaluated and approved as required.

Article 99.Thedrug regulatory department shall, in accordance with the provisions of laws and regulations, conduct supervisory inspection on, among others, the research anddevelopment, production and distribution of drugs and the use of drugs by institutions using drugs, and when necessary, may conduct extended inspection on the institutions and individuals providing products or services for the research and development, production, distribution or use of drugs, and the institutions and individuals concerned shallprovide cooperation and shallnot refuse the inspection or conceal any facts.

Thedrug regulatory department shall prioritize the supervisory inspection on high-risk drugs.

Where evidence shows that there may be any hidden safety risk, the drug regulatory department shall, based on itssupervisory inspection, adopt measures such as admonition, interview, addressing issues within a specified time limit and suspension of production, sale, use or import, and disclose the results of inspection and disposition to the public in a timely manner.

Thedrug regulatory department shall produce credentials in conducting supervisory inspection, and keep trade secrets known during supervisory inspection confidential.

Article 100.Thedrug regulatory department may, as needed in supervision and administration, conduct selective testing of drug quality. Sampling for selective testing shall be carried out according to relevant regulations, and no fees whatever shallbe charged for sampling or testing; and the samples drawn shall be purchased. The necessary expenses shall be listed and covered in accordance with the regulations of the State Council.

Thedrug regulatory department shall seal or seizedrugs and relevant materials thereof that are proved to be potentially harmful to human health, and shall,within seven days, make an administrative disposition decision on the matter in question.Where it is necessary to test such drugs, it shall, within 15 days from the date the testing report is issued, make the administrative decision.

Article 101. The drug regulatory department under the State Council and the drug regulatory department underthe people's governments of provinces, autonomous regions, and municipalities directly under the central government shall regularly announce the results of selective testing of drug quality. Where the announcement is improper, it shall be corrected within the scope in which the original announcement is made.

Article 102. Where the party concerned has objection to the results of testing of drugs, it may, within seven days from the date it receives the testing results, apply for re-testing to the said drug testing institution, or to such an institution established or designated by the drug regulatory department at the next higher level, and it may also directly apply to the drug testing institution established or designated by the drug regulatory department under the State Council. The drug testing institution that accepts the application shall, within the time limit specified by the drug regulatory department under the State Council, draw a conclusion from the re-test.

Article 103.The drug regulatory department shall conduct inspection on the compliance of holdersof marketing authorization for drugs, drug manufacturers, drug distributors,research institutions for non-clinical pharmaceutical safety evaluation and pharmaceutical clinical trial institutions, among others, with the GMP for drugs, the GSP for drugs, the GLP for pharmaceuticals, and the GCP for pharmaceuticals, among others, and oversee their continuing compliance with the statutory requirements.

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

Article 105.The drug regulatory department establishes credit files on drug safety for holders of marketing authorization for drugs, drug manufacturers, drug distributors, research institutions for non-clinical pharmaceutical safety evaluation, pharmaceutical clinical trial institutions and medical institutions to record, among others, the grant of permits, results of routine supervisory inspection, and investigation and disposition of illegal conduct, and disclose to the public and update in a timely manner the files in accordance with the law,and shall increase the frequency of supervisory inspection of those with bad credit records, and may impose joint sanctions on them in accordance with the provisions issued by the state.

Article 106.The drug regulatory department shall publish itse-mail address and telephone number, accept requests for consultation, complaints and reports, and provide replies, conduct verification and process them in a timely manner in accordance with the law. For a report substantiated upon investigation, the reporting person shall be rewarded according to the relevant provisions.

The drug regulatory department shall keep the reporting person information confidential, and protect the legitimate rights and interests of the reporting person. If a reporting person reports on the institution employing him or her, the institution may not retaliate against the reporting person by rescinding or modifying the labor contract with him or her or otherwise.

Article 107. The state implements a unified publication system of drug safety information. The national overall status of drug safety, the drug safety risk alerts, the major drug safety events and investigation and disposition thereof, and the other information requiring unified publication as determined by the State Council shall be published in a unified manner by the drug regulatory department under the State Council. Where the impact of a drug safety risk alert or a major drug safety event and investigation and disposition thereof is limited to a particular region, such information may also be published by the drug regulatory department underthe people's government of the relevant provinces, autonomous regionsandmunicipalities directly under the central government. The aforesaid information may not be published without authorization.

The publication of drug safety information shall be in a timely, accurate and comprehensive manner, with necessary explanations to avoid misleading the public.

No institutions or individuals may fabricate or disseminate false drug safety information.

Article 108.Thepeople's government at or above the county level shall formulate an emergency preparedness and response plan for drug safety events. Holders of marketing authorization for drugs, drug manufacturers, drug distributors and medical institutions shall formulate their respective disposition plans for drug safety events, and organize training and emergency response drills.

When a drug safety event occurs, the people's government at or above the county level shall immediately organize response work in accordance with the emergency preparedness and response plan,and the relevant institution shall immediately adopt effective disposition measures to prevent any aggravation of harm.

Article 109. Where a drug regulatory department fails to discover any systemic drug safety risk in a timely manner or fails to eliminate any hidden drug safety risk within its regulatory jurisdiction in a timely manner, the people's government at the same level or the drug regulatory department under the people's government at a higher level shall interview the primary person in charge of the drug regulatory department.

Where thelocal people's government fails to fulfill its drug safety duties or fails to eliminate any regional major hidden drug safety risk in a timely manner, the people's government at a higher level or the drug regulatory department under the people's government at a higher level shall interview the primary person in charge of the local people's government.

The departments and local people's governments interviewed shall immediately adopt measures to address issues in their supervision and administration of drugs.

The interview and addressing of issues shall be incorporated in the records of review and evaluation of the drug supervision and administration work of the relevant departments and local people's governments.

Article 110.With regard to the drugs produced by holders of marketing authorization for drugs and drug manufacturers not located in the region, no local people's governments and their drug regulatory departments shall, by means of demanding drug testing or approval, restrict or denytheir access to the region.

Article 111.No drug regulatory departments and the specialized technical institutions for drugs established or designated by the departmentsshall participate inproduction and distribution of drugs,and shall not recommend or supervise the production or sale of drugs in their names.

No staff members of drug regulatory departments and the specialized technical institutions for drugs established or designated by the departmentsshall participate in production and distribution of drugs.

Article 112. Where the State Council has issued any other special provisions for the administration of narcotic drugs, psychotropic substances, toxic drugs for medical use, radioactive pharmaceuticals, and pharmaceutical precursor chemicals, among others, such other provisions shall apply.

Article 113. Where thedrug regulatory department discovers that any illegal conduct related to drugs is suspected of a crime, the case shall be transferred to the public security authority in a timely manner.

Where the actor need not be held criminally liable or is exempted from criminal punishment in accordance with the law but shall be held administratively liable, the public security authority, the people's procuratorate, or the people's court shall transfer the case to the drug regulatory department in a timely manner.

Where the public security authority, the people's procuratorate, or the people's court requests the drug regulatory department, the ecology and environment department, or any other department to provide testing conclusions, determination opinions, or assistance in harmless treatment of alleged drugs, among others, the relevant department shall provide them or assist in a timely manner.

Chapter XI Legal Liabilities

Article 114. Where any violation of this Law constitutes a crime, the violator shall be held criminally liable in accordance with the law.

Article 115.Any drug manufacturer or distributorthat, without obtaining drug manufacturing certificate, drug distribution certificate or pharmaceutical preparation certificate for medical institution, manufactures or distributes drugs shall be banned, the violator shall be ordered to shut down, the drugs illegally produced or sold and the illegal earnings therefrom shall be confiscated, and they shall also be fined not less than 15 times and notmore than 30 times the value of the drugs (including the drugs sold and not sold, the same below); and if the value of goods is under RMB 100,000 Yuan, the fine shall be calculated on the basis of a value of goods of RMB 100,000 Yuan.

Article 116. Where counterfeit drugs are produced or sold, the drugs illegally produced or sold and the illegal earnings shall be confiscated, an order shall be given to suspend production or business operation for rectification, drug approval certification document shall be revoked, and a fine not less than 15 times and not more than 30 times the value of the said drugs shall be imposed; if the value of goods is under RMB 100,000 Yuan, the fine shall be calculated on the basis of a value of goods of RMB 100,000 Yuan; if the circumstances are serious, the drug manufacturing certificate,the drug distribution certificate or the pharmaceutical preparation certificate for medical institution shall be revoked, and any corresponding application of the violator shall not be accepted for a period of ten years; and if the holder of marketing authorization for drugs is an overseas enterprise, the import of its drugs shall be prohibited for a period of ten years.

Article 117.Where substandard drugs are produced or sold, the drugs illegally produced or sold and the illegal earningsshall be confiscated, and a fine not less than 10 times and not more than 20 times the value of the said drugs shall also be imposed; if the value of goods of the drugs illegally produced or wholesaled is under RMB 100,000 Yuan, the fine shall be calculated on the basis of a value of goods of RMB100,000 Yuan, or if the value of goods of the drugs illegally retailed is under RMB10,000 Yuan, the fine shall be calculated on the basis of a value of goods of RMB10,000 Yuan; and if the circumstances are serious, an order shall be given to suspend production or business operation for rectification until the drug approval document, the drug manufacturing certificate, the drug distribution certificate, or the pharmaceutical preparation certificate for medical institutionis revoked.

Where any prepared slices of Chinese crude drugsproduced or sold fail to meet the drug standards, which, however, has not affected their safety and efficacy, the violator shall be ordered to take corrective action within a specified time limit and warned; and may be fined not less than RMB100,000 Yuan and not more than RMB500,000 Yuan.

Article 118. Where any counterfeit drugs are produced or sold, or where any substandard drugs are produced or sold with any serious circumstances, the legal representative, the primary person in charge, the directly liable executive in charge, or any other liable person of the violator shall, in addition to confiscation of his or her revenue derived from the violator during the period of occurrence of the illegal conduct, be fined not less than 30% of and not more than 3 times the revenue, and prohibited for life from engaging in the manufacture and distribution of drugs, and may be administratively detained by the public security authority for not less than 5 days and not more than 15 days.

The drug substances, excipients, packaging materials and manufacturing equipment used by the manufacturer exclusively for the manufacture of counterfeit drugs or substandard drugs shall be confiscated.

Article 119. Where an institution using drugs uses any counterfeit drugs or substandard drugs, it shall be punished according to the provisions on selling counterfeit drugs or retailing substandard drugs; and if the circumstances are serious, and the legal representative, the primary person in charge, the directly liable executive in charge or any other liable person of the violator holds a health care professional's practicing certificate, the practicing certificate shall also be revoked.

Article 120. Where any storage, transportation or other facilitating condition is provided for counterfeit drugs, substandard drugs or drugs set out in items(1) to (5) of paragraph 1 of Article 124 of this Law, and the provider knows or should have known the same, in addition to confiscation of all its revenue derived from the storage or transportation, the provider shall be fined not less than one time and not more than five times the illegal revenue; or if the circumstances are serious, it shall be fined not less than five times and not more than 15 times the illegal revenue; and if the illegal revenue is under RMB50,000 Yuan, the fine shall be calculated on the basis of RMB50,000 Yuan.

Article 121.Thedecision to impose punishment on counterfeit drugs or substandard drugs shall state the quality test conclusion of thedrugtesting institutionaccording to law.

Article 122.Where a certificate or a drug approval certification document is forged, altered, leased, lent, or illegally purchased or sold, in addition to confiscation of illegal earnings, the violator shall be fined not less than one time and not more than 5 times the illegal earnings; or if the circumstances are serious, the violator shall be fined not less than 5 times and not more than 15 times the illegal earnings, the drug manufacturing certificate,the drug distribution certificate, pharmaceutical preparation certificate for medical institution or the drug approval certification document shall be revoked, and the legal representative, the primary person in charge, the directly liable executive in charge, or any other liable person of the violator shall be fined not less than RMB 20,000 Yuan and not more than RMB 200,000 Yuan, and prohibited from engaging in the manufacture and distribution of drugs for a period of ten years, and may be administratively detained by the public security authority for not less than five days and not more than 15 days; and if the illegal earnings are under RMB 100,000 Yuan, the fine shall be calculated on the basis of RMB 100,000 Yuan.

Article 123. Where the licensure of a clinical trial, drug manufacture,drug distribution, pharmaceutical preparation for medical institution or registration of a drug, among others, is fraudulently obtained by providing any false proof, data, information, samples or other means, the relevant licensure shall be revoked, any corresponding application of the violator shall not be accepted for a period of ten years, and the violator shall be fined not less than RMB 500,000 Yuan and not more than RMB 5,000,000Yuan; and if the circumstances are serious, the legal representative, the primary person in charge, the directly liable executive in charge or any other liable person of the violator shall be fined not less than RMB 20,000 Yuan and not more than RMB 200,000 Yuan, and prohibited from engaging in the manufacture and distribution of drugs for a period of ten years, and may be administratively detained by the public security authority for not less than five days and not more than 15 days.

Article 124. For any of the following violations of this Law, the drugs illegally produced, imported or sold, illegal earnings and the drug substances, excipients, packaging materials, and manufacturing equipment used exclusively for illegal manufacture shall be confiscated, and the violator shall be ordered to cease production or business for rectification, and fined not less than 15 times and not more 30 times the value of goods of the drugs illegally produced, imported or sold; if the value of goods is under RMB 100,000 Yuan, the fine shall be calculated on the basis of RMB 100,000 Yuan; and if the circumstances are serious, the drug approval certification document and even the drug manufacturing certificate, the drug distribution certificate or the pharmaceutical preparation certificate for medical institution shall be revoked, and the legal representative, the primary person in charge, the directly liable executive in charge, or any other liable person of the violator shall, in addition to confiscation of his or her revenue derived from the violator during the period of occurrence of the illegal conduct, be fined not less than 30% of and not more than 3 times the revenue, and prohibited from engaging in the manufacture and distribution of drugs for a period of ten years or even for life, and may be administratively detained by the public security authority for not less than 5 days and not more than 15 days:

(1) manufacture or import of any drug without a drug approval certification document;

(2) manufacture or import of any drug by using a drug approval certification document obtained by fraudulent means;

(3) manufacture of any drug by using drug substances which has not been evaluated and approved;

(4) sale of any untested drug which shall be tested;

(5) manufacture or sale of any drug prohibited by the drug regulatory department under the State Council from being used;

(6) fabrication of any record of manufacture or inspection; and

(7) making any unapproved significantmodification in the process of manufacture of a drug.

Where any drug set out in items (1) to (3) of the preceding paragraph is sold, or an institution using drugs uses any drug set out in items(1) to (5) of the preceding paragraph, the violator shall be punished in accordance with the provision of the preceding paragraph; and if the circumstances are serious, and the legal representative, the primary person in charge, the directly liable executive in charge or any other liable person of the institution using drugs holds a health care professional's practicing certificate, the practicing certificate shall also be revoked.

Where a drug which has been legally marketed overseas is imported in a limited amount without approval, and the circumstances are relatively minor, a mitigated punishment may be imposed on the violator or the violator may be exempted from punishment in accordance with the law.

Article 125. For any of the following violations of this Law, thedrugs illegally produced or sold, illegal earnings, packaging materials and containersshall be confiscated, and the violator shall be ordered to cease production or business for rectification, and fined not less than RMB 500,000 Yuan and not more than RMB 5,000,000Yuan; and if the circumstances are serious, the drug approval certification document, the drug manufacturing certificate, drug distribution certificateshall be revoked, and the legal representative, the primary person in charge, the directly liable executive in charge, or any other liable person of the violator shall be fined not less than RMB 20,000 Yuan and not more than RMB 200,000 Yuan, and prohibited from engaging in the manufacture and distribution of drugs for a period of ten years and even for life:

(1) conducting any pharmaceutical clinical trial without approval;

(2) using any packaging material or container which has not been evaluated and approved and is immediately in contact with the drugs to manufacture the drugs or selling such drugs; and

(3) using any label or insert sheet which has not been reviewed and approved.

Article 126. Except as otherwise provided by this Law, a holderof marketing authorization for drugs, a drug manufacturer, a drug distributor, a research institution for non-clinical pharmaceutical safety evaluation, and a pharmaceutical clinical trial institution, among others, which fails to comply with the GMP for drugs, the GSP for drugs, the GLP for pharmaceuticals, or the GCP for pharmaceuticals, among others, shall be ordered to take corrective action within a specified time limit and warned, and if no corrective action is taken within the specified time limit, shall be fined not less than RMB 100,000 Yuan and not more than RMB 500,000 Yuan; or if the circumstances are serious, the violator shall be fined not less than RMB 500,000 Yuan and not more than RMB 2,000,000Yuan, and be ordered to cease production or business for rectification, even its drug approval certification document,drug manufacturing certificate, drug distribution certificate, among others, shall be revoked, the research institution for non-clinical pharmaceutical safety evaluation or the pharmaceutical clinical trial institution, among others, shall not conduct any non-clinical pharmaceutical safety evaluation or pharmaceutical clinical trial for a period of five years, and the legal representative, the primary person in charge, the directly liable executive in charge or any other liable person of the violator shall, in addition to confiscation of his or her revenue derived from the violator during the period of occurrence of the illegal conduct, be fined not less than 10% and not more than 50% of the revenue, and prohibited from engaging in the manufacture and distribution, among others, of drugs for a period of ten years or even for life.

Article 127. For any of the following violations of this Law, the violator shall be ordered to take corrective action within a specified time limit and warned,and if no corrective action is taken within the time limit, it shall be fined not less than RMB 100,000 Yuan and not more than RMB 500,000 Yuan:

(1) bioequivalence studies are not reported for recordation;

(2) where any safety issue or other risk is discovered during a pharmaceutical clinical trial, the sponsor of the clinical trial fails to adjust in a timely manner the clinical trial protocol or suspend or terminate the clinical trial, or fails to report to the drug regulatory department under the State Council;

(3) adrug traceability system is not established and implemented as required;

(4) an annual report is not submitted as required;

(5) a modification in the process of manufacture of drugs fails to undergo recordation or is not reported as required;

(6) no post-market risk management plan is formulated for drugs; and

(7) post-market studies or post-market evaluationfor drugs is not conducted as required.

Article. 128 Unless punishable as counterfeit drugs or substandard drugs in accordance with the law, where the labels are not printed on or glued to the packaging of drugs or theyare not accompanied with aninsert sheet as required, or the label or insert sheet fails to state the relevant information or a required mark is not printed on it as required, the violator shall be ordered to take corrective action and warned, and if the circumstances are serious, the drug registration certificate shall be revoked.

Article 129. A holder of marketing authorizationfor drugs, a drug manufacturer, adrug distributor, or a medical institution which, in violation of the provisions of this Law, fails to purchase drugs from a holder of marketing authorization for drugs or an enterprise qualified for the drug manufacture,the violator shall be ordered to take corrective action, and with confiscation of the illegally purchased drugs and illegal earnings, it shall be fined not less than two times and not more than ten times the value of goods of the illegally purchased drugs; if the circumstances are serious, the violator shall be fined not less than ten times and not more than 30 times the value of goods of the illegally purchased drugs, and the drug approval certification document, the drug manufacturing certificate, the drug distribution certificate, or medical institution practicing certificate shall be revoked; and if the value of goods is under RMB 50,000 Yuan, the fine shall be calculated on the basis of RMB 50,000 Yuan.

Article 130. A drug distributor which, in violation of the provisions of this Law, fails to keep records of purchase and sale of drugs as required, fails to correctly explain the usage, dosage and other matters when retailing drugs, or fails to dispense prescriptions as required shall be ordered to take corrective action and warned; and if the circumstances are serious, the drug distribution certificate shall be revoked.

Article 131. The provider of a third-party platform for online trading in drugs which, in violation of the provisions of this Law, fails to perform its obligation to examine qualifications, report, or cease the provision of online trading platform services, among others, shall be ordered to take corrective action, and in addition to confiscation of illegal earnings, it shall be fined not less than RMB 200,000 Yuan and not more than RMB 2,000,000Yuan; or if the circumstances are serious, it shall be ordered to cease business for rectification, and fined not less than RMB 2,000,000Yuan and not more than RMB 5,000,000Yuan.

Article 132. Where any drug for which a drug registration certificate has been obtained is imported but fails to undergo recordation as required with the drug regulatory department of the place where the port allowing the import of drugs is located, the violator shall be ordered to take corrective action within a specified time limit and warned; and if no corrective action is taken within the specified time limit, the drug registration certificate shall be revoked.

Article 133. A medical institution which, in violation of the provisions of this Law, places its preparations created from pharmaceutical preparations on the market shall be ordered to take corrective action, and in addition to confiscation of the pharmaceutical preparations illegally sold and illegal earnings, it shall be fined not less than two times and not more than five times the value of goods of the pharmaceutical preparations illegally sold; or if the circumstances are serious, it shall be fined not less than five times and not more than 15 times the value of goods of the pharmaceutical preparations illegally sold; and if the value of goods is under RMB 50,000 Yuan, the fine shall be calculated on the basis of RMB 50,000 Yuan.

Article 134. A holder of marketing authorization for drugswhich fails to conduct the surveillance of adverse reactions to drugs or report suspected adverse reactions to drugs as required shall be ordered to take corrective action within a specified time limit and warned,and if no corrective action is taken within the specified time limit, it shall be ordered to cease production or business for rectification, and fined not less than RMB 100,000 Yuan and not more than RMB 1,000,000Yuan.

A drug distributor which fails to report suspected adverse reactions to drugs as required shall be ordered to take corrective action within a specified time limit and warned,and if no corrective action is taken within the specified time limit, it shall be ordered to cease production or business for rectification, and fined not less than RMB 50,000 Yuan and not more than RMB 500,000 Yuan.

A medical institution which fails to report suspected adverse reactions to drugs as required shall be ordered to take corrective action within a specified time limit and warned,and if no corrective action is taken within the specified time limit, it shall be fined not less than RMB 50,000 Yuan and not more than RMB 500,000 Yuan.

Article 135. A holder of marketing authorization for drugs which refuses to recall a drug after the drug regulatory department underthe people's governments of provinces, autonomous regionsand municipalitiesdirectly under the central government has ordered it to recall the drug shall be fined not less than five times and not more than ten times the value of goods of the drug to be recalled; if the value of goods is under RMB 100,000 Yuan, the fine shall be calculated on the basis of RMB 100,000 Yuan; and if the circumstances are serious, the drug approval certification document, the drug manufacturing certificate, the drug distribution certificate shall be revoked, and the legal representative, the primary person in charge, the directly liable executive in charge or any other liable person of the violator shall be fined not less than RMB 20,000 Yuan and not more than RMB 200,000 Yuan. A drug manufacturer,a drug distributor or a medical institution which refuses to cooperate in a recall shall be fined not less than RMB 100,000 Yuan and not more than RMB 500,000 Yuan.

Article 136. Where a corporate enterprise in China designated by a holder of marketing authorization for drugs which is an overseas enterprise fails to perform the relevant obligations in accordance with the provisions of this Law, the provisions of this Law on the legal liability of holders of marketing authorization for drugs shall apply.

Article 137.For any of the following acts, a heavier punishment shall be imposed on the violator within the range of punishment specified by this Law:

(1) narcotic drugs, psychotropic substances, medicinal toxic drugs, radioactive pharmaceutical, and pharmaceutical precursor chemicals are simulated as other drugs, or other drugs aresimulated as the above drugs;

(2) counterfeit and substandard drugs with pregnant or parturient women or children as the main users are manufactured or sold;

(3) the biological products manufactured or sold are counterfeit and substandard drugs;

(4) counterfeit and substandard drugs are manufactured or sold, which has had any personal injury consequences;

(5) counterfeit and substandard drugs are manufactured or sold again after disposition of such violation;

(6) supervisory inspection is refused or evaded, relevant evidentiary materials are forged, destroyed, or concealed, or items placed under seal or impounded are used without permission.

Article 138.A drug testing institution which issues a false testing report shall be instructed to rectify, be given a disciplinary warning, and also be fined not less than RMB 200,000 Yuan and not more than RMB1,000,000 Yuan; the persons directly in charge and the other persons directly responsible shall, in accordance with law, be punished with demotion, dismissal, or expulsion, and in addition to confiscation of illegal earnings, fined not more than RMB50,000; and if the circumstances are serious, the qualification for testing shall be revoked. If the testing result issued by the drug testing institution is not true to the fact and losses are thus caused, the institution shall bear corresponding liability of compensation for the losses.

Article 139.The administrative sanctions prescribed in Articles 115 to 138 of this Law shall be determined by the drug regulatory departments at and above the county level according to the division of responsibility; and the revocation of licensure or withdrawal of certificateshall be determined by the department that issued and approved the certificate.

Article 140.Where a holder of marketing authorizationfor drugs, a drug manufacturer, a drug distributor, or a medical institution employs any person in violation of the provisions of this Law, the drug regulatory department or the health department shall order the termination of employment of the person, and impose a fine of not less than RMB50,000 Yuan and not more than RMB200,000 Yuan on the violator.

Article 141.Where a holder of marketing authorizationfor drugs, a drug manufacturer, a drug distributor, or a medical institution offers or accepts the rake-offs or other illicit benefits during the purchase and sale of drugs, or a holder of marketing authorizationfor drugs,a drug manufacturer, a drug distributor ortheir agent offers property or other illicit benefits to leading members, drug purchasers, physicians, pharmacists, or other relevant persons of a medical institution where their drugs are used, the market regulatory department shall confiscate illegal earnings and impose a fine of not less than RMB300,000 Yuan and not more than RMB3,000,000 Yuan on the violator; and if the circumstances are serious, it shall revoke the business license of the holder of marketing authorizationfor drugs, the drug manufacturer or the drug distributor, and the drug regulatory department shall revoke the drug approval certification document,the drug manufacturing certificate or the drug distribution certificate.

Where a holder of marketing authorizationfor drugs,a drug manufacturer or a drug distributor bribes a state employee during the research and development, manufacture, or distribution of a drug, the legal representative, the primary leading member, the directly liable executive in charge, or any other liable person of the violator shall be prohibited for life from engaging in the manufacture and distribution of drugs.

Article 142.Where aleading member, a purchaser, or any other relevant person of a holder of marketing authorizationfor drugs,a drug manufacturer or a drug distributor accepts property or other illicit benefits from another holder of marketing authorizationfor drugs,drug manufacturer, drug distributor or its agent during the purchase and sale of drugs, he or she shall, in addition to confiscation of any illegal earnings, be given sanctions in accordance with the law; and if the circumstances are serious, shall be prohibited from engaging in the manufacture and distribution of drugs for a period of five years.

Where aleading member, a drug purchaser, a physician, a pharmacist, or any other relevant person of a medical institution accepts property or other illicit benefits from a holder of marketing authorizationfor drugs, a drug manufacturer, a drug distributor ortheir agent, he or she shall be given sanctions by the health department or the entity employing him or her, in addition to confiscation of any illegal earnings; and if the circumstances are serious, his or her practicing certificate shall also be revoked.

Article 143.Where the fabrication or dissemination of false drug safety information in violation of the provisions of this Law constitutes a public security administration violation, the public security authority shall impose a public security administration punishment on the violator in accordance with the law.

Article 144.A holder of marketing authorizationfor drugs, a drug manufacturer, a drug distributor or a medical institution whose violation of the provisions of this Law has caused any damage to the users of a drug shall assume compensatory liability in accordance with the law.

A victim who sustains damage due to any drug's quality problem may claim damages from the holder of marketing authorizationfor drugs or the drug manufacturer, or claim damages from the drug distributor or the medical institution. Upon receipt of the victim's claim for damages, the first receiver liability system shall be implemented, and damages shall be paid in advance; and upon advance payment, recovery may be made in accordance with the law.

Where counterfeit and substandard drugs are manufactured or such drugsaresold or used knowingly, the victim or a close relative of the victim may, in addition to damages, claim compensation in the amount of ten times the price or three times the loss; and if the amount so calculated is under RMB1,000 Yuan, the compensation shall be RMB1,000 Yuan.

Article 145.Where a drug regulatory department or a specialized technical institution for drugs established or designated by it participates in the manufacture and distribution of drugs, the appropriate authority at a higher level shall order it to take corrective action, and confiscate any illegal revenue; and if the circumstances are serious, the persons directly in charge and other persons directly responsible shall be given sanctions in accordance with the law.

Where any employee of a drug regulatory department or a specialized technical institution for drugs established or designated by it participates in the manufacture and distribution of drugs, he or she shall be given sanctions in accordance with the law.

Article 146.Where a drug regulatory department or a drug testing institution established or designated by it illegally collects any testing fees for supervision over drug, the relevant government department shall order itto return the fees, and the persons directly in charge and other persons directly responsible shall be given sanctions in accordance with the law; and if the circumstances are serious, its testing qualification shall be revoked.

Article 147.For any of the following violations of this Law by a drug regulatory department, the relevant licensure shall be revoked, and the persons directly in charge and other persons directly responsible shall be given sanctions in accordance with the law:

(1) approving a drug clinical trial which fails to comply with the prescribed conditions;

(2) issuing a registration certificate for a drug which fails to comply with the prescribed conditions;

(3) issuing a drug manufacturing certificate, adrug distribution certificate or a pharmaceutical preparation certificate for medical institution to an entity which fails to comply with the prescribed conditions.

Article 148.For any of the following violations of this Law by a local people's government at or above the county level, the persons directly in charge and other persons directly responsible shall be punished witha demerit or a serious demerit; and if the circumstances are serious, the punishment shall be demotion, dismissal or expulsion:

(1) concealing, falsely reporting, delaying reporting, or omitting a drug safety event;

(2) failure to eliminate any major regional drug safety risk in a timely manner, resulting in the occurrence of an exceptionally major drug safety event within the administrative region or the successive occurrences of major drug safety events;

(3) ineffective performance of duties, resulting in serious adverse effects or heavy losses.

Article 149.For any of the following violations of this Law by a drug regulatory department, among others, the persons directly in charge and other persons directly responsible shall be punished with a demerit or a serious demerit; if the circumstances are relatively serious, thepunishment shall be demotion or dismissal; or if the circumstances are serious, the punishment shall be expulsion:

(1) concealing, falsely reporting, delaying reporting, or omitting a drug safety event;

(2) failure to investigate and dispose of a discovered violation of law related to drug safety in a timely manner;

(3) failure to discover a systemic drug safety risk in a timely manner, or failure to eliminate a hidden drug safety risk within its regulatory jurisdiction in a timely manner, resulting in serious effects;

(4) otherfailure to perform the duties of supervision and administration of drugs, resulting in serious adverse effects or heavy losses.

Article 150.Where any drug regulatory staff member abuses his or her powers, makes falsification for personal gain, or neglects his or her duties, he or she shall be given sanctions in accordance with the law.

Where dereliction of duty or malfeasance in office is committed during the investigation of counterfeit and substandard drugs, the persons directly in charge and other persons directly responsible of the drug regulatory department shall be given sanctions in a heavier manner in accordance with the law.

Article 151.The value of goods as mentioned in this Chapter shall be calculated at the marked price of the drugs illegally manufactured or sold; and absent the marked price, calculation shall be made at the market price of the drugs of the same kind.

Chapter XII Supplemental Provisions

Article 152.Measures for control over the cultivation, collection and breeding of Chinese crude drugs shall be governed by the provisions of the relevant laws and regulations.

Article 153.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 154.The specific measures for theenforcement of this Law by the Chinese People's Liberation Army and the Chinese People's Armed Police Force shall be formulated by the State Council and the Central Military Commission in accordance with this Law.

Article 155.This Law shall enterinto forceon December 1, 2019.