The Amended Drug Administration Law

On August 26, 2019, the China’s National People’s Congress passed The Amended Drug Administration Law (the Amended DAL) which will go into effect on 01.12.2019. The revised law establishes strict standards and measures in supervision over the whole process of the pharmaceutical industry chain in order to address prominent problems within research and development, manufacturing, sales, management and use of drugs.

The first DAL was released in 1984. This is the first revision since 2001. The new law brings in some changes while consolidating many existing practices, indluding:

– Redefining the scope of counterfeit and inferior drugs
Note: The new definition of counterfeit drugs focuses the definition on active ingredients and claims. Unapproved drugs are not regarded as counterfeit anymore.

– Implementing an improved national Drug Market Authorization Holder (“MAH”) system, including database
Note: foreign pharmaceutical companies are required to appoint a Legal Agent in China, who will need to assume the same regulatory obligations and liability as the foreign MAH.

– Deepening E-pharmacy regulation
Note: the new DAL takes a more lenient approach to online sale of prescription drugs, which must satisfy separate regulations to be issued by the NMPA. High-risk pharmaceutical products are excluded.

– Supporting drug innovation by reforming the drug approval system
Note: certain rules proposed in a pervious draft, which were in favour of innovative pharmaceuticals (including data exclusivity, patent linkage, and the acceptance of foreign clinical trial data for approval) are absent in the Amended DAL.

– Product liability and severe penalties against violation