I. Introduction

In 2017, the former China Food and Drug Administration issued the Administrative Measures for the Supervision of Online Drug Operations (Draft for Comments),

which adopted the principle of "consistency between online and offline" to regulate online drug sales activities, with particularly stringent oversight of prescription drugs. It stipulated that prescription drugs shall not be sold online and shall not be displayed via the internet. In 2018, the former China Food and Drug Administration issued the Administrative Measures for the Supervision of Online Drug Sales (Draft for Comments), which continued to prohibit the sale of prescription drugs on online platforms.

In 2019, the newly revised Drug Administration Law was officially promulgated. Article 61 of the Drug Administration Law provides that "Drug marketing authorization holders and drug distribution enterprises that sell drugs through the internet shall comply with the relevant provisions of this Law on drug distribution; specific administrative measures shall be formulated by the drug regulatory authority of the State Council jointly with the health authority of the State Council and other relevant departments." From this point onward, online drug sales activities were formally recognized at the legal level. In the same year, the State Administration for Market Regulation, in the Administrative Measures for the Supervision of Drug Distribution (Draft for Comments), stipulated requirements for online drug sales, platform management, sales filing, and other regulatory systems for the supervision of online drug sales.

In 2020, the National Medical Products Administration issued the Administrative Measures for the Supervision of Online Drug Sales (Draft for Comments), which, for the first time, permitted the sale of prescription drugs on online platforms. In May 2022, the National Medical Products Administration issued the Regulations for the Implementation of the Drug Administration Law (Revised Draft for Comments), which set forth provisions on the management of online drug sales and the obligations of third-party platforms. In September of the same year, the Administrative Measures for the Supervision of Online Drug Sales was formally promulgated and took effect on December 1.

Through the above developmental process, the legal regulatory framework for online drug sales in China has been formally established, encompassing not only the regulation of the drugs themselves but also clear regulatory measures for operators, sales platforms, transportation, and other aspects. This article will interpret the Administrative Measures for the Supervision of Online Drug Sales from an enterprise perspective.

II. Legal Provisions

1. Qualifications Required for Online Drug Sales Enterprises

The "Measures for the Administration of Online Drug Sales" stipulate the qualifications required for enterprises engaged in online drug sales. Enterprises engaged in online sales shall be drug marketing authorization holders or drug distribution enterprises that possess the capability to ensure the safety of drugs sold online. Chinese herbal decoction piece manufacturers selling their own produced Chinese herbal decoction pieces shall fulfill the relevant obligations of drug marketing authorization holders.[i] Furthermore, online drug sales enterprises shall operate in accordance with the approved business methods and business scope. That is, if an enterprise is a drug marketing authorization holder, it may only sell drugs for which it has obtained a drug registration certificate. Enterprises that have not obtained a drug retail qualification are also prohibited from selling drugs to individuals.[ii]

In summary, the types of enterprises that may engage in online drug sales are limited to drug marketing authorization holders, qualified drug distribution enterprises, or Chinese herbal decoction piece manufacturers. Furthermore, the drugs sold on online platforms must not exceed the scope of drugs that the enterprise is permitted to sell.

Enterprises engaged in online drug sales are also required to report to the drug regulatory authorities. The content of the report includes the name of the enterprise conducting online sales, the website name, the application name, the IP address, and information such as the Drug Manufacturing License or the Drug Distribution License. Drug marketing authorization holders or holders of a wholesale Drug Distribution License shall report to the provincial-level drug regulatory authority, while drug retail entities only need to report to the municipal or county-level drug regulatory authority.[iii]

2.Qualifications Required for Online Drug Sales Platforms

The "Measures for the Online Sale of Drugs" stipulate that a platform shall file for recordation with the provincial drug regulatory authority in the place where the platform is located regarding information such as the enterprise name, legal representative, Uniform Social Credit Code, website name, and domain name. Furthermore, the provincial drug regulatory authority is also required to publicly disclose the platform's recordation information.[iv]

Meanwhile, pursuant to the "Measures for the Administration of Internet Drug Information Services" and the "Measures for the Administration of Internet Information Services," the sponsoring entity of a platform shall submit an application to the provincial food and drug regulatory authority in its locality. Upon review and approval, it shall then apply to the information industry regulatory authority of the State Council or the provincial telecommunications regulatory authority for an operating permit or recordation formalities.[v]

3.Prohibited Drugs for Sale

The current Measures for the Administration of Online Sale of Drugs already permits the sale of prescription drugs on online platforms, but it also explicitly stipulates that the following drugs shall not be sold online: (1) vaccines; (2) blood products; (3) narcotic drugs; (4) psychotropic substances; (5) toxic drugs for medical use; (6) radioactive pharmaceuticals; (7) precursor chemicals classified as drugs; (8) other drugs subject to special administration by the State of China.[vi]

Meanwhile, prior to the formal implementation of the Measures for the Administration of Online Sale of Drugs, the National Medical Products Administration also promulgated the List of Drugs Prohibited from Online Sale (First Edition)[vii]. The Prohibited List categorizes drugs into two major types: “drugs explicitly prohibited from sale by policies and regulations” and “other drugs prohibited from retail sale via the internet.” Serving as a supplement to the Measures for the Administration of Online Sale of Drugs, the Prohibited List strengthens the regulation of internet retail drug sales and also safeguards public medication safety.

III. Judicial Practice (Online Sales of Prescription Drugs)

Prescription drugs are typically used for the treatment of specialized diseases. Generally, if taken without a doctor's guidance, they may cause varying degrees of adverse reactions. Therefore, due to the particular nature of prescription drugs, China has been studying whether to permit the sale of prescription drugs on internet platforms and the regulatory measures for such online sales.

The current Measures for the Supervision and Administration of Online Drug Sales explicitly stipulate that enterprises engaged in the sale of prescription drugs must display risk warnings in a conspicuous location, implement a real-name system for drug purchases, and strictly review the relevant prescriptions.

Among the typical cases of public interest litigation concerning drug safety published by the Supreme People's Procuratorate, there are cases involving the illegal sale of prescription drugs on online platforms[viii].

The Beijing Railway Transportation Procuratorate (hereinafter referred to as the "Beijing Railway Procuratorate") discovered during the performance of its duties that, in the process of reviewing electronic prescriptions after receiving online drug purchase orders at certain online platform pharmacies, the licensed pharmacists of those pharmacies failed to review the electronic prescriptions in accordance with relevant legal regulations before proceeding to the offline delivery stage. Such illegal acts included dispensing prescription drugs in excess of the prescribed dosage and failing to sign the prescriptions, which could potentially compromise the medication safety of the public and harm the public interest.

In September 2021, the Beijing Railway Procuratorate decided to initiate an investigation into this case. The public interest litigation prosecution department focused its investigation on pharmacies on online platforms registered in Beijing and pharmacies registered in Beijing on online platforms registered outside Beijing. Through methods such as big data screening, manual review, and collation and analysis, it comprehensively understood the sales situation of online prescription drugs. The investigation revealed that, on three online platforms (including two registered in Beijing), 28 pharmacies registered in Beijing on online platforms had situations where licensed pharmacists failed to perform their duty of reviewing electronic prescriptions in accordance with the law, involving five administrative districts. Regarding the division of regulatory authority and responsibility between municipal and district-level administrative agencies for the online sale of prescription drugs in Beijing, the Beijing Railway Procuratorate held discussions successively with the municipal drug regulatory authority and the drug regulatory authorities of the five districts involved. These discussions clarified that the municipal drug regulatory authority is responsible for supervising the headquarters of drug retail chains and online platforms, while the district drug regulatory authorities are responsible for supervising pharmacies on online platforms, and a consensus was reached on issues such as the specific procedures for pharmacies on online platforms to sell prescription drugs.

In September and November 2021, the Beijing Railway Procuratorate issued procuratorial recommendations to the drug regulatory authorities of the five districts, urging the administrative agencies to investigate and penalize the illegal acts involved in the case, and to strengthen supervision over licensed pharmacists at pharmacies on online platforms in fulfilling their duty to review electronic prescriptions, thereby regulating the conduct of online prescription drug sales.

It can be seen from the above case that the relevant authorities also attach considerable importance to the matter of online prescription drug sales. Although the sale of prescription drugs on internet platforms has been permitted, the regulation thereof remains quite stringent.

IV. Conclusion

As the first departmental regulation specifically governing online drug sales activities, the implementation of the Measures for the Supervision and Administration of Online Drug Sales is of great significance for regulating the sale of drugs on online platforms, ensuring the medication safety of the public, and the development of internet pharmaceutical sales. It also points the way for the compliance of internet drug sales enterprises and internet drug sales platforms. For relevant enterprises and platforms, improving internal supervision within the enterprise and platform and fulfilling related obligations in accordance with the Measures for the Supervision and Administration of Online Drug Sales are essential to ensure sustainable development in the field of online drug sales.

[i]Article 7 of the Measures for the Supervision and Administration of Online Drug Sales

[ii]Article 8, Paragraph 1 of the Measures for the Supervision and Administration of Online Drug Sales

[iii]Article 11 of the Measures for the Supervision and Administration of Online Drug Sales

[iv]Article 18 of the Measures for the Supervision and Administration of Online Drug Sales

[v]Articles 5 and 12 of the Measures for the Administration of Internet Drug Information Services; Article 7 of the Measures for the Administration of Internet Information Services

[vi]Article 8, Paragraph 2 of the Measures for the Supervision and Administration of Online Drug Sales

[vii]Prohibited List for Online Drug Sales (First Edition)

[viii]Typical Cases of Public Interest Litigation on Drug Safety, Case 5