In January 2026, the State Council promulgated the revised Regulations for the Implementation of the Drug Administration Law of the People's Republic of China (hereinafter referred to as the 'New Regulations'), which will officially come into force on 15 May 2026. As the core supporting administrative regulation to the Drug Administration Law, this revision constitutes the first comprehensive overhaul since the Regulations came into effect in 2002. It focuses on compliance management across the entire lifecycle of pharmaceuticals, elevating years of regulatory practice and reform experience into a formalized legal framework, thereby defining clear boundaries for compliant operation by pharmaceutical enterprises.

I. Compliance of Responsible Parties: Further Improvement of the MAH System Responsibility Structure

The New Regulations place the drug marketing authorization holder (MAH) system at its core, establishing a more stringent compliance framework for responsibility subjects.
In terms of core responsibilities of the MAH, the New Regulations require MAHs to establish a quality assurance system covering the entire lifecycle of pharmaceuticals — including R&D, clinical trials, manufacturing, distribution, and use. Notably, the MAH’s compliance obligations are not transferable even when manufacturing is contracted out. MAHs are required to conduct supplier audits, manage changes in manufacturing processes, and exercise continuous oversight of contract manufacturers, while explicitly prohibiting subcontracting, so as to guard against risks arising from ‘multi-level subcontracting.’

Furthermore, MAHs must establish and improve pharmacovigilance systems, proactively carry out risk identification, assessment, and control, and link post-marketing evaluation obligations directly to re-registration of the product. Failure to fulfil such obligations will result in the severe consequence of non-renewal of registration.

The New Regulations also bring producers of traditional Chinese medicine (TCM) decoction pieces and TCM formula granules into the MAH responsibility system, requiring full-process management and the establishment of traceability systems. Commission manufacturing of these products is expressly prohibited, further tightening compliance responsibilities for TCM producers.

II. Compliance in R&D and Registration: Dual Enhancement of Innovation Incentives and Compliance Norms

Compliance during pharmaceutical R&D and registration lays the foundation for subsequent operation. The New Regulations revise this field by strengthening innovation incentives through mechanisms such as data protection and market exclusivity periods, while defining clear compliance boundaries through procedural rules — with several notable changes.

(1) Data Protection

One of the most prominent highlights of the revision, Article 22 of the New Regulations formally establishes a data protection period system. The new rules stipulate that undisclosed experimental and other data obtained independently by the MAH for pharmaceuticals containing novel chemical entities or other qualifying products shall enjoy a data protection period of up to six years. Within this protection period, no entity may engage in unfair commercial use of such undisclosed data without the MAH’s consent. The core value of this regime lies in its independence — even if the core patent of an originator drug expires or becomes invalid, generic manufacturers cannot obtain marketing authorization by relying on such protected data during the six-year period, thereby affording a dual protection of ‘patent + data’ for innovative achievements.

(2) Market Exclusivity Period

For the first time in Article 21, the New Regulations introduce a market exclusivity protection regime for rare disease drugs and pediatric drugs. Pediatric drugs involving new varieties, new dosage forms, new specifications, or newly added indications for children may be granted a market exclusivity period of up to two years; rare disease drugs may be granted up to seven years of market exclusivity, provided that supply commitments are met.

Unlike the technical exclusivity derived from patents, market exclusivity is an administrative restriction that does not require the existence of patent. It places greater emphasis on incentivizing enterprises to invest in specialized drug areas characterized by high-risk and low-return. For example, modifying an adult formulation into a pediatric dosage form may earn market exclusivity, providing institutional support for the ‘old drug, new use’ R&D path. However, meeting supply commitments is a prerequisite — failure caused by shortages of raw materials, insufficient production capacity, etc., allows regulators to withdraw exclusivity and permit generic entry, underscoring the need for a resilient supply chain compliance system.

(3) Compliance in Clinical Trials and Cross-border R&D

In clinical trial compliance, the New Regulations establish an independent administrative approval channel for changes in sponsors during clinical trials, requiring such changes to be approved by the National Medical Products Administration (NMPA). The State drug regulatory authority must review and decide within 20 working days from acceptance. This revision provides a clear compliance pathway for rights transfers in pharmaceutical commercial transactions and reduces risks arising from approval uncertainty.

In cross-border R&D compliance, Article 10 states that overseas R&D activities intended for registration in China must comply with Chinese laws, regulations, and standards, and recognizes eligible overseas study data for domestic registration purposes.

III. Compliance in Manufacturing and Operation: Balancing Flexible Mechanisms with Strict Supervision

The revisions to pharmaceutical manufacturing and operations focus on practical compliance requirements — introducing flexible mechanisms such as segmented manufacturing and ‘stock before approval’ to stimulate industry vitality, while strengthening risk prevention through regulation of online sales and TCM manufacturing standards.

(1) Compliance in Manufacturing: Implementation of Segmented Production and Stock-before-Approval

The New Regulations formally establish segmented manufacturing, allowing certain innovative drugs or urgently needed medicines with special technical requirements in processes or facilities to be manufactured in segments upon approval, breaking the traditional ‘full-process single-site’ limitation. MAHs must maintain a unified quality assurance system covering all manufacturing sites to ensure ongoing compliance with legal requirements across the entire process.

For vaccines, the New Regulations further refine conditions for segmented production, providing express legal grounds for separate entrusted production of bulk liquid and finished vaccine formulations — institutionalizing previous pilot policies.

Regarding commercial-scale batches, the New Regulations allow products manufactured prior to obtaining marketing approval — and passing the relevant GMP compliance inspection — to be marketed once the approval is granted. For new drugs, rare disease drugs, and shortage drugs urgently needed for clinical use, products may be marketed immediately after passing GMP compliance checks, creating a lawful pathway for ‘stock-before-approval.’

For TCM manufacturing compliance, strict requirements are imposed: commission manufacturing of TCM decoction pieces and formula granules is prohibited; they must be prepared and manufactured in accordance with national or provincial drug standards, and cross-regional sales must be filed with drug regulatory authorities in both regions; labelling must comply with legal requirements, forming a full-process compliance supervision system for TCM.

(2) Compliance in Operations: Legalized Upgrade of Online Sales Regulation

Online sale of medicines is a key area in this revision. The New Regulations elevate the quality management responsibilities of third-party platforms from departmental rules to administrative regulations, significantly increasing enforcement strength. Platforms must establish sound quality management systems for online drug sales, strictly verify the qualifications of MAHs and pharmaceutical business entities applying to sell via the platform, and must not provide illegal information display or link redirection services to other third parties. Violations may incur fines ranging from RMB 100,000 to RMB 2,000,000.

The New Regulations also introduce a negative list for online sales, expressly prohibiting online sale of vaccines, blood products, narcotic drugs, psychotropic drugs, medical toxic drugs, radioactive drugs, and precursor chemicals in the drug category, thereby drawing clear compliance red lines for platforms and enterprises.

Conclusion

The 2026 New Regulations establish a more systematic and precise pharmaceutical compliance management framework, incentivizing enterprises through innovations such as data protection and market exclusivity, while tightening responsibilities across the entire chain and strengthening legal liabilities — achieving a balance between ‘encouraging innovation’ and ‘controlling risks.’
Pharmaceutical companies should make full use of the transitional period before 15 May 2026 to prepare by:

• Aligning internal compliance, quality management, and pharmacovigilance systems with the new rules, and refining operational procedures for newly introduced mechanisms;
• Reviewing key links such as contract manufacturing agreements and online sales operations, and conducting risk self-assessments;
• Strengthening staff training with a focus on MAH responsibilities, segmented production, data protection, and online sales provisions.