China drafts new penalties on counterfeit drugs, pharma price manipulation

China is drafting plans to increase penalties on pharmaceutical companies that manipulate prices, sell counterfeit drugs or otherwise violate pharmaceutical laws. The plans include a credit rating system to incentivize drug firms to lower prices in exchange for access to China’s vast patient pool. 


The draft changes to the Drug Administration Law by China’s National Healthcare Security Administration (NHSA) are the second since last April, as China seeks to bolster enforcement of the pharmaceuticals market with structural changes to drug standards. Designed to address price manipulation, bribery, monopolistic practices, and breaches of contracts, the draft changes would apply equally to domestic and imported drugs and vaccines. They introduce a system to rate companies as general, medium, severe, or particularly severely dishonest. They increase penalties for violations of pharmaceutical laws, and they provide for publicizing the names of companies that violate the laws.


If implemented, the changes will include mechanisms for pharmaceutical manufacturers to improve their rating by erasing prohibited price markups, issuing a public apology, and returning illegal gains.