On November 1, the website of the National People's Congress of China released the full text of the “Draft Amendment to the Drug Administration Law” (hereinafter referred to as the “Draft”) and solicited opinions from all sectors of society from November 1 to December 1. In terms of overall approach, the Draft Amendment to the Drug Administration Law primarily reflects three key characteristics.

First, it implements the “four strictest” requirements, upholding stringent measures to curb chaos, eliminate malpractice, strengthen full-process oversight, and resolutely safeguard public safety. Second, it implements the Opinions on Deepening the Reform of the Review and Approval System to Encourage Innovation in Pharmaceuticals and Medical Devices, reforming and improving the drug review and approval system, encouraging pharmaceutical innovation, and strengthening oversight during and after the fact. Third, it implements the Opinions on Innovation, reforming and improving the drug review and approval system, encouraging pharmaceutical innovation, and strengthening oversight during and after the fact.

According to relevant statistics, the draft primarily contains seven key points, including: marketing authorization holders for vaccines and other products may not outsource production; drug traceability is incorporated into law; the state implements a mandatory vaccine liability insurance system; severe penalties for all links in the production and sale of counterfeit or substandard drugs; fines, license revocation, and criminal liability for kickbacks in drug procurement and sales; disciplinary actions for such misconduct by drug regulatory authorities; and prohibition of unauthorized disclosure of drug safety information. Notably, the nearly 29-year-old mandatory GMP and GSP certification system may face abolition, drawing significant attention. The draft amends Article 9 to Article 11, stating: “Engaging in pharmaceutical production activities requires compliance with the Good Manufacturing Practice for Drugs, establishing a robust production quality management system to ensure the entire drug production process consistently meets statutory requirements.” The legal representative or principal responsible person of a pharmaceutical manufacturer shall bear overall responsibility for the company's drug production activities.“ To avoid frequent legislative amendments in a short period, the draft also revises provisions related to drug approval reforms. This includes the provision that ”separate Good Manufacturing Practice (GMP) and Good Supply Practice (GSP) certifications will no longer be retained; relevant requirements will be incorporated into the licensing conditions for drug production and drug distribution, respectively."

In June this year, the National Medical Products Administration (NMPA) announced a list of 145 appointed drug GMP inspectors, which has since grown to 794. As the professional inspectorate gradually takes shape, a nationwide crackdown is imminent. Additionally, the drug regulatory model will undergo significant transformation. The draft stipulates that "any of the following acts shall be subject to heavier penalties within the range prescribed by this Law: (1) passing off narcotic drugs, psychotropic substances, toxic drugs for medical use, or radioactive drugs as other drugs, or passing off other drugs as the aforementioned drugs; (2) producing or selling counterfeit or substandard drugs primarily intended for use by pregnant women, infants, or children; (iii) producing or selling vaccines or other biological products that are counterfeit or adulterated; (iv) producing or selling counterfeit or substandard drugs resulting in personal injury; (v) producing or selling counterfeit or substandard drugs after having been punished for such offenses; (vi) refusing or evading supervision and inspection, or forging, destroying, or concealing relevant evidence materials, or improperly using sealed or impounded items."

The Draft further stipulates that “enterprises or other entities engaged in the production or sale of counterfeit drugs, or the production or sale of substandard drugs under serious circumstances, shall have their legal representatives or principal responsible persons, directly responsible supervisors, and other directly responsible personnel subject to confiscation of the income obtained by their units during the period of the illegal activity, along with a fine of not less than 30% and not more than 100% of such income. Such individuals shall be permanently barred from engaging in pharmaceutical production or business operations.”　This demonstrates that the Draft significantly strengthens penalties for illegal activities. Industry experts also note that substantially raising the upper limit of penalties ensures both punitive and deterrent effects, aiming to make enterprises anticipate high fines and thus avoid or cease illegal conduct.