SAMR launched anti-commercial bribery enforcement action in medical industry on 5 August 2019

The State Administration for Market Regulation (“SAMR”) of the People's Republic of China ("PRC") released a circular announcing a nationwide crackdown action against unfair competition behaviours on 5 August 2019. This enforcement campaign extends from August to December and focuses on commercial bribery and false promotion in the healthcare and pharma sectors.

Meanwhile, due to online whistle-blowing regarding bribery surrounding one domestic and two multinational pharma companies, local regulatory authorities have released a series of regulations about launching anti-commercial bribery investigations in the medical industry, and in particular the unreasonable academic conferences held by pharma companies. The authorities have indicated that the sponsorship of medical institutions, conferences, research and other medical activities should be strictly regulated to avoid bribery and non-compliance among pharma companies.

To read the full text of the Circular (in Chinese only), please click here.

NMPA released circular about expanding the pilot system of medical device registrants on 1 August 2019

China's National Medical Products Administration ("NMPA") released the Circular on Expanding the Pilot System of Medical Device Registrants ("Circular") on 1 August 2019, which came into effect immediately. The Circular expands the pilot areas of the current pilot regime and also clarifies certain regulatory requirements.

According to the Circular, NMPA will expand the current pilot areas, including the Free Trade Zones in Shanghai City, Guangdong Province and Tianjin City, to more provinces and cities, such as Beijing City, Tianjin City, Hebei Province, Liaoning Province, Heilongjiang Province, Shanghai City, Jiangsu Province, Zhejiang Province, Anhui Province, Fujian Province, Shandong Province, Henan Province, Hubei Province, Hunan Province, Guangdong Province, Guangxi Province, Hainan Province, Chongqing Province, Sichuan Province, Yunnan Province and Shaanxi Province.

The Circular clarifies the qualification requirements and obligations that are needed by medical device registrants and licensed manufacturers. Generally speaking, medical device registrants are liable for the lifecycle of the products, must ensure the quality of the products, supervise the manufacturer, monitor Drug Adverse Reactions and ensure the traceability of the products’ lifecycle. Qualified medical device registrants can distribute the products themselves or assign this task to a qualified distributor.

To read the full text of the Circular (in Chinese only), please click here.

State Council released reform plan on regulating high-value medical consumables on 31 July 2019

China's General Office of the State Council released the Reform Plan on Regulating High-value Medical Consumables ("Reform Plan") on 31 July 2019. The purpose of the Reform Plan is to regulate healthcare services and control the unreasonable increase in medical expenses.

In June, the National Health Commission released the Measures for the Administration of Medical Supplies at Medical Institutions Consumables (Trial Implementation), which comes into effect on 1 September 2019. These Measures establish a regulatory system for all medical consumables used by medical institutions. The Reform Plan further regulates high-value medical consumables on the basis of these Measures.

According to the Reform Plan, high-value medical consumables refer to medical consumables that can be directly used by the human body, have strict safety requirements, are often used in clinical treatments, and are relatively highly priced for a large number of people. The Reform Plan provided three general measures to control the use of and reduce the prices of high-value medical consumables. The first measure: adjust the applicable medical insurance entry premiums, payment regimes, procurement regimes and pricing mechanisms for high-value medical consumables to reduce unreasonably high prices for these consumables. The second measure: set up a strict regulatory regime for how medical institutions purchase and use high-value medical consumables to ensure qualified medical services and that any unreasonable use of high-value medical consumables are strictly controlled. The third measure: perfect the regulatory regime for the lifecycle of high-value medical consumables, including R&D, registration, distribution processes and tightening the supervision on bribery and non-compliance to build a better regulatory environment for high-value medical consumables. In addition, in order to better implement the above measures, the Reform Plan proposes improving applicable policies, contributing financial support and allocating tasks to the competent authorities to ensure the efficiency of organisational implementation.

To read the full text of the Reform Plan (in Chinese only), please click here.

New regulation for advertising medical products and special foods received comments on 6 June 2019

The State Administration for Market Regulation (“SAMR”) issued the draft Administrative Measures for Censorship of Advertisements for Drugs, Medical Devices, Health Food and Foods for Special Medical Purpose (“Draft”) for public comments on 6 June 2019. The Draft was open for public comment until 26 June 2019. This Draft was an updated version based on the comments collected for the previous version, which was issued on 13 March 2019. The purpose of the Draft was to strengthen and clarify the regulation regime of advertisements for drugs, medical devices, health food and foods for special medical purpose.

According to the Draft, besides the advertisements for the specific aforementioned products, if a company name or trademark to be advertised is identical to or contains the name of a relevant drug, medical device, health food or food for a special medical purpose, such advertisements are also subject to the regulatory regime defined by the Draft.

The Draft was an overall regulation, which unified the different regulations that apply to advertisements of different medical products. According to the Draft, the competent regulatory authority for such advertisements was the SAMR and its provincial local branches. The Draft provided the standards of reviewing such advertisements, which generally clarified what can and cannot be contained in an advertisement and the kind of products prohibited from advertising. The Draft also set up an online unified review and approval process for the advertisements of different products and also established a publication regime, which published the advertisements approved for public viewing.

To read the full text of the Draft (in Chinese only), please click here.

NPC promulgated Law on Vaccine Management on 29 June 2019

The Standing Committee of the National People's Congress ("NPC") of the PRC promulgated the Law of the People's Republic of China on Vaccine Management (“Law”) on 29 June 2019, which will come into effect on 1 December 2019. The purpose of the Law is to tighten the supervision and management of how vaccines enter China’s market and require stricter management of their production, research and distribution. Addressing the regulatory loopholes exposed by recent scandals, the Law imposes strict requirements for vaccine administration and sets out the responsibilities of each party involved in the various stages and at any part of the chain in the product lifecycle. Vaccine marketing authorisation holders bear responsibility for the safety, efficacy and controllable quality of vaccines throughout the entire product lifecycle. They must purchase mandatory liability insurance and people who suffer from vaccination-related abnormal reactions must receive reasonable compensation.

Furthermore, the Law implements unified vaccine traceability standards and practices, establishes a national vaccine e-traceability collaboration platform, and integrates whole-course traceability information throughout vaccine production, distribution and vaccinations. Moreover, the Law imposes harsher punishments for vaccine-related criminal activities, which far exceeds the punishments for crimes related to ordinary drugs.

To read the full text of the Draft Amendment (in Chinese only), please click here.