Major amendments to the Pharmaceuticals Administration Law were adopted on February 28, 2001 and will become effective on December 1, 2001, leaving almost 90% of the original law revised, with significant new contents added.

This sweeping legislative change is aimed to tackle such problems as over-pricing, false advertising, unauthorized manufacturing and trading of drugs, counterfeit and inferior drugs, as well as others.

The new law simplifies the examination and approval procedures related to pharmaceutical production and distribution procedures. Enterprises may now apply to the State Administration of Industry and Commerce for licenses after receiving permission from the state pharmaceutical regulatory department, instead of undergoing procedures with the three different institutions as previously required. Licensing for wholesale and retail pharmaceutical firms have also been streamlined.

In an effort to standardize the supervision and management over pharmaceutical production and distribution, the new law abolishes local standards and unifies the examination and approval procedures for pharmaceuticals under national standards. The new law also improves the management of imported drugs. With a few exceptions, imported drugs may now enter the Chinese market after obtaining a registration certificate with an import permit and applying for customs entry at the designated port.

The new law intensifies enforcement measures and the punishment for illegal activities. The production and sale of counterfeit and inferior drugs is defined more clearly than in the earlier law, and more severe punishments are stipulated.

Further information on the amended Pharmaceuticals Administration Law and other related laws in China may be obtained from the Beijing and Hong Kong Offices of Morrison & Foerster LLP.

Because of the generality of this newsletter, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.