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A new Chinese law (in effect as of December 1, 2019) makes third-party online platform medicine sales legal, appropriately ends a draconian definition of counterfeit drugs, and effectively decriminalizes personal drug importation, but with a lot of gray! The changes were part of a major overhaul of the Drug Administrative Law of the People’s Republic of China (DAL). The previous linked to page is in Chinese but you can use Google translate to read it in English or another language. A summary in English can be found here:

Summary of Revised Chinese Drug Administration Law

For supporters of online access to safe and affordable imported medicines, this is kind of cool.

Decriminalizing Personal Drug Importation and Redefining “Counterfeit”

Until December 1st, people who imported medicines for personal use approved in another country, but not registered in China, could be prosecuted for counterfeit drug imports. While the DAL doesn’t legalize personal medicine imports of drugs approved in a foreign market, China will exempt or be lenient for imports of small quantities of such drugs. The relevant section of law is translated below:

“The import of a small number of drugs that have been legally marketed abroad without approval, and the circumstances are relatively minor, may be mitigated or exempted from punishment according to law.”

As reported in the New York Times, according to Yanzhong Huang, a senior fellow for global health on the Council on Foreign Relations, “Under the new definition, a cheaper generic drug made in India can be imported and sold in China…Given that these drugs are usually much cheaper than the prohibitively priced Western patented drugs, a significantly larger percentage of Chinese people can now afford those lifesaving drugs.”

Dr. Huang also stated, “This new move is significant because it redefines ‘fake or counterfeit drugs’ by focusing on their safety and efficacy, not on whether they obtain government approval,”

The genesis of this change was the conviction and imprisonment of Lu Yong for trading in counterfeit drugs, at least as defined in China. Mr. Lu had Leukemia. He could not afford the brand drug Gleevec in China but discovered that there were lawfully made and sold generic versions in India. After treating himself, he began to help many others by purchasing and obtaining the cancer medicines for them from India. A judge overturned the conviction on the commonsense basis that the so-called “counterfeit” drug was genuine, and that Mr. Lu was simply helping people stay alive. For a summary of this story and links to related news, see: No Prosecution for Prescription Access Hero Charged with Counterfeit Drug Sales in China.

It’s not just cancer drugs that are unobtainable or priced too high in China, but drugs to treat chronic conditions such as heart disease and diabetes. It will be interesting to see how this change in law impacts the international online pharmacy market.

Buying Drugs Online from Retail Platforms is Legal

The DAL now allows online sales by “third-party platforms” of medicines approved in China, but they must register with the drug regulatory department. Such platforms must “review the qualifications of the drug marketing license holders and drug distributors applying to enter the platform, ensure that they meet the legal requirements, and manage the drug operations that occur on the platform.” As I see it, although I hope to have updated and more definitive details soon, a third-party platform could be something akin to Amazon or eBay. Such platforms could register properly licensed pharmacies that could sell their medicines by mail order, pursuant to other applicable pharmacy laws in China, such as prescription requirements.

To those readers familiar with issues and policies relating to online pharmacies, China’s new law addressing online platforms may seem confusing. The law does not relate specifically to “online pharmacies.” Per Reuters, as of 2015 online pharmacy in China was legal, and accounted for 3% of retail sales by 2016, per China Daily. It may be that third-party platforms are such a dominant force in retail sales in China that policymakers don’t see a pathway for retail pharmacies to directly gain market share. Last year, the Financial Times reported that online retail giants Alibaba and JD were selling medicines in a gray area of law. Presumably the DAL will clarify what they must now do.

The aforementioned regulatory changes were not the main focus of revised DAL. Critical changes included new rules for registering drugs for market authorization and importation, improving drug quality and integrity of distribution, policies to encourage innovation and lower drug prices, and instituting stiffer penalties for the manufacture and sale of counterfeit drugs.

The decriminalization of personal drug imports and re-defining of “counterfeit drug” opens the door for more people in China to obtain medications they cannot access or afford locally, just like in the United States. However, the law’s ambiguity is disconcerting. It states that personal imports could be subject to light penalties or none, but it doesn’t specify which actions lead to which consequences. But it’s interesting to see how China is addressing both online sales and importation in a manner that appears future-oriented, allowing internet innovation to take its course for medicine sales, and compassionate, in that people will essentially be permitted to buy medications they need from other countries when they can’t get them locally.

These changes to drug laws in China are relevant to American consumers because they support a growing body of evidence and advocacy that people everywhere should be able to import legitimate medicines for reasons of cost or availability.

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