China Cracks Down on Illegal Online Drug Sales

Global Life Sciences: China Update

In July 2013, various Chinese authorities launched a campaign to jointly crack down on illegal online drug sales in China. As part of this campaign, the China Food and Drug Administration (“CFDA”) issued the Notice on Strengthening the Administration of Online Drug Sales (the “Notice”) on October 29, 2013, which provides further requirements on the administration of online drug sales. Highlights of this Notice include:

  • Strengthening the administration of online drug sale qualifications. Online drug trading websites established by or for drug manufacturers and distributors must obtain a Qualification Certificate for Online Drug Trading Services. If such websites are only established for the purpose of online drug trading with other enterprises or medical institutions, they cannot sell drugs directly to individual consumers beyond their service scope. Further, single-unit retail pharmacies are not qualified to sell drugs online.
  • Prohibiting the online display and sale of ephedrine-containing drugs. China has been restricting the retail sales of ephedrine-containing OTC drugs since 2012. As required by CFDA, retail pharmacies must check and record the ID of the buyer when selling drugs containing ephedrine. CFDA further clarifies in this Notice that displaying ephedrine-containing drugs on a website or selling them to individual consumers online is prohibited.
  • Prohibiting the online sale of prescription drugs. The Notice reiterates that drug trading websites established by chain pharmacies are only permitted to sell OTC drugs. Displaying or selling prescription drugs on the drug trading web pages is prohibited.
  • Strengthening the administration of drug delivery for online sales. To ensure the quality and safety of drugs sold online, the Notice requires that chain pharmacies shall deliver the drugs through their own drug delivery systems in compliance with applicable online drug sale regulations and China GSP.

The Notice reaffirms CFDA’s further commitment to cracking down on illegal online drug sales in China. Violation of the above requirements may incur severe legal consequences, for example, revocation of the Qualification Certificate for Online Drug Trading Services and shutting down the drug trading website.

For further information on the China Life Sciences Practice, please contact:

Chen Yang

+86.10.6505.5359

cyang@sidley.comZhengyu Tang

+86.21.2322.9318

zytang@sidley.comYuet Ming Tham

+852.2509.7645

yuetming.tham@sidley.comJoseph Chan

+86.21.2322.9328

Joseph.chan@sidley.com

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