About Dabang Pharmaceutical & Health Law Team

Our team of pharmaceutical and health law attorneys has a long-standing focus on legal services in the pharmaceutical and health sector, and is well versed in the major business models and internal operational processes of the pharmaceutical and health industry.

Our clients include major pharmaceutical companies as well as small, medium and start-up companies in the life sciences and healthcare sectors. Our practice covers the main areas of the life sciences and healthcare industries, with particular experience in intellectual property protection, technology introduction, equity investment, mergers and acquisitions, project financing, compliance review, criminal and civil cross-over, dispute resolution, etc. We are able to provide high quality legal services to meet our clients' needs.

Catalogue of this issue：

I. Latest legislation

01.   Notice on the Pilot Project of Building Close-knit Urban Medical Groups

02.  Announcement of the State Drug Administration on the Issuance of the Special Provisions on the Administration of Registration of Chinese Medicines

03.  Notice of the Office of the National Health Insurance Administration on Further Improvement of the Management of Designated Retail Pharmacies into Outpatient Coordination

04.  General Office of the Central Committee of the Communist Party of China General Office of the State Council issued the Opinions on Further Deepening the Reform and Promoting the Healthy Development of Rural Health Care System

05. Inner Mongolia Autonomous Region Drug Administration on public consultation "Inner Mongolia Autonomous Region Drug Administration Administrative Punishment Discretionary Application Rules (draft for comment)" comments

II. Latest Cases

01. Shanghai Miao Shi Hui Biotechnology Co., Ltd. produced and operated cosmetics that did not meet the standards

02. Yunnan Panlong Yunhai Pharmaceutical Co., Ltd. and four other pharmaceutical companies failed to comply with the Code of Good Manufacturing Practice and produced and sold substandard drugs

03. The case of administrative punishment of three pharmaceutical companies including Sichuan Min Sheng Pharmaceutical Co.

04. The case of non-compliance with the content of the instruction manual of Shandong Benoy Pharmaceutical Biotechnology Co.

I. Latest legislation

1. Notice on the Pilot Project of Building Close-knit Urban Medical Groups

Document number:  State Health Medical Administration Letter [2023] No. 27

Issuing authority:   National Health and Health Commission National Development and Reform Commission Ministry of Finance Ministry of Human Resources and Social Security National Bureau of Chinese Medicine National Bureau of Disease Control and Prevention

Date of issue: 9 February 2023

In order to implement the requirements of the General Office of the State Council on the Guidance on Promoting the Construction of the Graded Treatment System (Guo Ban Fa [2015] No. 70), the Guidance on Promoting the Construction and Development of Medical Unions (Guo Ban Fa [2017] No. 32) and the Opinions of the General Office of the State Council on Promoting the High-Quality Development of Public Hospitals (Guo Ban Fa [2021] No. 18), and other documents In accordance with the arrangements for the key tasks of deepening the reform of the medical and health system, the National Health and Wellness Commission, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Human Resources and Social Security, the National Bureau of Chinese Medicine and the National Bureau of Disease Control and Prevention have decided to jointly carry out a pilot scheme for the construction of closely-knitted urban medical groups across the country and issued the "Pilot Scheme for the Construction of Closely-Knitted Urban Medical Groups" (hereinafter referred to as the "Scheme").

The Programme proposes that the pilot cities complete the grid layout of compact urban medical groups in the first half of 2023. By 2025, the pilot cities close urban medical group management system more scientific, more perfect operating mechanism, more optimized service model, more matching of medical resources supply and demand, more reasonable pattern of access to medical care, etc., the pilot work to form a replicable and replicable useful experience. To this end, the Programme establishes four tasks such as building a new system of urban grid-based medical services with the construction of compact urban medical groups as a carrier, and forming a new model for the construction of compact urban medical groups based on integrated management. Among them, the Programme requires that the pilot cities, based on factors such as geo-relations and population distribution, plan grids covering all resident populations within their jurisdictions, with the number of grids planned for each city being no less than two in principle, and the layout and construction of one compact urban medical group per grid.

(Source: National Health and Wellness Commission of the People's Republic of China

http://www.nhc.gov.cn)

2. Announcement of the State Drug Administration on the Publication of the Special Provisions on the Administration of Registration of Chinese Medicines

Document number: 2023 No. 20

Issuing authority: National Drug Administration

Date of issue: 10 February 2023

In order to fully implement the Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Inheritance and Innovative Development of Chinese Medicine and to organically dovetail with the newly revised Drug Administration Law and Measures for the Administration of Drug Registration, it has been decided to revise the Supplementary Provisions and amend the name of the Supplementary Provisions to Special Provisions.

The Special Provisions are based on the implementation of the Supplementary Provisions, fully absorbing the mature experience of the reform of the drug review and approval system, combining the practical exploration of the transformation of the results of epidemic prevention and control of Chinese medicine, and drawing on the results of scientific research on drug regulation at home and abroad, and constructing the registration management system of Chinese medicine in an all-round and systematic manner.

Based on the role and characteristics of TCM in clinical practice, the Special Provisions clarify that the evaluation of the efficacy of TCM should be combined with the clinical treatment characteristics of TCM, and determine efficacy indicators that are compatible with the clinical positioning of TCM and reflect its characteristics and advantages; explore the clinical value of TCM, and list eight situations that can be used as the evaluation of the efficacy of TCM (on the healing or delayed development of disease, improvement of the condition or symptoms, the patient's This enriches the clinical value-oriented and diversified methods for evaluating the clinical efficacy of TCM, promotes the establishment of a unique evaluation method and system for TCM, and expands the ideas for the development of new TCM drugs.

(Source: State Drug Administration

https://www.nmpa.gov.cn/)

3. Notice from the Office of the National Health Insurance Administration on Further Improving the Integration of Designated Retail Pharmacies into the Management of Outpatient Care

Document No.: MediShield Office [2023] No. 4

Issuing authority: National Health Insurance Agency

Date of issue: 15 February 2023

The Office of the National Health Insurance Administration issued the Notice on Further Improving the Integration of Designated Retail Pharmacies into Outpatient Coordination Management (hereinafter referred to as the "Notice").

The Notice specifies that medical insurance departments at all levels should take effective measures to encourage eligible designated retail pharmacies to voluntarily apply for the opening of outpatient co-ordination services. The Notice states that designated retail pharmacies applying for outpatient co-ordination services should meet the relevant requirements and be able to carry out direct outpatient co-ordination network settlement. The medical insurance departments in the integrated regions should optimise the application requirements and improve the service process, and provide outpatient co-ordination services to eligible designated retail pharmacies in a timely manner. The Notice improves the policy on payment for outpatient co-ordination at designated retail pharmacies, clarifying that expenses incurred by participants who purchase medicines from the medical insurance catalogue at designated retail pharmacies with prescriptions from designated medical institutions can be paid by the co-ordination fund in accordance with the regulations. The starting payment standard, payment ratio and maximum payment limit for outpatient co-ordination at designated retail pharmacies can be implemented in the same way as the medical insurance treatment policy for designated primary medical institutions in the co-ordinated area.

(Source: National Bureau of Medical Security

http://www.nhsa.gov.cn)

4. General Office of the Central Committee of the Communist Party of China General Office of the State Council issued the Opinions on Further Deepening the Reform and Promoting the Healthy Development of Rural Medical and Health Care System

Issuing Authority: Central People's Government of the People's Republic of China

Date of Issuance: 23 February 2023

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council have issued the Opinions on Further Deepening the Reform and Promoting the Healthy Development of the Rural Medical and Health Care System (hereinafter referred to as the Opinions).

The Opinions propose that by 2025, the reform and development of the rural medical and health care system will have made significant progress. The functional layout of rural medical and health institutions will be more balanced and reasonable, the infrastructure conditions will be significantly improved, intelligent and digital applications will be gradually popularised, the advantages of Chinese medicine will be further brought into play, the ability to prevent and treat diseases and health management will be significantly enhanced, and the ability to deal with major epidemics and public health emergencies in rural areas will be continuously strengthened, etc. Accordingly, the Opinions will clearly strengthen the co-ordination and layout optimization of medical and health resources within the county, develop and strengthen the rural medical and health personnel team, and reform and improve the operation mechanism of the rural medical and health system, among other tasks. Among other things, the Opinions call for strengthening and expanding the service functions of the medical and health system in the county. Support the construction of county-level hospital facilities and service capacity, and strive to have at least one county-level hospital in counties with a resident population of more than 50,000 or a large service radius reach the medical service capacity of a second-class hospital.

(Source: Central People's Government of the People's Republic of China

http://www.gov.cn/index.htm)

5. Inner Mongolia Autonomous Region Drug Administration on the public consultation "Inner Mongolia Autonomous Region Drug Administration Administrative Punishment Discretionary Application Rules (draft for comment)" comments

Issuing authority: Inner Mongolia Autonomous Region Drug Administration

Issuing date: February 16, 2023

In order to regulate the administrative punishment of drugs (including cosmetics, medical devices) discretionary behavior, to ensure that administrative penalties are legal and appropriate, to protect the legitimate rights and interests of natural persons, legal persons and other organizations, Inner Mongolia Autonomous Region Drug Administration revised the "Inner Mongolia Autonomous Region Drug Administration Administrative Punishment Discretionary Benchmark (for trial implementation)", formed the "Inner Mongolia Autonomous Region Drug Administration Administrative Punishment Discretionary Application Rules" (draft for comments) .

The draft for comments mainly provides for: (a) the rules for the application of administrative penalty discretion and the principles for the application of administrative penalty discretionary benchmarks. (2) The concepts of no administrative penalty, mitigated administrative penalty, light administrative penalty, heavy administrative penalty and general administrative penalty, as well as the discretionary power of administrative penalty, while refining the specific circumstances of application. (3) Adding circumstances such as "no administrative penalty shall be imposed in accordance with the law", "no further administrative penalty shall be imposed" and "no administrative penalty may be imposed". (4) The rules for determining administrative penalties are increased to include no administrative penalty, reduced administrative penalty, light administrative penalty, heavy administrative penalty and general administrative penalty. (v) The principle of discretionary power of a party with multiple discretionary factors. (vi) Rules for the application of the law where a party violates more than one legal norm for the same offence, or where the same party has more than two offences. (vii) The integration of the discretionary standards with the general discretionary benchmarks to form these discretionary rules. (viii) The case agency shall collect the obligation of evidence that may affect the discretion of administrative punishment. (ix) Correction mechanism for improper discretion of administrative punishment. (J) increase the first violation, timely correction and other professional terms meaning.

(Source: Inner Mongolia Autonomous Region Drug Administration

http://mpa.nmg.gov.cn)

II.  Latest Cases

1. Shanghai Miao Shi Hui Biotechnology Co., Ltd. produced and operated cosmetics that did not meet the standards

On 2 February 2023, the Shanghai Drug Administration issued a penalty decision to Shanghai Miao Shi Hui Biotechnology Co.

The penalty decision shows that on July 12, 2022, the Huai'an Food and Drug Inspection Institute took samples of Miao Shihui He Shou Wu Shampoo (batch number: 2021111301, net content: 400ml) and Miao Shihui Rice Bran Shampoo (batch number: 2021022709, net content: 400ml), which were filed by the party concerned. After inspection by Huai'an Food and Drug Inspection Institute and re-inspection by Shanghai Food and Drug Inspection Institute, the above two batches of cosmetics did not comply with the provisions of the "Technical Specification for Cosmetic Safety" (2015 edition) (inspection report number: HA2022HCG0163, HA2022HCG0164, HZ202200368, HZ202200369). Ltd. commissioned the production of Miao Shihui He Shou Wu Shampoo (Lot No.: 2021111301, Net Content: 400ml), Miao Shihui Rice Bran Shampoo (Lot No.: 2021022709, Net Content: 400ml) by the preliminary inspection and re-inspection of methylchloroisothiazolinone and methylisothiazolinone mixed with magnesium chloride and magnesium nitrate (methylchloroisothiazolinone: methylisothiazolinone and magnesium nitrate). Methylchloroisothiazolinone: Methylisothiazolinone is 3:1) were not in compliance with the provisions of the Technical Specification for Cosmetic Safety (2015 Edition).

The Shanghai Drug Administration decided to impose the following administrative penalties on Shanghai Miao Sihui Biotechnology Co.

1. confiscate the illegal proceeds: RMB 588 yuan.

2. Confiscation of illegally produced cosmetics: 6 bottles of Miao Sihui Rice Bran Shampoo (batch number: 2021022709, net content: 400ml), 25 bottles of Miao Sihui He Shou Wu Shampoo (batch number: 2021111301, net content: 400ml);

3. Fine: RMB 23,000 yuan.

2. Yunnan Panlong Yunhai Pharmaceutical Co., Ltd. and four other pharmaceutical companies failed to comply with the "Good Manufacturing Practice" and produced and sold substandard drugs

According to Part 3-6 of the 2023 Public Notice of Administrative Penalty Information Data published by the Yunnan Provincial Administration of Market Supervision, a number of pharmaceutical companies in Yunnan Province were subject to administrative penalties for producing or selling substandard drugs or failing to comply with the Code of Practice for the Production Quality Management of Medicines.

Among them, according to the penalty decision letter No. A12 of (Yun) Drug Supervision and Drug Penalty [2022], Yunnan Panlong Yunhai Pharmaceutical Co., Ltd. was fined RMB 1.6 million for failing to comply with the Code of Good Manufacturing Practice in the production process, in accordance with Article 126 of the Drug Administration Law of the People's Republic of China.

According to the Penalty Decision No. A3 of (Yun) Drug Supervision and Drug Penalty [2023], Sanling (Batch No.: 20211012) produced by Yunnan Dongrong Dianxi Traditional Chinese Medicine Material Logistics Co. Article 117, paragraph 1, of the Drug Administration Law of the People's Republic of China, the following penalties were imposed: 1. 173kg of the inferior drug Sanling (batch No. 20211012) was confiscated, 2. 123.33 yuan of illegal income was confiscated and a fine of 100,000.00 yuan was imposed. Total forfeited amount: 100123.33 Yuan.

According to the Penalty Decision No. A4 of (Yun) Pharmaceutical Supervision and Punishment [2023], the Panax pseudoginseng (Panax notoginseng powder) (batch No. 20210602) produced by Yunnan Jinsanqi Pharmaceutical Co. 1. confiscate 3513 boxes of substandard Panax pseudoginseng (Panax notoginseng powder). 2. confiscate the illegal income of RMB 252.00 and impose a fine of RMB 100,000.00. Total forfeited amount: RMB 100,252.00.

According to the Penalty Decision No. [2023] A7 of (Yun) Drug Supervision and Drug Penalty, the Epimedium (roasted Epimedium) produced and sold by Kunming Lanhai Chinese Herbs and Pieces Co., Ltd. was tested [content determination] and did not comply with the regulations; in accordance with Article 32 of the Administrative Punishment Law of the People's Republic of China and Article 117 of the Drug Administration Law of the People's Republic of China, the following penalties were imposed；1. confiscation of the illegal proceeds of RMB 8694.00  ，2. a fine of RMB 200,000.00.

3. Administrative penalties for three pharmaceutical companies, including Sichuan Minsheng Pharmaceutical Co.

From 27 to 28 February 2023, Sichuan Provincial Drug Administration announced three cases of punishment of its pharmaceutical enterprises.

Among them, according to Sichuan Drug Administration Punishment Decision [2022] No. 1039 punishment decision, Sichuan Min Sheng Pharmaceutical Co. "According to Article 117 of the Drug Administration Law and Article 75 of the Regulations for the Implementation of the Drug Administration Law, the following penalties were imposed: 1. confiscation of 3,337 boxes of the inferior drug Panax notoginseng Tablets (batch numbers: 210101 and 210401); 2. confiscation of the illegal proceeds of 3,580.3 Yuan (capital: 3,580.3 yuan).

According to the punishment decision of Sichuan Drug Administration Punishment Decision [2022] No. 1044, Sichuan Yujin Pharmaceutical Co., Ltd. provided qualification documents, bills, seals and other facilities to He Qian for the sale of RMB3075,147.01 of medicines from October 2019 to November 2022. The parties collected a total of RMB 26,995 in "distribution fees" at a rate of 1% of the total amount of drugs sold, and earned RMB 26,995 in illegal income; in accordance with Article 36 of the Measures for the Administration of Drug Distribution and Article 122 of the Drug Administration Law of the People's Republic of China, the following penalties were imposed: 1. confiscation of illegal income of RMB 26,995; 2. A fine of 100,000 yuan at one time of the illegal income of 26,995 yuan (less than 100,000 yuan calculated at 100,000 yuan). The total amount forfeited above was RMB 126,995.

According to the punishment decision of Sichuan Drug Administration [2023] No. 2003, Sichuan One Hundred Wisdom Pharmaceutical Logistics Co., Ltd. had the problem of providing inaccurate materials for the application of changing the person in charge of enterprise quality. A person in charge of quality who was not suitable for the position was employed. The provisions of Article 52 of the Drug Administration Law of the People's Republic of China (amended in 2019) and Article 20 of the Code of Practice for Quality Management of Pharmaceutical Business were violated. An administrative penalty of a fine of RMB100,000 was imposed in accordance with Article 123 of the Drug Administration Law of the People's Republic of China (2019 Revision) and Paragraph 1 of Article 28 and Article 32 of the Administrative Punishment Law of the People's Republic of China (2021 Revision).

4. Non-compliance with the content of the manual of Shandong Benro Pharmaceutical Biotechnology Co.

On February 22, 2023, Shandong Province Drug Administration website public administrative punishment information [Lu Drug Administration Punishment [2023] X301], involving Shandong Benuo Pharmaceutical Biotechnology Co.

The penalty decision shows that: Shandong Benuo Pharmaceutical Biotechnology Co., Ltd. produced from April to October 2022 methanamine bioactive dressing instructions, label content and the relevant registered content is inconsistent, its behavior violates the supervision and management of medical devices Regulations (amended in December 2020) Article 39, paragraph 1, according to the supervision and management of medical devices Regulations, Article 88 The first paragraph (2) of the provisions. Therefore Shandong Province Drug Administration based on the "supervision and management of medical devices regulations" Article 88, paragraph 1 (2) of the provisions of the administrative penalty of 23,000 yuan.