Laws & Regulations/
Regulations for Implementation of the Drug Administration Law of the People

No. 360


The Regulations for Implementation of the Drug Administration Law of the People’sRepublic of China are hereby promulgated and shall go into effect as ofSeptember 15, 2002.

Premier: ZhuRongji
August 4, 2002



Chapter I

General Provisions

Article 1 The Regulations are formulated inaccordance with the Drug Administration Law of the People’s Republic of China(hereinafter referred to as the Drug Administration law).

Article 2 The drug regulatory departmentunder the State Council shall establish a national drug  testinginstitute.

The drug regulatory department of the people’s government ofthe province, autonomous region or municipality directly under the CentralGovernment may establish drug testing institutes within its respectiveadministrative area. The plan for the establishment of local drug testinginstitutes shall be proposed by the drug regulatory department of the people’sgovernment of the province, autonomous region and municipality directly underthe Central Government and submitted to the people’s government of theprovince, autonomous region and municipality directly under the CentralGovernment for approval.

The drug regulatory department under the State Council and thedrug regulatory department of the people’s government of the province,autonomous region or municipality directly under the Central Government may,when necessary, designate any testing institute fulfilling the requirements fordrug testing to undertake drug testing.


Chapter II
Control over Drug Manufacturers

Article 3 A Drug Manufacturing Certificateshall be acquired for establishment of a drug manufacturer according to thefollowing procedures:

(1) The applicant shall submit an application to the drugregulatory department of the people’s government of the province, autonomousregion or municipality directly under the Central Government, where themanufacturing site is to be located. The drug regulatory department of thepeople’s government of the province, autonomous region or municipality directlyunder the Central Government shall, within 30 working days from the date itreceives the application, make a review according to the pharmaceuticalindustry development programs and policies issued by the State and make adecision on approval or disapproval.

(2) After completion of establishment of the plannedmanufacturer, the applicant shall apply to the original approving departmentfor acceptance inspection. The original approving department shall, within 30working days from the date it receives the application, arrange an acceptanceinspection according to the requirements for the establishment of suchmanufacturers set forth in Article 8 of the Drug Administration Law; a DrugManufacturing Certificate shall be issued to the applicant if the inspection ispassed. The applicant shall, by holding the Drug Manufacturing Certificate,register with the administrative department for industry and commerce inaccordance with law.

Article 4 Any drug manufacturer thatintends to alter the approved items in the Drug Manufacturing Certificateshall, 30 days prior to alteration of any approved items, apply to the originalcertificate-issuing authority for registration of alteration; no approved itemsmay be altered without approval. The original certificate-issuing authorityshall make a decision within 15 working days from the date it receives theapplication. The application shall, by holding the Drug ManufacturingCertificate with altered items, register the alteration with the administrativedepartment for industry and commerce in accordance with law.

Article 5 The drug regulatory department of thepeople’s government at or above the provincial level shall organize inspectionsof drug manufacturers in accordance with the Good Manufacturing Practice forPharmaceutical Products (GMP) and the measures and schedule for implementingthe GMP formulated by the drug regulatory department under the State Council,and issue a certificate to the manufacturer that complies with the GMP. For themanufacturer producing injections or radioactive pharmaceuticals and for thatproducing biological products specified by the drug regulatory department underthe State Council, the inspection of which shall be conducted by the drugregulatory department under the State Council. The format of GMP certificateshall be uniformly provided for by the drug regulatory department under theState Council.

Article 6 Any newly-established drugmanufacturer or manufacturer with newly –built drug manufacturing workshops ornewly-added dosage forms for production shall, within 30 days from the date itobtains the approval documents for manufacturing drug or from the date itsformal production is approved, apply to the drug regulatory department for GMPcertification as required. The drug regulatory department accepting theapplication shall, within six months from the date it receives the application,organize inspections as to the compliance with the GMP requirements by theapplying manufacturer. A certificate shall be issued to the manufacturer if theinspection is passed.

Article 7 The drug regulatory departmentunder the State Council shall set up a database of GMP inspectors. A GMPinspector shall be qualified as required by the drug regulatory departmentunder the State Council. A GMP inspection shall be conducted by a team ofinspectors randomly selected from the database of GMP inspectors according tothe provisions of the drug regulatory department under the State Council.

Article 8 The valid term of a DrugManufacturing Certificate is five years. To continue its drug production, theCertificate holder shall, six months prior to the expiry date of theCertificate, apply for the renewal of the Drug Manufacturing Certificateaccording to the provisions of the drug regulatory department under the StateCouncil.

Where a drug manufacturer terminates its drug production or isclosed down, its Drug Manufacturing Certificate shall be withdrawn by theoriginal certificate-issuing authority.

Article 9 Any drug substance used by a drugmanufacturer to produce drug products shall have a drug approval number or animport drug license or a pharmaceutical product license issued by the drugregulatory department under the State Council upon examination, with theexception of Chinese crude drugs and the prepared slices of Chinese crude drugsover which no control by approval number is exercised.

Article 10 In accordance with the provisionsin Article 13 of the Drug Administration Law, any drug manufacturer beingentrusted with contract production of the drug shall have a GMP certificatecorresponding to the contracted drug.

No vaccines, blood products or other drugs specified by thedrug regulatory department under the State Council may be contracted forproduction.


Chapter III
Control over Drug Distributors

Article 11 For establishment of a drugwholesaler, the applicant shall submit an application to the drug regulatorydepartment of the people’s government of the province, autonomous region ormunicipality directly under the Central Government, where the planned drugwholesaler is to be located. The drug regulatory department of the people’sgovernment of the province, autonomous region or municipality directly underthe Central Government shall, within 30 working days from the date it receivesthe application, make a decision on approval or disapproval according to thestandards for establishment set forth by the drug regulatory department underthe State Council. After completion of establishment of the planned wholesaler,the applicant shall apply to the original approving department for acceptanceinspection. The original approving department shall, within 30 working daysfrom the date it receives the application, organize an acceptance inspectionaccording to the requirements for establishment of drug distributors set forthin Article 15 or the Drug Administration Law and issue the Drug SupplyCertificate to the applicant if the inspection is passed. The applicant shall,with the Certificate, register with the administrative department for industryand commerce in accordance with law.

Article 12 For establishment of a drugretailer, the applicant shall submit an application to the drug regulatoryinstitution of the municipality divided into districts, or to the drugregulatory institution at the county level which is directly set up by the drugregulatory department of the people’s government of the province, autonomousregion or municipality directly under the Central Government, where the plannedretailer is to be located. The drug regulatory institution accepting theapplication shall, within 30 working days from the date it receives theapplication, make a decision on approval or disapproval after the reviewaccording to the provisions of the drug regulatory department under the StateCouncil, taking into consideration the number of permanent residents,territory, transportation and practical needs in the place. After completion ofestablishment of the planned retailer, the applicant shall apply to theoriginal approving department for acceptance inspections. The originalapproving department shall, within 15 working days from the date it receivesthe application, organize acceptance inspections according to the requirementsfor establishment of drug distributors set forth in Article 15 of the DrugAdministration Law and issue a Drug Supply Certificate if inspections arepassed. The applicant shall, with the Certificate, register with theadministrative department for industry and commerce in accordance with law.

Article 13 The drug regulatory department ofthe people’s government of the province, autonomous region or municipalitydirectly under the Central Government shall be responsible for thecertification of drug distributors. A drug distributor shall, according to theimplementing measures and schedule formulated by the drug regulatory departmentunder the State Council, undergo the Good Supply Practice for PharmaceuticalProducts (GSP) inspections organized by the local drug regulatory department ofthe people’s government of the province, autonomous region or municipalitydirectly under the Central Government and obtain a GSP certificate. The formatof GSP certificate shall be uniformly provided for by the drug regulatorydepartment under the State Council.

Any newly-established drug wholesaler or retailer shall, within30 days from the date it obtains the Drug Supply Certificate, apply for the GSPcertification to the drug regulatory department or institution which has issuedit the Drug Supply Certificate. The drug regulatory institution accepting thedrug retailer’s application for certification shall, within seven working daysfrom the date it receives the application, transfer the application to the drugregulatory department of the people’s government of the province, autonomousregion or municipality directly under the Central Government, which isresponsible for organizing inspections of drug distributors. The drugregulatory department of the people’s government of the province, autonomousregion or municipality directly under the Central government shall, withinthree months from the date it receives the application, organize inspections ofthe drug wholesaler or retailer as to its compliance with the GSP according tothe provisions of the drug regulatory department under the State Council and issuea GSP certificate to the drug wholesaler or retailer passing the inspections.

Article 14 A database of GSP inspectorsshall be set up by the drug regulatory department of the people’s government ofthe province, autonomous region or municipality directly under the CentralGovernment. A GSP inspector shall be qualified as required by the drugregulatory department under the State Council. A GSP inspection shall beconducted by a team of inspectors randomly selected from the said databaseaccording to the provisions of the drug regulatory department under the StateCouncil.

Article 15 The State adopts a classificationsystem for prescription drugs and non-prescription drugs. The State subdividesnon-prescription drugs into Class A drugs and Class B drugs according to thelevel of safety.

Any drug retailer distributing prescription drugs or Class Anon-prescription drugs shall have licensed pharmacists or other pharmaceuticaltechnicians whose qualifications are legally recognized. Any retailer distributingClass B non-prescription drugs shall have pharmacy staff members who havepassed the examination organized by the local drug regulatory institution ofthe municipality divided into districts or by the local drug regulatoryinstitution at the county level which is directly set up by the drug regulatorydepartment of the people’s government of the province, autonomous region ormunicipality directly under the Central Government.

Article 16 Any drug distributor that intends toalter the approved items in the Drug Supply Certificate shall, 30 days prior tothe alteration of any approved items, apply to the original certificate-issuingauthority for registration of alteration; no approved items may be alteredwithout approval. The original certificate-issuing authority shall make adecision within 15 working days from the date it receives the application. Theapplication shall, by holding the Drug Supply Certificate with the altereditems, register the alteration with the administrative department for industryand commerce in accordance with law.

Article 17 The valid term of a Drug SupplyCertificate is five years. To continue its drug distribution, the Certificateholder shall, six months prior to the expiry date of the Certificate, apply forthe renewal of the Drug Supply Certificate according to the provisions of thedrug regulatory department under the State Council.

Where a drug distributor terminates its drug distribution or isclosed down, its Drug Supply Certificate shall be withdrawn by the original certificate-issuingauthority.

Article 18 Where there is no drug retailersat town or country fairs in remote areas with poor communications, the localdrug retailers may, after obtaining approval from the local drug regulatoryinstitution of the county (municipality) and being registered with theadministrative department for industry and commerce, set up stores at the fairsto sell non-prescription drugs within the approved scope for drug distribution.

Article 19 Drug manufacturers, drugdistributors and medical institutions engaged in on-line drug transactionsthrough Internet and the drugs so transacted shall be in conformity with theprovisions in the Drug Administration Law and in the Regulations. The measuresfor administration of on-line drug distribution services shall be formulated bythe drug regulatory department under the State Council jointly with the otherrelevant departments under the State Council.


Chapter IV
Control over Pharmaceuticals in Medical Institutions

Article 20 To establish a pharmaceuticalpreparation unit in a medical institution, an application shall be submitted tothe local health administrative department of the people’s government of theprovince, autonomous region or municipality directly under the CentralGovernment, and, after being consented upon examination, be presented to thedrug regulatory department of the people’s government at the same level forreview and approval. Approval shall be given to the medical institution if itpasses the review by the said drug regulatory department and a PharmaceuticalPreparation Certificate for Medical Institution shall be issued to it.

The health administrative department and the drug regulatorydepartment of the people’s government of the province, autonomous region ormunicipality directly under the Central Government shall, within 30 workingdays from the dates they receive the application respectively, make their owndecisions whether or not to consent or approve the application accordingly.

Article 21 Any medical institution thatintends to alter the approved items in the Pharmaceutical PreparationCertificate for Medical Institution shall, 30 days prior to the alteration ofany approved items, apply to the original examining and approving departmentsfor registration of alteration according to the provisions in Article 20 of theRegulations; no approved items may be altered without approval. The originalexamining and approving departments shall make their own decisions within 15working days from the dates they receive the application respectively.

Any medical institution which intends to add new dosage formsor change dispensing sites shall, after passing the acceptance inspection bythe local drug regulatory department of the people’s government of theprovince, autonomous region or municipality directly under the CentralGovernment, go through the registration of alteration of the PharmaceuticalPreparation Certificate for Medical Institution according to the provisions inthe preceding paragraph.

Article 22 The valid term of aPharmaceutical Preparation Certificate for Medical institution is five years.To continue dispensing a pharmaceutical preparation, the medical institutionshall, six month prior to the expiry date of the Certificate, apply for therenewal of the Pharmaceutical Preparation Certificate for Medical Institutionaccording to the provisions of the drug regulatory department under the StateCouncil.

Where a medical institution terminates dispensingPharmaceutical Preparations or is closed down, its Pharmaceutical PreparationCertificate for Medical Institution shall be withdrawn by the originalcertificate-issuing authority.

Article 23 To dispense a pharmaceuticalpreparation, the medical institution shall submit the dossier and samples accordingto the provisions of the drug regulatory department under the State Council,and the pharmaceutical preparation may only be dispensed after being approvedby the local drug regulatory department of the people’s government of theprovince, autonomous region or municipality directly under the CentralGovernment and being issued a pharmaceutical preparation approval number.

Article 24 No pharmaceutical preparationsdispensed by medical institutions may be marketed or marketed in disguisedforms, nor may any advertisement of such pharmaceutical preparations bereleased.

When a major disaster, epidemic situation or any otheremergency occurs, or there is an urgent need clinically but no supply of theneeded drug in market, the pharmaceutical preparations dispensed by a medicalinstitution may be subject to transfer allocation and use by other designatedmedical institutions within a specified time limit, upon approval by the drugregulatory department under the State Council or by the drug regulatory departmentof the people’s government of a province, autonomous region or municipalitydirectly under the Central Government.

Transfer allocation and use of special pharmaceuticalpreparations regulated by the drug regulatory department under the State Council,and the transfer allocation and use of pharmaceutical preparations dispensed bymedical institutions among provinces, autonomous regions, or municipalitiesdirectly under the Central Government shall be subject to the approval by thedrug regulatory department under the State Council.

Article 25 Pharmacy personnel of medicalinstitutions who check and dispense prescriptions shall be the pharmaceuticaltechnicians whose qualifications are legally recognized.

Article 26 When purchasing drugs, medical institutionsshall keep the authentic and complete records. In purchase records shall beindicted the adopted name of the drug in China, dosage form, strength, batchnumber, date of expiry, manufacturer, supplier, purchase volume, purchaseprice, date of purchase and other items specified by the drug regulatorydepartment under the State Council.

Article 27 Drugs provided to patients bymedical institutions shall be within the scope of diagnoses and treatments anddispensed according to the prescriptions of licensed doctors or licensedassistant doctors.

The scope of drugs purchased and provided to patients by familyplanning technical service institutions shall be in conformity with the scopeof services approved and the drugs shall be dispensed according to theprescriptions of licensed doctors or licensed assistant doctors.

Out-patient departments, clinics and any other medicalinstitutions, which are set up by individuals, may not purchase or providedrugs other than those commonly used and those for emergency treatment. Therange and category of the drugs commonly used and those for emergency treatmentshall be determined by the local health administrative department of thepeople’s government of the province, autonomous region, or municipality directlyunder the Central Government jointly with the drug regulatory department at thesame level.


Chapter V
Control over Drugs

Article 28 Institutions for non-clinical safetyevaluation and study of drugs shall implement the Good Laboratory Practice forNon-Clinical Laboratory Studies (GLP) and institutions for drug clinical trialshall implement the Good Clinical Practice (GCP). The GLP and GCP shall beformulated by the drug regulatory department under the State Council throughrespective consultation with the science and technology administrativedepartment under the State Council and the health administrative departmentunder the State Council.

Article 29 Clinical trials, manufacturing orimportation of drugs shall be in conformity with the provisions in the DrugAdministration Law and in the Regulations, and shall be reviewed and approvedby the drug regulatory department under the State Council. The drug regulatorydepartment under the State Council may authorize the drug regulatory departmentof the people’s government of the province, autonomous region or municipalitydirectly under the Central Government to conduct site inspection of researchand development conditions of the drugs being applied, to conduct preliminaryreview of the submitted dossier, and to test the pilot samples. The specificmeasures therefore shall be formulated by the drug regulatory department underthe State Council.

Article 30 Any clinical trial to be conducted forresearch and development of a new drug shall be subject to the approval by thedrug regulatory department under the State Council in accordance with theprovisions in Article 29 of the Drug Administration Law.

When an application for conducting clinical trials is approvedby the drug regulatory department under the State Council, the applicant shallselect institutions for clinical trials from the lawfully certified ones toconduct the trials, and make a report thereof to the drug regulatory departmentand health administrative department under the State Council for the record.

Prior to the drug clinical trial, the institution for drugclinical trial shall provide the subjects or their guardians with the truthfulinformation on the trial, and obtain a written informed consent

Article 31 For production of a drug admitted bynational drug standards, an application shall, in accordance with theprovisions of the drug regulatory department under the State Council, besubmitted to the drug regulatory department of the people’s government of theprovince, autonomous region or municipality directly under the CentralGovernment or to the drug regulatory department under the State Council, andthe relevant technical data and supporting documents shall be provided. Thedrug regulatory department of the people’s government of the province,autonomous region or municipality directly under the Central Government shall,within 30 working days from the date it receives the application, review andmake comments, and report the matter to the drug regulatory department underthe State Council for review while notifying the applicant of its comments. Ifall the requirements are fulfilled upon review, a drug approval number shall beissued by the drug regulatory department under the State Council.

Article 32 Where a drug is produced according toan interim standard, an application shall be submitted for formalization of thestandard three months prior to the expiry date of the interim standardaccording to the provisions of the drug regulatory department under the StateCouncil; the drug regulatory department under the State Council shall, within12 months from the expiry date of the interim standard, review and approve theinterim standard as formal one if it fulfills the requirements for theformalization set forth by the drug regulatory department under the StateCouncil. Where an applicant does not make such an application or the originalinterim standard fails to fulfill the requirements for the formalization, thedrug regulatory department under the State Council shall withdraw the interim standardand the approval number for drug production issued on the basis of the saidinterim standard.

Article 33 For alteration of any items indicatedin the approval documents and their attachments for new drug research anddevelopment, production or importation of a drug, a supplementary applicationshall be submitted to the drug regulatory department under the State Council;if all the requirements are fulfilled upon review, an approval shall be givenby the drug regulatory department under the State Council.

Article 34 The drug regulatory department underthe State Council may, based on the needs for protection of public health, setan observation period of not more than five years for a new drug produced by adrug manufacturer; and no approval shall be given to any other manufacturer toproduce or import the said drug during the observations period.

Article 35 The State protects undisclosed data ofdrug study and others which are independently acquired and submitted by drugmanufacturers or sellers to obtain production or marketing approval of thedrugs in question which contain new chemical entities. No one may make unfaircommercial use of the said data.

Within six years from the date a drug manufacturer or sellerobtains the approval documents for producing or marketing a drug containing newchemical entities, if any other applicant uses the data mentioned in thepreceding paragraph to apply for approval for production or marketing of thedrug in question without permission of the original applicant who has obtainedthe approval, no approval may be given to any other applicant by the drugregulatory department except that the data submitted are acquiredindependently.

No drug regulatory department maydisclose the data set forth in the first paragraph of this Article except
(1) for the need of public interests; or
(2) where steps are taken to ensure that the data are protected againstunfair commercial use.

Article 36 Any drug applied to be importedshall be the one obtained marketing authorization in the country or region ofmanufacturing. A drug without such an authorization may be approved of itsimportation in accordance with the provisions in the Drug Administration Lawand in the Regulations, provided that its safety, efficacy and clinical needs havebeen confirmed by the drug regulatory department under the State Council.

For importation of a drug, an application for registrationshall be made according to provisions of the drug regulatory department underthe State Council. A drug may only be imported after an Import Drug License isgiven if it is produced by a foreign manufacturer, or a Pharmaceutical ProductLicense is given if it is produced by a manufacturer in Hong Kong, Macao orTaiwan of China.

Article 37 Any medical institution that urgentlyneeds to import a small amount of drugs shall, with a Practicing License ofMedical Institution, submit an application to the drug regulatory departmentunder the State Council, and the drugs in question may only be imported uponapproval. Such import drugs shall only be used in the designated medicalinstitution for specified purpose.

Article 38 After import drugs arrive at the port,the drug importer shall file a record with the local drug regulatory departmentin the place where the port is located with the Import Drug License orPharmaceutical Product License, the original copy of the certificate or origin,duplicate copy of the purchase contract, packing list, bill of freight,shipping invoice, certificate of analysis for the release of drugs by themanufacturer, inset sheet and other documents. The said drug regulatorydepartment shall review the documents submitted and issued a Drug Import Noteif they comply with the requirements. The drug importer shall, with the DrugImport Note, complete the formalities for customs declaration and clearancewith the Customs.

The drug regulatory department in the place where the port islocated shall notify the drug testing institution to conduct sampling andtesting of the import drugs on each batch basis with the exception of thecircumstances set forth in Article 41 of the Drug Administration Law.

Article 39 Vaccines, blood products, diagnosticreagents in vitro for blood donor screening and other biological productsregulated by the drug regulatory department under the State Council shall besubject to testing or review for approval according to the provisions of thedrug regulatory department under the State Council before being marketed orimported; any product that fails in testing or has not been approved shall notbe marketed or imported.

Article 40 The State encourages cultivation ofChinese crude drugs. Control through approval number shall be exercised overthe Chinese crude drugs that can be cultivated or raised on a large scale andin an intensified way and whose quality can be controlled and fulfills therequirements laid down by the drug regulatory department under the StateCouncil.

Article 41 The drug regulatory department underthe State Council shall re-evaluate the drugs approved for production andmarketing and, on the basis of the re-evaluation results, may take measures toorder the revision of insert sheet or suspension of production, marketing oruse of a drug, or withdraw the approval documents of drugs with serious adversereaction or harmful to human health due to other reasons.

Article 42 The valid term of a drug approvalnumber, Import Drug License and Pharmaceutical Product License issued by thedrug regulatory department under the State Council is five years. To continueits drug production or importation, the applicant shall submit are-registration application six months prior to the expiry date. When makingre-registration of a drug, the applicant shall submit the relevant dataaccording to the provisions of the drug regulatory department under the StateCouncil. If no application for the re-registration of a drug is made uponexpiration of the valid term, or the application fails to comply with theprovisions on re-registration of the drug regulatory department under the StateCouncil upon review, the drug approval number, Import Drug License orPharmaceutical Product License shall be withdrawn.

Article 43 No contents involving prevention,treatment or diagnosis of human diseases shall be included in the package,label or insert sheet and the related promotional materials for promoting anon-drug product, except as otherwise provided by laws or administrativeregulations.


Chapter VI
Control over Drug Packaging

Article 44 Immediate packaging materials andcontainers used by drug manufacturers shall fulfill the requirements formedicinal use and the standards for ensuring human health and safety, and besubject to registration upon approval by the drug regulatory department underthe State Council.

The drug regulatory department under the State Council shall beresponsible for working out and issuing the measures for control over immediatepackaging materials and containers, the product directories and therequirements and standards for medicinal use.

Article 45 Packaging materials and containersselected for production of prepared slices of a Chinese crude drug shallaccommodate to drug properties. No prepared slices of a Chinese crude drug maybe marketed whose package fails to conform to regulations. A label shall beprinted on or attached to the package of prepared slices of a Chinese crudedrug.

On the label of prepared slices of a Chinese crude drug shallbe indicated the name of the drug, specifications, origin or production,manufacturer, product batch number and production date; if the said drug iscontrolled by approval number, the drug approval number shall also beindicated.

Article 46 The package, label and insert sheet ofa drug shall be printed in accordance with the provisions in Article 54 of theDrug Administration Law and those formulated by the drug regulatory departmentunder the State Council.

The trade name of a drug shall conform to the provisions of thedrug regulatory department under the State Council.

Article 47 The immediate packaging materials andcontainers, used by medical institutions for dispensing pharmaceuticalpreparations, as well as the labels and insert sheets thereof, shall conform tothe provisions in Chapter VI of the Drug Administration Law and the relevantprovisions in the Regulations, and be subject to approval by the drugregulatory department of the people’s government of the province, autonomousregion or municipality directly under the Central Government.


Chapter VII
Control over Drug Pricing and Advertising

Article 48 For drug pricing, the State exercises asystem under which the prices are fixed or guided by the government orregulated by the market.

For drugs listed in the directory of drugs for national basicmedical insurance and drugs not listed in the directory but monopolisticallymanufactured and distributed, their prices shall be fixed or guided by thegovernment; the prices of other drugs shall be regulated by the market.

Article 49 For a drug whose price is fixedor guided by the government according to law, the competent pricing departmentof the government shall fix and adjust its sale prices in accordance with theprinciple set forth in Article 55 of the Drug Administration Law; and, infixing and adjusting its sale price, control over the average social rate ofdrug sales cost, drug sales profit margin, and the differential rate in drugcirculation shall be manifested. The specific pricing measures shall beformulated by the competent pricing department under the State Council inaccordance with the relevant provisions in the Pricing Law of the People’sRepublic of China (hereinafter referred to as the Pricing Law).

Article 50 For a drug whose price shall be fixedor guided by the government and is so established, the competent pricingdepartment shall publish the said price and specify the date for going intoeffect in designated publications in accordance with the provisions in article24 of the Pricing Law.

Article 51 For a drug whose price is fixed orguided by the government, the competent pricing department shall, in fixing oradjusting the price, organize experts in pharmaceutical, medical, economic andother fields to conduct assessment; and, if necessary, it shall solicitcomments from drug manufacturers, drug distributors, medical institutions,citizens and other relevant units and persons.

Article 52 The competent pricing departmentof the government may, in practicing drug price monitoring according to theprovisions in Article 28 of the Pricing Law, appoint certain drug manufactures,drug distributors and medical institutions as drug price monitoring units forthe purpose of understanding and analyzing the changes and trends of drugprices; the appointed units shall provide cooperation, support and truthfulinformation.

Article 53 For publishing a drugadvertisement, the relevant materials shall be submitted to the local drugregulatory department of the people’s government of the province, autonomousregion or municipality directly under the Central Government where the drugmanufacturer is located. The drug regulatory department of the people’sgovernment of the province, autonomous region or municipality directly underthe Central Government shall, within ten working days after it receives therelevant materials, make a decision upon review on whether to issue theapproval number for drug advertisement. Where the approval number for drugadvertisement is issued upon review, a record shall be filed with the drugregulatory department under the State Council concurrently. The specificmeasures for drug advertisement shall be formulated by the drug regulatorydepartment under the State Council.

For publishing an advertisement for an import drug, anapplication for approval number for drug advertisement shall be submitted tothe local drug regulatory department of the people’s government of theprovince, autonomous region or municipality directly under the CentralGovernment where the drug import agency is located, in accordance with theprovisions in the preceding paragraph of this Article.

For publishing an advertisement in a province, autonomousregion or municipality directly under the Central Government other than theplace where the drug manufacturer or drug import agency is located, anyenterprise publishing advertisement shall file a record in advance with thedrug regulatory department of the province, autonomous region or municipalitydirectly under the Central Government where the advertisement is to bepublished. If the drug regulatory department of the province, autonomous regionor municipality directly under the Central Government accepting the recordfinds that the approved contents of the drug advertisement does not conform tothe provisions on the control of drug advertisement, it shall turn over thematter to the original verifying and issuing department for handling.

Article 54 For a drug whose production,marketing or use is ordered to be suspended upon decision of the drugregulatory department under the State Council or of the drug regulatorydepartment of the people’s government of the province, autonomous region ormunicipality directly under the Central Government, no advertisement for thedrug may be