On August 26, the newly revised Drug Administration Law of the People’s Republic of China was adopted at the 12th meeting of the Standing Committee of the 13th National People’s Congress. It will come into force on December 1, 2019.

 

The revised Drug Administration Law, with 155 articles in 12 chapters, imposes tougher penalties for drug offenses.

On August 26, the newly revised Drug Administration Law was adopted at the 12th meeting of the Standing Committee of the 13th National People’s Congress.

To fix pressing issues of public concern such as fake drugs, inferior drugs, high drug prices and drug shortage, the newly revised Drug Administration Law endorses the most rigorous standards, the strictest supervision, the most severe punishment and the greatest public accountability (the “Four Strictest” regulations), and is a big step forward in the legal system to supervise drug development, drug production, drug operation and drug use.

On August 22, the 12th meeting of the Standing Committee of the 13th National People’s Congress deliberated on the revised draft of the Drug Administration Law (hereinafter referred to as “the revised draft”) again, and redefined fake and inferior drugs.

 

The Paper found from articles on fake and inferior drugs in the revised draft that unapproved new legal drugs imported from overseas are no longer treated as fake drugs, less tougher penalties will be imposed on unapproved small imports of drugs that have legally gone on sale abroad if the circumstances are relatively minor, and offenses that do not cause personal injury or delay treatment may be exempted from punishment.

Redefining Fake Drugs

Unapproved New Legal Drugs Imported from Overseas Are No Longer Treated as Fake Drugs

New anti-cancer drugs purchased from overseas, like those featured in last year’s hit movie Dying to Survive and its prototype Lu Yong case and this year’s fake drug case in Liaocheng, have been treated as fake drugs. This has drawn widespread attention.

Cabozantinib in the Liaocheng fake drug case and Gleevec in the Lu Yong case — new drugs confirmed to have treatment effects on foreign markets — were treated, according to China’s current Drug Administration Law, as fake drugs in China simply because they had not been approved by Chinese drug regulatory authorities by the time of the case.

Articles 48 and 49 of the current Drug Administration Law contain provisions on fake drugs, punishment dealt out for drugs regarded as fake, inferior drugs, and punishment dealt out for drugs regarded as inferior:

 

Fake Drugs

Where the ingredients contained in a drug do not conform to the ingredients prescribed in the national drug standards; where a non-drug is claimed to be a drug or one drug is claimed to be another drug.

 

Punishment Dealt out for Drugs Regarded as Fake

Those prohibited by the Drug Regulatory Department under the State Council; those that must be approved for production or import in accordance with this law but are not approved, or those that must be inspected in accordance with this law but are for sale without prior inspection; those that have deteriorated; those that have been contaminated; productions of bulk pharmaceutical chemicals that must obtain approval number in accordance with this law but fail to obtain it; where the indications or functions indicated are beyond the specified scope.

Inferior Drugs

Where the content of drug ingredients does not meet the national drug standards.

 

Punishment Dealt out for Drugs Regarded as Inferior

Where the term of validity is not indicated or changed; where the batch number of production is not indicated or changed; where the term of validity is exceeded; where the packaging materials and containers in direct contact with drugs are not approved; where colorants, preservatives, spices, flavoring agents and auxiliary materials are added without authorization; where other drug standards are not met.

 

On August 21, at a press conference held by the NPC Standing Committee’s Law Working Committee, Zang Tiewei, spokesman for the NPC Standing Committee’s Law WorkingCommittee, said that the current legal definition of fake and inferior drugs is too broad, covering fake and inferior drugs defined according to drug quality standards and fake and inferior drugs that fail to be approved for production. The social impact of the handling of some cases is negative, and the scope of fake and inferior drugs needs to be redefined mainly according to efficacy.

 

The revised draft submitted this time is intended to redefine fake and inferior drugs. Drugs that were originally treated as fake or inferior can either be directly included in the scope of fake and inferior drugs or listed separately.

The revised draft formulates that fake drugs include drugs with ingredients that do not conform to the provisions of the national drug standards, non-drugs that are claimed to be drugs or one drug that is claimed to be another drug, drugs that are deteriorated, and drugs with indications or functions indicated that are beyond the prescribed scope.

 

Inferior drugs include drugs with ingredients that do not meet the national drug standards, contaminated drugs, drugs that do not indicate or change the expiration date, drugs that exceed the expiration date, drugs that do not indicate or change the batch number of products, drugs that add preservatives and auxiliary materials without authorization, and other drugs that do not meet the drug standards and affect the quality of drugs.

 

Of the drugs originally “to be punished as fake drugs” or “to be punished as inferior drugs”, those that are prohibited by the Pharmaceutical Supervisory and Administrative Department under the State Council, those that must be approved for production or import but fail to be approved, those that must be inspected prior to sale but are not inspected, those whose raw materials must be approved but are not approved, and those that are delivered in unapproved packaging materials and containers that are in direct contact with drugs are explicitly prohibited from being produced, imported or sold, and strict penalties will be imposed for offenses.

 

Expert:

New Drugs Purchased from Overseas Still Involve Legal Risks

 

According to the revised draft, unapproved new legal drugs imported from overseas are no longer treated as fake drugs, less tougher penalties will be imposed on unapproved small imports of drugs that have legally gone on sale abroad, and offenses that did not cause personal injury or delay treatment may be exempted from punishment.

 

An expert who studies pharmaceutical legislation told The Paper that the Lu Yong case and the Liaocheng fake drug case are likely to recur. The revised Drug Administration Law provides regulators with a more complete legal basis for handling such incidents.

 

According to the experts, the revised draft “makes a small legal opening” for the purchase of overseas new drugs but it does not mean that it is free of constraints because there are still legal risks in overseas drug purchases.

Article 98 of the revised draft prohibits the production and import of drugs without approval, and the production of drugs using raw materials, packaging materials and containers that have not been reviewed and approved in accordance with regulations.

Article 124 of the revised draft stipulates that the production and import of drugs without approval documents and the use of unapproved bulk pharmaceutical chemicals in drug production will face the risk of confiscation of illegally produced, imported and sold drugs and illegal income, as well as raw materials, auxiliary materials, packaging materials and production equipment used in illegal production. Drug manufacturers will be ordered to suspend production or business for rectification, their drug production approval documents will be revoked or withdrawn, and a fine that is 15-30 times the value of illegally produced, imported and sold drugs will be imposed. If the value of the goods is less than RMB 100,000, it shall be treated as RMB 100,000. If the offenses are serious, the pharmaceutical production license, the pharmaceutical trading license or the pharmaceutical institution preparation license shall be revoked. The income that the legal representative, the principal responsible person, the directly responsible person and other responsible personnel earned during the occurrence of the illegal act shall be confiscated, a fine that is 1/3-3 times their income shall be imposed, and the pharmaceutical production and trading activities shall be prohibited for life. Those who violate the rules may be detained by the public security organ for 5-15 days.

 

It is worth noting that Article 124 of the revised draft also specifies that the sale and use of certain drugs should be held responsible under certain circumstances.

 

These include producing and importing drugs without obtaining drug approval documents and producing drugs using unapproved raw materials. If the seller or user illegally uses the above drugs, it shall be punished in accordance with the provisions of the preceding paragraph; if the offenses are serious, the medical personnel practicing certificate of the legal representative, the principal responsible person, the directly responsible person and other responsible personnel of the drug user shall be revoked.