2023年6月27日发(作者：)

REGULATORYOVERVIEWREGULATORYFRAMEWORKOurproductsaresubjecttoregulatorycontrolsaresubjecttoregulationandoversightbydifferentlevelsofthefoodanddrugadministrationinthePRC,inparticular,ofthePeople’sRepublicofChinaontheAdministrationofPharmaceuticals《(中華人民共和國藥品管理法》),asamendedon28February2001,togetherwithitsimplementationregulations,providesthelegalframeworkfortheadministrationoftheproductionandsaleofpharmaceuticalproductsinthePRCandcoversthemanufacturing,distributing,packaging,lsosubjecttootherPRClawsandregulationsthatregulatethemanufacturing,distributionofpharmaceuticalproductsandmedicaldevices,palAdministrativeAuthoritiesAsthecompetentauthorityofthepharmaceuticalandhealthcareindustries,theSFDAisresponsibleforadministrativesupervisionandtechnicalsupervisionovertheresearch,production,circulationandusageofdrugs,aldrugadministrativeauthoritiesatthelevelofprovinces,autonomousregionsandmunicipalitiesdirectlyunderthePRCcentralgovernmentareresponsibleforsupervisionandusesprimarilyonpublichealthoperformsavarietyofregulatoryrolesinrelationtodrugadministration,including,withoutlimitation,carryingouthealthcaresystemreform,formulatingandimplementingtheNationalEssentialDrugsSystem,formulatingtheNationalDrugCodeandtheNationalListofEssentialDrugs,proposingpricingpoliciesforNationalEssentialDrugs,ile,istryofCommerceofPRCisponsiblefor:.formulatingplans,policiesandstandardsconcerningthedevelopmentofthepharmaceuticaldistributionindustry;enhancingthestructurereadjustmentofthepharmaceuticaldistributionindustry;guidingthereformofthepharmaceuticaldistributionindustry;TheNDRCisresponsibleforthemacro-guidanceandmanagementofthehealthcareindustry’sdevelopmentplanning,technologicalupgrading,approvalofinvestmentprogramsandtheeconomicoperationstatusofthemedicalenterprises,thesupervisionandmanagementoverthepriceofmedicinesandformulatingthenationalunifiedretailpriceforcertaindrugsfallingundertheNationalMedicalInsuranceDrugsCatalogandfordrugstheproductionanddistributionofwhicharemonopolized.–121–REGULATORYOVERVIEWInaccordancewiththestatelaws,rules,regulationsandpoliciesrelatingtohealthanddrugsandinlightofthecharacteristicsofthetraditionalChinesemedicineindustry,theStateAdministrationofTraditionalChineseMedicineisresponsiblefortheguidanceandimplementationoffundamentalworkssuchasguidelines,policies,developmentstrategies,qCTURINGOFPHARMACEUTICALPRODUCTSAmanufacturerofpharmaceuticalproductsmustobtancludeapharmaceuticalmanufacturingpermit,aGMPcertification(s)andamedicineapprovaldocument(s).PharmaceuticalManufacturingPermitAmanufacturerofpharmaceuticalproductsmustobtainapharmaceuticalmanufacturingpermitandabusinesslicensefromntofsuchpermitissubjecttoaninspectionofthemanufacturingfacilities,andafindingthattheirsanitarycondition,qualityassurancesystems,ingtotheRegulationsofImplementationoftheLawofthePeople’sRepublicofChinaontheAdministrationofPharmaceuticals《(中華人民共和國藥品管理法實施條例》),whichbecameeffectiveon15September2002,andtheMeasuresontheSupervisionandAdministrationoftheManufactureofPharmaceuticals《(藥品生產監督管理辦法》),whichbecameeffectiveon5August2004,apharmaceuticalmanufacturingpermitisvalidforfiveyearsandmayberenewedatleastsixmonthsprnufacturingPracticesAmanufacturerofpharmaceuticalproductsandpharmaceuticalmaterialsmustobtainprisesasetofdetailedguidtificationcriteriaincludethoserelatedtoinstitutionandstaffqualifications,productionpremisesandfacilities,equipment,hygieneconditions,productionmanagement,qualitycontrols,productoperation,maintenanceofsalesrecordatedbytheWHO,theguidelinesembodiedinGMPweredesignedtoprotectconsumceptofGMPwasintroducedinthePRCin1982andwaspublishedintheGuidelinesontheImplementationofGMPStandards《(藥品生產質量管理規範實施指南》)1988,MOHpromulgatedthefirstversionofGMPstandards,whichwassubsequentlyamendedin1992,17January2011,SFDApublishedthecurrentversionofGMPstandards(2010revisededition),alandRegistrationofPharmaceuticalProducts),InaccordancewiththeMeasuresfortheAdministrationofDrugRegistration《(藥品註冊管理辦法》whichbecameeffectiveon1October2007,amedicinemuistrationandapprovalprocessrequiresthemanufacturertosubmittotheSFDAaregistrationapplicationcontainingdetailedinformationconcerningtheefficacy–122–REGULATORYOVERVIEWandqualityofthemedicineandthemanufacturingprocessandtheproductionfocessgenerallytakesatleastafewmonthsandcouldbelonger,dependingonthenatureofthemedicineunderreview,inSFDAregistrationandapprovalnecessaryforcommencingproduction,themanufacturerisalsorequiredtoconductpre-clinicaltrials,applytotheSFDAforpermissiontoconductclinicaltrials,and,aftertheclinicaltrialsarecompleted,ary2009,theSFDAissuedtheProvisionsonSpecialApprovalfortheRegistrationofNewDrugs《(新藥註冊特殊審批管理規定》)thicineisapprovedbytheSFDAasanewdrug,theSFDAwillissueanewdrugcertificatetothethemonitoringperiod,theSFDAwillmonitorthesafetyofthenewdrug,andwillnotacceptnewdrugcertificateregistrationsforanidenticalmedicinebyanotherpharmaceuticalcompany,norapprovetheproducuingSFDARegulationAmanufacturerofpharmaceuticalproductsissubjecttoperiodicinspectionandsafetymonitoringbytheSFDAtodeterminethemanufacturer’Ahasavarietyofenforcementactionsavailabletoenforceitsregulationsandrules,suchasfinesandinjunctions,recallsorseizureofproducts,impositionofoperatingrestrictions,partialsuspensionorcompleteshutdownofproduction,andreferrBUTIONOFPHARMACEUTICALPRODUCTSPharmaceuticalOperationPermitTheestablishmentofawholesalepharmaceuticaldistributioncompanyrequirestheapprovalofthefoodanddrugadministrationofthepeople’sgovernmentoftheprovince,autproval,ablishmentofaretailpharmacyrequirestheappproval,esepermitsarereceived,thewholesaleandretailpharmaceuticalcompanyshallntofsuchpermitissubjecttoaninspectionoftheoperator’sfacilities,warehouse,hygienicenvironment,qualitycontrolsystems,personnel(includingofwhetherpharmacistsandotherprofessionalshavetherelevantqualifications)heMeasuresfortheAdministrationofPharmaceuticalOperationPermit《(藥品經營許可證管理辦法》),whichbecameeffectiveon1April2004,erationpermitholdermustapplyforanextensionofthepermitsixmonthspriortoitsexpiration,andextensionisgrantedonlyafterare-tion,apharmaceuticaloperatormustobtainlicensefromtherelevantadministrationforindustryandcommercepriortocommencingitsbusiness.–123–REGULATORYOVERVIEWGoodSupplyPracticesEachretailorwholesaleoperatorofpharmaceuticalproductsisrequiredtoobtainaGSPcertificatefrndards,whichcompriseasetofqualityguidelinesforoperationsrelatedtopharmaceuticalproducts,regulatepharmaceuticalwholesaleandrerentapplicableGSPstandardsrequirepharmaceuticaloperatorstoimplementstrictcontrolsontheoperationofpharmaceuticalproducts,includingstandardsregardingstaffqualifications,premises,warehouses,inspectionequipmentandfacilities,heAdministrativeMeasuresforCertificationofGoodSupplyPractices《(藥品經營質量管理規範認證管理辦法》)issuedon24April2003bySFDA,theGSPcertificateisvalidforfiveyearsandmaybeextendedthreemonths’isionandManagementofDrugDistributionTostrengthendrugsupervisionandmanagement,andmaintainorderlycirculationandqualities,theSFDAissuedtheMethodofSupervisionandManagementofDrugDistribution《(藥品流通監督管理辦法》)on31January2007,edprovisionsareimposedonavarietyofmatterssuchasthepurchase,sale,transportationandstorageofmedicinesbypharmaceuticalproductionandoperationenterprisesaswelcebetweenretailpharmaciesThePRCcentralgovernr,forreasonablearrangementofpharmacyresources,thelocalgovernmentshavepublishedsomeloclowingareexagUnderarticle5oftheRegulationRegardingOpeningRetailPharmaciesinBeijing《(北京市開辦藥品零售企業暫行規定》),theopeningofretailpharmaciesshouldbeinaccordancewiththeprincipleof‘‘reasonablelayoutandconveniencetothemasses’’.Thenewlyopenedretailpharmaciesshouldkeepatravelingdistanceabove350meterswithexistingpharmacies:(1)Thereisnodistancerestrictiononthedirectlyoperatedretailpharmacisneitherdistancerestrictionon,whileopenedinthesameshoppingmall,thedirectlyoperatedretailpharmacieswhicharenotlegalpersons,northeretailenterpriseswhichfocusontypeBnon-prescriptiondrugs.(2)ShanghaiUnderarticle3ofShanghai’sGuidanceForAdministrativeLicensingofDrugRetailEnterprises2011(2011版)),theopeningofretailpharmaciesshouldbeinEdition《(上海市藥品零售企業行政許可指南》accordancewiththeprincipleof‘‘reasonablelayoutandconveniencetothemasses’’.Anditshouldalsomeetstherequirementsforcommercialnetworklayoutanddevelopmentplanintheareawherethe–124–preventsnewretailpharmaciesgatheringtogetherinthecitywhichitspopulationisconcentrated,butencouragethenewretailpharmaciesopeninnewlyestablishedresidentialareas,lyopened(includerelocation)retailpharmaciesshouldkeepadistanceofmorethan300meters(include300meters)ulationcannotbechangedeventheretaillyopenedretailpharmacies,iftherearemorethan7,000(include7,000)residents(includinghouseholdpopulationandfloatingpopulation)inthisarea,nUnderarticle6ofTianjin’sRegulationOfImplementationOfBusinessLicenseForDrugRetailEnterprises《(天津市藥品零售企業藥品經營許可證管理實施細則》),theopeningofretailpharmaciesshouldbeinaccordancewiththeprincipleof‘‘reasonablelayoutandconveniencetothemasses’’.ThenewlyopenedretailpharmacOFAPISANDINTERMEDIATEPRODUCTSTOOVERSEASMARKETSTheAPIsandintermediateproductsexportedtooverseasmarketsmustberegisteredwithandapprovedbyboththeSFDAandthelrtoregisterwiththelocalfoodanddrugadministrativeauthoritiesoftheimportingcountries,(i)theAPIsandtheintermediateproductsaregenerallyrequiredtomeetthequalitystandardsofthosecountries,suchasthosesetoutintheUnitedStatesPharmacopeiaandtheEuropeanPharmacopoeia;(ii)theproductionfacilitiesarerequiredtopasstheGMPon-siteinspection;and(iii)thesamplesextractetiontotheabove,theexportedAPIsandintermediateproductsarealsosuelopedeconomiesthatimportourAPIs,EuropeanUnion,haveimplementedtheWTOagreementonpharmaceuticalproductsin1993,whicheliminatedimporttariffsforfinishedproducts,activeingredientsandsomechemicalintermediates,r,certainmajordevelopingeconomies,suchasChina,India,Russia,andtheASEANcountrilytheimportersofourAPIproductsbearalltaxesanddDrugAdministration,whiletheproductspecificationandstandardsarebasedonthecustomers’tsthatareexportedtotheEurCIALFRANCHISEREGULATIONSThePRCStateCouncilpromulgatedtheRegulationsontheAdministrationofCommercialFranchises《(商業特許經營管理條例》)(the‘‘FranchiseRegulations’’)nchiseRegulations,whichbecameeffectiveon1May2007,areintendedtofurtherlibetiontotheFranchiseRegulations,theMinistryofCommercehaspromulgatedtwoimplementingregulations,namely,theAdministrative)(the‘‘ArchivalMeasuresforArchivalFilingofCommercialFranchises《(商業特許經營備案管理辦法》FilingMeasures’’),whichwasamendedon12December2011,andtheAdministrativeMeasureson–125–REGULATORYOVERVIEWInformationDisclosureRequirementsforCommercialFranchises《(商業特許經營信息披露管理辦法》)(the‘‘DisclosureMeasures’’)nchiseRegulations,ArchivalFilingMeasuresandDisclosureMeasuresformthebasiclegalframeworkfortheregulationofPRCfranchiseoperations,andaddresstherequirements,fees,qualifications,administrativereportingandcomplianceprocedures,CTURINGANDDISTRIBUTIONOFMEDICALDEVICESMedicalDevicesManufacturingPermitInaccordancewiththeRegulationsontheSupervisionandAdministrationofMedicalDevices《(醫療器械監督管理條例》),whichbecameeffectiveon1April2000,manufacturingofclassIIand/orclassIIImedicaldevicesissubjecttoinspectionandapprovalbythelocaldrugadministrativeauthorityoftheprovinces,autonomousregionsandmunicipalitiesandthemanufacturerofsuchmedicaldevicesisrequiredtoobtaintheMedicalDeviceManufacturingEnterpriseLicense《(醫療器械生產企業許可證》).ThelistofeachclassofmedicaldevicesissetforthintheMedicalDeviceProductCatalog《(醫療器械分類目錄》),mofthevalirationofMedicalDevicesManufacturingInaccordancewiththeRegulationsontheSupervisionandAdministrationofMedicalDevices《(醫療器械監督管理條例》),aproduchisproductregistrationsystem,classImedicaldevicesshallbeinspected,approvedandissuedaregistrationcertificatebythelocaldrugadministrativeauthority,classIImedicaldevicesshallbeinspected,approvedandissuedregistrationcertificatesbythedrugregulatoryagencyofprovinces,autonomousregionsandmunicipalities,andclassIIImedicaldevicesshallbeinspected,approvedandissuedregistrationcemofvalidityfortheregistrationcertificateofmedicaldevicesisfouryears,istrationcertificateshallbeinvalidatelDeviceOperationPermitInaccordancewiththeRegulationsontheSupervisionandAdministrationofMedicalDevices《(醫療器械監督管理條例》),whichbecameeffectiveon1April2000,andtheMeasuresfortheAdministrationofPermitsforMedicalDevicesOperationEnterprises《(醫療器械經營企業許可證管理辦法》),whichbecameeffectiveon9August2004,anenterpriseengagedinwholesaleorretailofmedicaldevicesmustobtainanoperationpermitfromtheprovinciallevelfoodanddrugadministrationbeptionfromthisrequirementexistsinthecaseofadistributorofasmallnumberofClassIImedicaldeviceswherethedistributwanoperationpermit,adistributorneedstosubmitanapplicationtotheprovinciallevelfoodanddrugadministration,alongwithrequiredinformationsixmonthsbeforetheexpirationofthepermit.–126–REGULATORYOVERVIEWInDecember2008,theSFDAandMOHjointlyreleasedtheMeasuresonMonitoringandRe-EvaluationoftheAdverseEventsInvolvingMedicalDevices(Trial)《(醫療器械不良事件監測和再評價管理辦法(試行)》),whichspecifytheprocessandtimelineforreporting,moRATIONOFNEWPHARMACEUTICALPRODUCTSAccordingtotheMeasuresontheAdministrationofPharmaceuticalProductsRegistration《(藥品註冊管理辦法》),whichwaspromulgatedbytheSFDAin2007,newpharmaceuticalproceuticalproductstakingdifferentdosageformsorrouteofadministrationorhavingcurativeefpharmaceuticalproductsmustundergofourphasesbeforethelaunching:pre-clinicalresearch,applicationforclinicaltrials,ecompletionofpre-clinicalresearch,pharmaceuticalproductmanufacturersarerequiredtoobtainapprovalfromtheSFDApationmaterials,includingrelevantpre-clinicalresearchinformation,mvinclogicalproducts,Awillconsolidatethereviewopinions,on-siteinspectionreport,druginspectionreport(ifany)andpre-clinicalresearchinformationfromtheprovincialauthorities,andthenorganizeanexpertcommitteemadeupofpharmaceuticalexpertsandotherspecialiststoconducttechnicalassessmentsofthenewpharmaceuticalproceuticalmaaltrialscomprisefourphases:phaseI(preliminarypharmacologyandhumansafetytrials),phaseII(preliminaryassessmentonefficacy),phaseIII(confirmationofefficacy)andphaseIV(researchonapplicationsafterlaunchingofnewpharmaceuticalproducts).Thenumberoftestedcasesofclinicaltrialsshallaccordwiththeaimofeachphaseofclinicaltrialsandrelevantstatisticalrequirements,andshallnotbelessthantheminimumnumberofclinicaltrialcasessetforthintheaseofrarediseases,specialdiseasesandotherexceptionalcircumstances,applicationforreducingthenumberofclinicaltrialcaecompletionofclinicaltrials,theapplicantmusationmaterials,includingrelevantclinicaltrialinformationandrawmaterialsamples,mustbesubmittedtotheprvincialSFDAwillonsecutiveproductionbatchesofdrugsampleswillbecollectedfromtheapplicant’heirinvestigationandassessmentoftheapplication,theprovincialdrugadministrativeauthoritiesandthedruginspectionbureauwillreporttotheassessmentcenteroftheSFDA,ewpharmaceuticalproductpassesthetechnicalassessment,theassessmentcenteroftheSFDAwouldnotifytheapplicanttoapplyforon-sitetificationcenteroftheSFDAwillconductanon-siteinspection,within30daysafterreceiptoftheapplication,ontheprocessofbulkproductionofsampleswillbedeliveredtoanotherdruginspectionbureautore-examinethestandardofthepharmaceuticalproduct,andtheresultswillbe–127–essmentcenterwillthenconsolidatetheresultsfromtheon-siteAwillthenconsideoved,theapplicantwillufacAmaystipulateamonitoringperiodofuptofiveyearsinrespectofanynewpharmaceuticalproductapprovedforproductiontAwillnotapprovetheproduction,changeandimportofsuchnewpicationsfortheregistrationofsimilarpharmaceuticalproductsbyotherapplicantsshallbeacceptedafterthecationsfortheregistrationofpharmaceuticalproductsofsimilarproductsbyotherapplicantsthathavebeenacceexpirationofthemonitoringperiodofsuchnewpharmaceuticalproducts,applicantsmayfileanapplicationinrespectoftheirgenericpharingtotheMeasuresontheAdministrationofPharmaceuticalProductsRegistration(藥品註冊管理辦法),theapprovalnumberformedicineapprovedbySFDA,thecertificateofimportedmed7January2009,theSFDApromulgatedtheAdministrativeMeasuresontheSpecialExaminationandApprovalofNewPharmaceuticalProductsRegistration《(新藥註冊特殊審批管理規定》),whichprovidedthatcertaintypesofnewpharmaceuticalproductsmayapplytogothroughthespecialexaminationandapprovalprocesswhensubmithespecialexaminationandapprovalprocess,thenewpharmaceuticalproductswhichfulfiltheprescribedcriteriawillenjoyprioritiessuchasacceleratedapprovalandadditionalsupplemEMEDICINEPROTECTIONAccordingtotheRegulationsontheProtectionofChineseMedicines《(中藥品種保護條例》),whichwaspromulgatedbytheStateCouncilon14October1992andbecameeffectivefrom1January1993,forthepurposesofimprovingthequalityandpromotingthedevelopmentoftraditionalChinesemedicines,aswellasprotectingtheirmanufacturers’legitimaterightsandinterests,protectionsaregrantedwithrespecttoavarietyofdomesticallymanufacturedtraditionalChineseentprovisionshavebeenstipulatedfortheprescriptioncomposition,IPTIONMEDICINESANDOVER-THE-COUNTERMEDICINESInordertopromotesafety,efficacyandconvenienceintheuseofpharmaceuticalproducts,theSDA,thepredecessoroftheSFDA,publishedtheTrialAdministrativeMeasuresregardingtheClassificationofPrescriptionMedicinesandOver-the-CounterMedicines《(處方藥與非處方藥分類管理辦法(試行)》)inJune1999,dministrativemeasuresdividedrugsaccordingtotheirtype,specification,therelevantdiseaseorailmentwhichtheyaredesignedtotreat,iptionmedicinesrelatetothosewhose–128–REGULATORYOVERVIEWprescription,purchasean-the-countermedicinesrelatetothosewhoseprescription,purchaseandintaAisresponsiblefortheselection,approval,publicationandrevisionoftheStateNon-PrescriptionMedicineCatalog《(國家非處方藥目錄》).Dependingonthesafetyoftherelevantdrug,over-the-countermedicinecturersofbothprescriptionandover-the-countermedicinesarerequiredtoobtainaPharmaceuticalManufersandwholesalersofprescriptionmedicinesandover-the-countermedicinesandretailoutletssellingprescriptionmedicinesandtypeAover-the-cooutletssellingtypeBover-the-countermedicinesrequireapprovalfromthetion,retailoutletssellingtypeBover-the-countermedicinesarerequiredtohaveprofessionallytrainedandsuitablyqualifoutletsarerequiredtosourcetheirdrugsfromqualifiedALLISTOFESSENTIALDRUGSOn18August2009,MOHandothereightministriesandcommissionsinthePRCissuedtheProvisionalMeasuresontheAdministrationofNationalListofEssentialDrugs《(國家基本藥物目錄管理辦法(暫行)》),ortheMeasures,andtheGuidelinesontheImplementationoftheNationalListofEssentialDrugsSystem《(關於建立國家基本藥物制度的實施意見》),ortheEssentialDrugsGuidelines,thataimtopromoteessentialmedicinessoldtoconsumersatfairpricesinthePRCandensurethatthegeneralpublicinthePRChaveameday,MOHpromulgatedtheNationalListofEssentialDrugs(CatalogfortheBasicHealthcare(2009版)),whichInstitutions)(2009Edition)《(國家基本藥物目錄(基層醫療衛生機構配備使用部分)》ealthcareinstitutionsprimarilyincludecounty-levelhospitals,county-levelChinesemedicinehospitals,ceuticalsalesfrombasichealthcareinstiONTROLSPursuanttotheOpinionoftheBureauofStatePlanningCommissionregardingReformsonPriceAdministrationofPharmaceuticalProducts《(國家計委關於改革藥品價格管理的意見》)issuedbyBureauofStatePlanningCommission,thepredecessoroftheNationalDevelopmentandReformCommission,on20July2000,andtheCircularoftheNationalDevelopmentandReformCommissiononIssueofPrice-controlledPharmaceuticalProductsCatalogofNationalDevelopmentandReformCommission《(國家發展改革委員會關於印發〈國家發展改革委定價藥品目錄〉的通知》),whichbecameeffectiveon1August2005,pricesofpharmaceuticalproduct5March2010,theNDRCissuedtheCircularoftheNationalDevelopmentandReformCommissiononadjustmentofPrice-controlledPharmaceuticalProductsCatalogofNationalDevelopmentandReformCommission《(國家發展改革委關於調整〈國家發展改革委定價藥品目錄〉等有關問題的通知》),whichhasadjuscesofcertainpharmaceuticalproductssoldinthePRC,primarilythoseincludedinthenationalandProvincialMedicalInsuranceDrugsCatalogsaresubjecttopricecontrolsmainlyintheform–129–cturersandoperatorscannotsettheactualpriceforanygivenprice-controlledproductabovecesofmedicinesthatarenotsubjecttopricecontrolsaredetefpharmaceuticalproductsbypharmaceuticalmanufacturersinthePRCtosuedtheNoticeontheGuidingRetailPriceofNationalEssentialDrugs《(國家發展改革委關於公佈國家基本藥物零售指導價格的通知》)inSeptember2009,ult,allkindsofmedicalinstitutions,retailpharmaciesandotherpharmaceuticalmanufacturersanddistributorsatalllevelsshouldnotsellthenationalcesofmedicinesthataresubjecttopricecontrolsareadminmetotime,theNDRCp5March2010,theNDRCpromulgatedtheCircularoftheNationalDevelopmentandReformCommissiononadjustmentofPrice-controlledPharmaceuticalProductsCatalogofNationalDevelopmentandReformCommission《(國家發展改革委員會關於調整〈國家發展改革委定價藥品目錄〉等有關問題的通知》),whichrevisedtheCatalogofMedicinessubjecttoNDRCPriceControlissuedin2005(國家發改委定價藥品目錄).ThelatestpricereductionsoccurredinSeptember2012whentheNDRCpromulgatedtheNoticeforAdjustmentofthePricesofMedicinesforcertainimmunomodulatingagents,oncologyandbloodsystemsmedications,settingouricesandpriceceilingsonmedicinesaredeterminedbasedonprofitmarginsthattherelevantgovernmentauthoritiesdeemreasonable,thetypeandqualityofthemedicine,averageproductioncosts,Cdirectlyregulatesthepriceofaportionofthemedicinesonthelist,anddelegatestoprovincialandregionalpricecontrolauthoritiestr,pursuanttotheNoticeRegardingFurtherImprovementoftheOrderofMarketPriceofPharmaceuticalProductsandMedicalServices《(關於進一步整頓藥品和醫療服務市場價格秩序的意見》)jointlyissuedbytheNDRC,theStateCouncilLegislativeAffairsOfficeandtheStateCouncilOfficeforRectifying,theMOH,theSFDA,theMinistryofCommerce,theMinistryofFinanceandtheMinistryofLaborandSocialSecurityon19May2006,thePRCgovernmentexercisespricecontroloverpharmaceuticalproductsincludedintheNationalMedicalInsuranceDrugsCatalogandProvincialMedicalInsuranceDrugsCatalog,andmadeanoveralladjustmentoftheirpricesbyreducingtheretailpriceofcertainoverpricedpharmaceuticalproductsandincreasedtheretailpriceofcertainunderpricedpharmaceuticalproductsindemandforclinicalusebutthathavenotbeenproduceicular,theretailpricechargedbyhospitalsatthecountylevelorabovemaynotexceed115%oftheprocurementcostoftherelevantpharmaceuticalproductsor125%9November2009,theNDRC,theMOHandtheMinistryofHumanResourcesandSocialSecurityjointlypromulgatedtheNoticeonIssuingOpinionsonReformingthePriceFormationSystemofMedicineandMedicalServices《(關於印發改革藥品和醫療服務價格形成機制的意見的通知》).AccordingtothisNotice,inadditiontodrugsincludedintheNationalMedicalInsuranceDrugs–130–REGULATORYOVERVIEWCatalog,ProvincialMedicalInsuranceDrugsCatalogandcertaindrugswhoseproductionortradingtendtocreatemonopolies,drugslistedintheNacesofotherdrugsaredeterminedbufacturerofamedicineorthedistributorofanimportedmedicinemayapplyforanincreaseinthepriceofthemedicineanditmusteitherapplytotheprovincialpricecontrolauthoritiesintheprovincewhereitisincorporated,ifthemedicineisprovinciallyregulated,ortotheNDRC,ovinciallyregulatedmedicine,incaseswhereprovincialpricecontrolauthoritiesapproveanapplication,theprovincialpricecontrolauthoritiesmustfilethenewapprovedpricewiththeNDRCtion,ifaparticularpharmaceuticalproductissignificantlysuperiortocomparableproductsintermsofeffectiveness,safety,treatmentcycleandcostsoftreatment,itsmanufactureroroperatormayapplyforanapprovalforseparatepricing,specttopharmaceuticalproductswhosepricesaredeterminedbymarketconditions,thepharmaceuticalmanufacturersareabletodeterminetheretailpriceoftheirproductsbasedontalersandretailersofsuchproductsarepermittedtodeterminetheactualretailpricetotheendcustomers,providedthatsrmaceuticalmanufacturersarerequiredtoadjusttheretailpricesfromtimetotimebasedontheiheMeasuresontheInvestigationofEx-FactoryPricesofDrugs(TrialImplementation)《藥品出廠價格調查辦法(試行)》)issuedon9November2011andtheNoticeonEnforcementofInvestigationandSurveyofEx-FactoryPricesofDrugs《(國家發展改革委辦公廳關於加強藥品出廠價格調查和監測工作的通知》)issuedon26March2012byNDRC,thegovernmentwillhavetheauthoritytoconductinvestigationontheex-factorypricesonmedirmacestigatorsarerequiredtochecktheretailpricesofthesepharmaceuticalproductsaccordingtothepricingdocemeasuresareimplemented,thegovernmentwillbeabletousetheresultsoftheiningtotheNoticeofInvestigationofEx-factoryPricesonCertainMedicinesissuedbyNDRC)on1July2010,asurveyofthe《(國家發展改革委辦公廳關於對部分藥品進行出廠價格調查的通知》wholesalepricesofapproximately900pharmaceuticalproductsandtheoperationsoftherelevantpharmaceuticalmanufacturerswillbeconductedtounderstandthepricingstructureoftheselectedpharmaceuticalproducts,whichmayleadtofurtherdownwardadjustmentsinthemaximumretailingtotheNoticeonInspectionofNationalMedicalHealthyService《(關於開展全國醫藥衛生服務價格大檢查的通知》)whichwasissuedinMarch2011,NDRCandotherrelatedauthoritieswillinspecttheratesofmedicalinstitutions,diseasecontrolandpreventioncenters,bloodstations,medicalorganizationswhichconductcentralizedprocurement,andunitsengagedinmedicalserviceasat1January2010.–131–REGULATORYOVERVIEWUndertheCircularofRegulatingthePriceofMedicalServiceandRelatedItems《(關於規範醫療服務價格管理及有關問題的通知》)issuedon4May2012,NDRC,MOHandNationalAdministrationofTraditionalChineseMedicinerevisedtheStandardofNationalPriceforMedicalService2012《(全國醫療服務價格項目規範（二零一二年版）》).ThenewlyrevisedStandardofNationalPriceforMedicalService2012comprehensivelystandardizesthepricesofmedicalservices,fixedformedicalservicespublishedinthenationalstandardarebasischargingitemmswhichneedtobepreserved,sAGEMENTONTHEENTRYOFPRIVATEINVESTMENTINTOTHEHEALTHCAREINDUSTRYUndertheGuidingOpinionsoftheStateCouncilOnEncouragingandGuidingtheHealthyDevelopmentofthePrivateInvestment《(國務院關於鼓勵和引導民間投資健康發展的若干意見》)issuedon7May2010,andtheCircularoftheStateCouncilonIssueoftheCooperationoftheDepartmentstoEncourageandGuidetheHealthyDevelopmentofthePrivateInvestment《(國務院辦公)issuedon22July2010,theStateCouncil廳關於鼓勵和引導民間投資健康發展重點工作分工的通知》requeststhegovernmentsatalllevelstopromotethehealthcarereformbyencouragingandguidingtheprivatgovernmentshouldguidetheprivateinvestmentasanimportantsupplementtotheinvestmentbythegovernment,andspeeduptheestablishmentofapublichealthcareservicesysteminwhichthegovernmentinvestmeernmentshouldsupporttheprivateinvestmenttooperatehospitals,communityhealthcareservicecenters,nursinghomes,ldalsosupportthvatemedicalinstitutionsareencouragedtoprovidepublichealthservice,teCouncilrequiresthegovernmentatalllevelstoprovideafavourableenvironmenttotheprivateinvestmentinthehealthcareindustrywithgovernmentalfinancialsupport,financialinstitutions’heOpinionsofPriorityAreasofWorkonDeepeningtheEconomicSystemReformin2012《(關於2012年深化經濟體制改革重點工作意見的通知》)approvedbyStateCouncilon18March2012,theStateCouncilrequiresthegovernmentsatalllevelstoadvancepilotreformsofpublichospitalsatthecountylevelandurbanpublichospital,andspeeduptoformanopen,RSEMENTUNDERTHENATIONALMEDICALINSURANCEPROGRAMUrbanResidentProgramPharmaceuticalproductslistedintheNationalMedicalInsuranceDrugsCatalog,ionalmedicalinsuranceprogramwasadoptedpursuanttotheDecisionoftheStateCouncilontheEstablishmentofBasicMedicalInsuranceSystemforUrbanEmployees《(國務院關於建立城鎮職工基本醫療保險制度的決定》)issuedbytheStateCouncilon14December1998,underwhichallemployersinurbancitiesarerequiredtoenrolltheiremployeesinthebasicmedicalinsuranceprogramandtheinsurancepremiumisjointlycontributedbytheemployersandemployees.–132–REGULATORYOVERVIEWParticipantsofthenationalmedicalinsuranceprogramandtheiremployersarereiceRegardingtheTentativeMeasuresfortheAdministrationoftheScopeofMedicalInsuranceCoverageforPharmaceuticalProductsforUrbanWorker(關於印發城鎮職工基本醫療保險用藥範圍管理暫行辦法的通知),jointlyissuedbyseveralauthoritiesincludingtheMinistryofLaborandSocialSecurityandtheMinistryofFinance,amongothers,on12May1999,furtherrequiresthatapharmaceuticalproductincludedintheNationalMedicalInsuranceDrugsCatalogmustbeclinicallyneeded,safe,effective,reasonablypriced,user-friendlyandavailableinthemarketandmustalsomeetthefollowingrequirements:...itissetforthinthePharmacopoeiaofthePRC;itmeetsstandardspromulgatedbytheStateDrugAdministration(thepredecessorofSFDA);ionalmedicalinsurancedrugs,industrialinjuryinsurancedrugsandmaternityinsurancedrugscatalogOn27November2009,theMinistryofHumanResourcesandSocialSecurityofthePRCpublishedtheCircuitoftheNationalMedicalInsuranceDrugs,IndustrialInjuryInsuranceDrugsandMaternityInsuranceDrugsCatalog《(國家基本醫療保險、工傷保險和生育保險藥品目錄(二零零九年版)》)torenewtheNationalMedicalInsuranceDrugsCatalog,andrequestedtheprovinces,autonomousregionsandmunicipaalogcanbedividedintothreetypes:westernmedicine,traepatientswhotakepartintheinsurancepurchasethewesternmedicine,traditionalChinesemedicinepatentprescriptionwhichareincludedintheCatalogandChineseherbalpieceswhicharenotincludedintheCatalog,theywillgetreimbursementaccordingtotherulesofnationalmedicalinsurancedrugs,industricalinsurancedrugscatalogisdividedintotwoparts,ustrigsincludedinPartAaredeterminedbythePRCgovernmentforgeneratspurchasingdrugsincludedinPartAoftheCatalgsinPartBaredeterminedbythePRCgovernmentandlocalauthoritiesattheprovinciallevelmay,basedonlocaleconomicdevelopment,medicaldemandandmedicaltreatmenthabit,thenumberofPartBdrugs,ult,thtspurchasingdrugsincludedinPartBoftheNationalMedicalInsuranceDrugsCatalogarerequiredtopayadeuntofthedeductiblediffersfromregiontoregioninthePRC.–133–REGULATORYOVERVIEWMedicalSubsidytoResidentsinRuralAreasAspartofthemedicaltreatmentandhealthcarereform,thePRCcentralgovernmenthasimplementedplansforthePRCcentralandlocalgovernmentstosharet13January2004,theStateCouncilcirculatedtheGuidingOpinionsregardingtheFurtherImprovementofCooperativeMedicalCareinNewTypeRuralAreasonaTrialBasis《(國務院辦公廳轉發衛生部等部門關於進一步做好新型農村合作醫療試點工作指導意見的通知》),whichwasformulatedbytenPRCgovernmentagenciesincludingMOH,pursuanttowhicheveryruralresidentinthemiddleandwesternregionsofthePRCparticipatinginthisnewruralcooperativemedicalcareplanonavoluntarybasisreceivesmedicalsubsidiesintheamountofRMB10.0(equivalenttoapproximatelyUS$1.5)tion,localgovernmentsinthemiddleandwesternregionsofthePRCarerequiredtosubsidizenolessthanRMB10.0perpersonperyearandthoseintheeasternregionsofthePRCareencouragedtoaimtosubsidizeuptoRMB20.0(equivalenttoapproximatelyUS$3.0)ualamountofsubsidycontributedbylocalgovernment10January2006,MOH,NDRCandfiveotherministriesandbureausjointlypromulgatedtheNoticeRegardingAccelerationofImplementationofCooperativeMedicalCareinNewTypeRuralAreasonaTrialBasis《(關於加快推進新型農村合作醫療試點工作的通知》),pursuanttowhichthePRCcentralgovernmentincreasedtheamountofsubsidyfortheruralresidentsinmiddleandwesternregionsofthePRC,tion,localgovernmesidentsBasicMedicalInsurancePursuanttotheGuidingOpinionoftheStateCouncilonDevelopingPilotProgramsofUrbanResidents),promulgatedbyBasicMedicalInsurance《(國務院關於開展城鎮居民基本醫療保險試點的指導意見》theStateCouncilon10July2007,inordertoachievetheobjectiveofestablishingamedicalsecuritysystembasicallycoveringallurbanandruralresidents,theStateCouncilhasdecidedtolaunchpilotprogramsofurbanresidentbasicmedicalinsurance,soastocovertheunemployedurbanresidentswhohnionprovidesthaturbanresidentbasicmedicalinsurancepremiumsshaanresidentbasicmedicalinsurancefundwillfirstbeusedforpaymentoftheinpatientfeeandCredibilityRatingInordertoincreasetheawarenessofpharmaceuticalproductmanufacturersandresearchinstitutionsaboutthesafetyandcredibilityofpharmaceuticalproductsandmedicalequipment,theSFDApromulgatedtheTentativeRegulationsRegardingtheSafetyandCredibilityRatingofPharmaceuticalProducts《(藥品安全信用分類管理暫行規定》)on13September2004,pursuanttowhichtheSFDAatthecountyleveloraboveregulatesthesafetyandcredibilityratingofthepharmaceuticalproductmanufacturersandresearchinstitutionsintheirjurisdictionbyestablishmentofaninformationsystemthroughwhichtherelevantpharmaceuticalproductmanufacturersandresearchinstitutionsmayberatedandrewardedaccordingly.–134–REGULATORYOVERVIEWTENDERINGREQUIREMENTSFORHOSPITALPURCHASESOFMEDICINESTheGuidingOpinionsconcerningtheUrbanMedicalandHealthSystemReform《(關於城鎮醫藥衛生體制改革的指導意見》),whichwaspromulgatedon21February2000bytheStateCommissionforRestructuringEconomicSystemsandsevenotherministriesandcommissionsinthePRC,requirepublichospitalsandhealthcareinsotherrelevantgovernmentauthoritieshavepromulgatedaseriesofr12November2001,MOHandfiveotherministriesandcommissionsjointlypromulgatedtheWorkingRegulationsofMedicalInstitutionsforPurchaseofMedicinesbyCentralizedTenderingandPriceNegotiations(Trial)《(醫療機構藥品集中招標採購和集中議價採購工作規範(試行)》),ortheWorkingRegulations,toimplementthetenderingprocessrequirementsamber2001,MOHalsopromulgatedtheSampleDocumentforMedicalInstitutionsforPurchaseofMedicinesbyCentralizedTenderingandPriceNegotiations(Trial)《(醫療機構藥品集中採購和集中議價採購文件範本(試行)》),ortheSampleDocument,kingRegulationsandtheSampleDocumentproviderulesforthetenderingprocessandnegotiationsofthepricesofpharmaceuticalproducts,operationalprocedures,acodeofco23September2004and17January2009,MOHandtheotherrelevantgovernmentauthoritiespromulgatedtheProvisionsonFurtherRegulatingPurchaseofMedicinesbyMedicalInstitutionsthroughCentralizedTendering《(關於進一步規範醫療機構藥品集中招標採購的若干規定》)andtheOpinionsconcerningFurtherRegulatingPurchaseofMedicinesbyMedicalInstitutionsthroughCentralizedTendering《(關於進一步規範醫療機構藥品集中採購工作的意見》),respectively,rdancewithNoticeonIssuingCertainRegulationsontheTrialImplementationofCentralizedProcurementofPharmaceuticalProductsbyMedicalOrganizations《(關於印發醫療機構藥品集中招標採購試點工作若干規定的通知》)promulgatedon7July2000andtheNoticeonFurtherImprovementontheImplementationofCentralizedProcurementofPharmaceuticalProductsbyMedicalOrganizations)promulgatedon8August2001,non-profit《(關於進一步做好醫療機構藥品集中招標採購工作的通知》medicalinstitutionsestablishedbythePRCgovernmentatthecountylevelorabovearerequiredtoimplementachospitalsandhealthcareinstitutionsatthecountylevelderingprocessisoperatedandorganizedbyprovincialandmunicipatralizedtenderingprocessisceexceptionofmedicinesincludedintheNationalListofEssentialDrugsandcertainotherspecialmedicines,publichospitalsandhealthcareinstitutionsthatparticipateinthetenderingprocessinprincipleshallusemedicinesincludedintheprovincialmedicinepurchasingcatalogs,asforublichospitalsandhealthcareinstitutionsmustonlypurchasethesemedicinesthroughapublictender,onlinepricebids,centralizedpricenegotiationsanddirectonlinepricelistings,ipleDocumentmustbeincludedinthetenderingdocumentsprepareasethetransparencyofmedicinepurchases,publichospitalsandhealthcareinstitutionsarerequiredtomaketheirpurchasesofmedicinesthroughanonlineplatformestablishedbyeachprovincialandmunicipalgovernmentauthority.–135–REGULATORYOVERVIEWThemanufacturersofmedicinesthatareonthemedicalinstitutions’formulariesandareotherwiseindemandbythesehospitalsareinvitedtobidandparticipateinthecentralizedtenderprocess,anufacturersmay,however,beadvisedbypharmaceuticaldistributioncompaniesandtheymayusepharmaceuticaldistributioncompaniesrganizedbid-evaluationcommittee,whichiscomposedofpharmaceuticalexpertsandclinicalmedicalexpertswhowillberandomlyselectedfromadatabaseofexpertsestablishedbytherelevantcompetentgovernmentauthority,ectionisbasedonanumberoffactors,includingbidprice,quality,clinicaleffectiveness,andmanufacturer’ISINGRESTRICTIONSPursuanttotheLawontheAdministrationofPharmaceuticalsProductsofthePRC《(中華人民共和國藥品管理法》),whichwaspromulgatedon28February2001andbecameeffectivefrom1December2001,andtheMeasuresontheExaminationofPharmaceuticalProductsAdvertisement《(藥品廣告審查辦法》),whichwaspromulgatedon13March2007andbecameeffectivefrom1May2007,anenterpriseseekingtoadvertisCAREFRAUDANDABUSEAccordingtoAntiUnfairCompetitionLawofthePeople’sRepublicofChina(中華人民共和國反不正當競爭法)(effectiveon1December1993),businessoperatorwhobribesbygivingpropertiesorusinganyothermethodinordertosellorpurchasethecommoditiesinviolationoftheCriminalLawofPRC,shallbeinvestigatedinaccordancewiththeCriminalLaw;eveniftheactsmentionedabovedonotconstituteviolationoftheCriminalLaw,thebusinessoperatormaybesubjecttoafineinanamountfrommorethanRMB10,000tolessthanRMB200,00erimProvisionsonBanningCommercialBribery《(關於禁止商業賄賂行為的暫行規定》)(‘‘InterimProvisions’’)(effectiveon15November1996)providesadetailedscopeof‘‘propertiesorusinganyothermethod.’’AsdefinedintheInterimProvisions,theterm‘‘property’’referstocashandmaterialobjects,includingpropertygivenbyabusinessoperatortoanotherentityorindividualintheformofpromotionfees,publicityfees,sponsorshipfees,researchfees,servicecharges,consultingfees,commissionsorreimbursements,inordertosellorpurchasecommodities,andtheterm‘‘othermeans’’referstoanymeansotherthangivingproperty,suchation,theInterimProvisionsalsomadeitclearthatcommercialbriberycommittedbyanyemployeeofabusinessoperatorforsellingorpurchasingcommoditiesfortheoperatorshallberegardedastheoperator’ingtoCriminalLawofthePeople’sRepublicofChina(effectiveon1October1997)andtheOpinionsoftheSupremePeople’sCourtandtheSupremePeople’sProcuratorateonIssuesConcerningtheApplicationofLawintheHandlingofCriminalCasesofCommercialBriberies《(最高人民法院、最高人民檢察院關於辦理商業賄賂刑事案件適用法律若干問題的意見》)(effectiveon20November2008),businessoperatorsinthehealthcareindustrymaybeprosecutedwithseveralchargesduetocommercialbriberies,andthesechargesinclude:crimeofacceptanceofbribesbyanon-governmentalfunctionary,crimeofofferingbribestoanon-governmentalfunctionary,crimeofacceptanceofbribes,crimeofacceptanceofbribesbyanentity,crimeofofferingbribes,crimeofofferingbribestoanentity,cdguilty,suchoperatormaybepunishedbysentenceofafixedtermofimprisonment,lifesentenceorevendeathsentence.–136–REGULATORYOVERVIEWCLASSIFICATIONOFHOSPITALSAccordingtotheInterimMeasuresofAssessmentofHospitals《(醫院評審暫行辦法》)promulgatedbytheMOHon21September2011andtheMeasuresforHospitalsClassification(Trial)《(醫院分級管理辦法(試行)》)promulgatedbytheMOHon29November1989,hospitalsinthePRCareclassifiedintothreeclassesaccordingtocompetentauthorities’anditsHospitalAssessmentComheMOH,eachhealthcareadministrativedepartmentattheprovinciallealsopromulgatedanumberofregulationswithregardtohospitalsassessments,includingtheStandardofAssessmentofClassIIIGeneralHospitals2011《(三級綜合醫院評審標準(2011年版)》)andtheStandardofAssessmentofClassIIGeneralHospitals2012《(二級綜合醫院評審標準(2012年版)》).Undertherelevantregulations,ntheassessmentresults,thehospitalmaybeclassifiedasRankIorRankIIwithinitsclass,withRankIbeingthehighest,NMENTALPROTECTIONTheMinistryofEnvironmentalProtectionofthePRCisresponsiblefulatesnationalenvironmentalqualityanddischargestandardsandmonitorsChina’nmentalprotectionbureausatthecountylevelandabovearerespnttotheEnvironmentalProtectionLawofthePeople’sRepublicofChina《(中華人民共和國環境保護法》),ortheEnvironmentalProtectionLaw,whichwaspromulgatedandbecameeffectiveon26December1989,theenvironmentalprotectiondepartmentoftheStateCouncilisinvincialgovernmentsandthelocalgovernmentsinautonomousregionsandmunicipalitiesdirectlyunderthePRCCentralGovernmentmayalsopromulgatelocalstandardsforenvironmentalprotectiononmattersnotspecifiedundernationalstandards,providedthatlocalgovernmentsmustreportsuchstandardstotherelevantdepartmentofenvnttotheLawonEnvironmentalImpactEvaluationofthePeople’sRepublicofChina《(中華人民共和國環境影響評價法》),whichwaspromulgatedon28October2002andbecameeffectiveon1September2003,manufacturersmustprepareandfileanenvironmentalimpactreportsettingforththeimpactthattheproposedconstructionprojectmayhaveontheenvironmentandthemeasurestopreventormitigatetheimpactforapprovalbytherelevantgovernmenilitiesbuiltpursuanttothisapprovalarenotpermittedtooperateuntiltherelevantenvironmentalbureauhasperformedaninspectionandissatisfiedthatthefacilitiesareincompliancewithenvironmentalstandards.–137–REGULATORYOVERVIEWTheEnvironmentalProtectionLawrequiresanyfacilitythatproducespollutantsorotherhazardstoincorporateenvironmentalprotectionmeasuresinitsoperstemshallincludeeffectivemeasurestocontrolandproperlydisposeofwastegases,wastewater,wasteresidue,itythatdischargespollutalmeasuresforbreachesoftheEnvironmentalProtectionLawincludeawarning,ityundertakingaconstructionprojectthatfailstoinstallpollutionpreventionandcontrolfacilitiesincompliancewithenvironmentalstandardsforaconstructionalliabilitymaybeimposedforamaterialviolationofenvironmentallawsnttotheAirPollutionPreventionLawofthePRC《(中華人民共和國大氣污染防治法》),whichwaspromulgatedbytheNationalPeople’sCongresson5September1987,andmostrecentlyamendedon29April2000andbecameeffectivefrom1September2000,theenvironmentalprotectionauthoritiesabovethecountylevelareinchargeofunifiedscturersdischargingpollutedairmustcomplywithapplufactureremitspollutedairatalevelexceedingnationalorlocalstandards,itmusttakecorrectionttotheWaterPollutionPreventionLawofthePRC《(中華人民共和國水污染防治法》),whichwaspromulgatedbytheNationalPeople’sCongresson11May1984,andamendedon15May1996and28February2008andbecameeffectivefrom1June2008,manufacturersmustdiaterpollutantsdischargedexceednationalorlocalstandards,themanufacturerwouldbesubjecttofinesamountingtotwotofivetimesthewaterpollution,tion,theenvironmentalprotectionauthorityhasthepowertoordersuchmanufacturertocorrecttheiractionsbyreducingtheamountofdischargeduringanufacturerfailstocorrectitsactionbytheendofthestipulatedperiod,theenvironmentalprotectionauthoritymay,subjecttoapprovalbytherelevantlevelofthePRCgovernment,TIONALHEALTHANDSAFETYPursuanttotheLaborLawofthePeople’sRepublicofChina《(中華人民共和國勞動法》)effectiveon1January1995,employersmustestablishacomprehensivemanagementsystemtoprotecttherightsoftheiremployees,includingasystemgoverningoccupationalhealthandsafetytoprovnttotheLawofManufacturingSafetyofthePeople’sRepublicofChina《(中華人民共和國安全生產法》),whichbecameeffectiveon1November2002,manufacturersmustestablishacomprehensivemanagementsystemtoensurecturersnotmeetingrelevantlegalrequirementsarenotpermittedtocommencetheirmanufacturingactivities.–138–REGULATORYOVERVIEWPursuanttotheLaborContractLawofthePRC《(中華人民共和國勞動合同法》)promulgatedbytheStandingCommitteeoftheNationalPeople’sCongresson29June2007andeffectivefrom1January2008,employersarerequired,whenemployinglabor,totruthfullyinformprospectiveemployeesofthejobdescription,workingconditions,location,occupationalhazardsandstatusofsafeproductionaswellasremunernttotheAdministrativeMeasuresGoverningtheProductionQualityofPharmaceuticalProducts(2010revisededition)《(藥品生產質量管理規範(二零一零年修訂)》),effectivefrom1March2011manufacturersofpharmaceuticalproductsarerequiredtoestablishproductionsafetyandlaborprotectionmeasuresinconnectionwithtTLIABILITYANDPROTECTIONOFCONSUMERSProductliabiliteralPrinciplesoftheCivilLawofthePeople’sRepublicofChina《(中華人民共和國民法通則》),whichbecameeffectiveon1January1987,statesthatmanufacturersandsellersofdefectivductQualityLawofthePeople’sRepublicofChina《(中華人民共和國產品質量法》),whichwasenactedin1993andamendedin2000,aimstostrengthenqualitycontrolofproductsandprotectconsumers’hislaw,manufacturersandoperatorswhoproduceandselldefectiveproductsmaybesubjecttoconfiscationofearningsfromsuchsales,therevocationofbusinesslicensesandimpositionoffines,andinseverecircumstances,ofthePeople’sRepublicofChinaontheProtectionoftheRightsandInterestsofConsumers),whichwaspromulgatedon31October1993andbecame《(中華人民共和國消費者權益保護法》effectivefrom1January1994,protectsconsumers’inessoperatorsmustcomplywiththislawwhentheymanufactureorsellgoodsand/emesituations,pharmaceuticalmanufacturersandoperatorsmaybesubjecttocriminalliabilityiftheirgoodso26December2009,theStandingCommitteeoftheNationalPeople’sCongressofthePRCpromulgatedthePRCTortLiabilityLaw《(中華人民共和國侵權責任法》),specttotheenvironment,thePRCTortLiabilityLawhighlightedtheprinciplethatpollutersaretoassumeliabilityinrespectofharmcausedbytheirenvironmentalpollution,irrespectiveofwhENTLAWThePRCgovernmentfirstprovidedproprietaryrightswithpatentprotectionassetforthinthePeople’sRepublicofChinaPatentLaw,orPatentLaw,《(中華人民共和國專利法》),ceuticalinvesrelatingtopharmaceuticalinventionsareefsrelatingtoutilitymodelpatentsanddesignpatentsareeffectivefortenyearsfromtheinitialdatethepatentapplicationwasfiled.–139–REGULATORYOVERVIEWPatentProsecutionThepatentsysteminthePRC,likemostcountriesotherthantheUnitedStates,adoptstheprincipleof‘‘firsttofile’’.Thismeansthat,wheremorethanonepersonfilesapatentapplicationforthesameinvention,tedStaRC,apatentmustpossessnovelty,hePatentLaw,noveltymeansthatbeforeapatentapplicationisfiled,noidenticalinventionorutilitymodelhasbeenpubliclydisclosedinanypublicationinthePRCorabroadorhasbeenpubliclyusedormadeknowntothepublicbyanyothermeans,whetherinoroutsideofChina,norhasanyotherpersonfiledwiththepatentauthorityanapplicationwhichdescribesanisissuedinthePRCarenotenforceableinHongKong,TaiwanorMacao,ly,theSIPOpublishesanapplicationforapharmaceuticalinvention18monthsaftertheapplicationisfiled,licantshallapplytotheSIPOforasubstanEnforcementWhenadisputearisesasaresultofinfringementofthepatentholder’spatentright,PRClawrequiresthatthepartiesfirstattempttr,ifthedisputecannotbesettledthroughconsultation,thepatentholderoraninterestedpartywhobelievesthepatentisbeinginfringedmayeitherfileacivillegalsuitorfileanadministrativecourtmayissueapreliminaryinjunctionuponthepatentholder’soraninterestedparty’sresforinfringementarecalculatedaseitherthelosssufferedbythepatentholderarisingfromthedifficulttoascertaindamagesinthismanner,damagesmaybedeterminedbyherjurisdictions,withonenotableexception,thepatenthr,iftheholderofamanufacturingprocesspatentallegesinfringementofsuchpatent,theallegedinfsoryLicenseAccordingtothePatentLaw,theSIPOmaygrantapersonwhoisnotthepatentholderacompulsorylicenseundercertaincircumstances,where,forexample,apersonpossessesthemeanstoutilizeapatentedtechnology,butsuchpersoncannotobtainalicensefromthepatentholderonreasonabletermsandinareasonableperiodoftime,orwhereanationalemergencyoranyextrationalPatentTreatiesThePRCisalsoasignatorytoallmajorintellectualpropertyconventions,includingtheParisConventionfortheProtectionofIndustrialProperty,MadridAgreementconcerningtheInternationalRegistrationofMarksandMadridProtocol,PatentCooperationTreaty,BudapestTreatyontheInternationalRecognitionoftheDepositofMicroorganismsforthePurposesofPatentProcedureandtheAgreementonTrade-RelatedAspectsofIntellectualPropertyRights.–140–REGULATORYOVERVIEWAlthoughpatentrightsarenationalrights,thereisalsoalargedegreeofinternationalco-operationunderthePatentCooperationTreaty,hePatentCooperationTreaty,applicantsinonecountrycanseekpatentprotectionforaninventionsimultaneouslyinanumberofottthatapatentapplicationispendingisnoguaranteethatapatentwillbegranted,andevenifgranted,thesARKSThePeople’sRepublicofChinaTrademarkLaw《(中華人民共和國商標法》)waspromulgatedin1982(lateramendedon27October2001)andthePeople’sRepublicofChinaTrademarkImplementingRegulations《(中華人民共和國商標法實施條例》)awsprdemarkOfficeisresponsibleforttents,thePRChasadopteda‘‘first-to-file’’providesthatthefollowingactsconstituteinfringementoftheexclusiverighttousearegisteredtrademark:.useofatrademarkthatisidenticalwithorsimilartoaregisteredtrademarkinrespectofthesamekindoforsimilarcommoditieswithouttheauthorizationofthetrademarkregistrant;saleofcommoditiesinfringingupontheexclusiverighttousetheregisteredtrademark;counterfeitingormaking,withoutauthorization,representationsofaregisteredtrademarkofanotherperson,orsaleofsuchrepresentationsofaregisteredtrademark;changingaregisteredtrademarkandsellingproductsonwhichthechangedregisteredtrademarkisusedwithouttheconsentofthetrademarkregistrant;InthePRC,aregisteredtrademarkownerwhobelievestheregisteredtrademarkisbeinginfringedhasthreeoptions:.Theregisteredtrademarkownercanprovidehistrademarkregistrationcertificateandotherrelevantevidencetotheadministrationforindustryandcommerceatthecentralorlocalgovernmentlevel,whichcan,atitsdiscretion,inistrationforIndustryandCommercemaytakevariousactions,suchasorderingtheinfringertoimmediatelyceasetheinfringingactions,seizinganddestroyinganyinfringingproductsandtrademarkinquestion,closingdowntheegisteredtrademarkownerisdissatisfiedwiththeAdministrationforIndustryandCommerce’sdecision,hemay,within15daysofreceivingtheAdministrationforIndustryandCommerce’sdecision,instituteadministrativeproceedingsincourt.–141–iedressfortrademarkinfringementincludes:——injunctions;,printnoticesinnewspapers);anddamages(sationfortheeconomiclossandinjurytoreputationasaresultoftrademarkinfringementsufferedbythetrademarkholder).—Theamountofcompensationiscalculatedaccordingtoeitherthegainsacquiredbytheinfringerfromtheinfringementduringtheinfringement,orthelosssufferedbytheregisteredtrademarkowner,includifficulttodeterminethegainsacquiredbytheinfringerfromtheinfringement,orthelosssufferedbythetrademarkowner,thecourtmayelecttoawardcompensationofnotmorethanRMB500,000..Ifacrimeissuspectedtobecommitted,thecaseshallbepromptlyreferredtothejudicialdepartmentsforhandlingaccordingtolaw.–142–