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Operation “Shining Sword” Again Strikes at In November 2010, the Ministry of Public Security launched Operation “Shining Sword” against counterfeit or inferior pharmaceutical and other health products. Through July 2011, the Public Security Departments together with other authorities such as local FDAs successfully cracked more than 850 drug related criminal cases, 2400 food related criminal cases and thousands of IP infringement cases, and shut down more than 100 counterfeit production sites across the country which were producing fake VIAGRA, CIALIS and other famous brands of pharmaceutical products worth hundreds of millions of Renminbi. In September 2011, the Ministry of Public Security launched another round of Operation “Shining Sword” in cooperation with the FDA and the Ministry of Health. This round will last for three months until the end of 2011. The Ministry of Public Security also held a nationwide conference to launch the “Cracking Down on Four Blacks and Removing Four Harms” (打四黑除四害) action.1 In Shanghai, the local FDA and Public Security Department in September inspected 183 shops and seized 33 different kinds of fake or inferior pharmaceutical products, including fake CIALIS, VIAGRA and OTC drugs. Two large illegal production sites were also raided.
Hong Kong
The central government’s Essential Drug System requires primary healthcare facilities to stock and consume only essential drugs. Many such facilities, and drug manufacturers, have complained about this rigid requirement, which has led to the facilities losing revenues, patients and experienced physicians. Provincial governments are now allowing more The Shandong, Zhejiang and Jiangsu governments have allowed some use of non-essential drugs in primary medical institutions. Jiangsu Shanghai
even delegated the power to allow such use to county level governments. 1 The “Four Blacks” and “Four Harms” are: black (i.e. illegal) workshops, black factories, black markets, black dens; harming people, harming families, harming society and harming the country (黑作坊、黑工厂、黑市场、黑窝点、害百姓、害家庭、害社会、害 Beijing never restricted the use of non-essential drugs in primary healthcare facilities.
Anhui province, which first introduced the essential drug system in China, recently allowed township health centers to stock and use up to 15% non-essential drugs on the basic medical insurance drug reimbursement lists, besides national and provincial supplemental essential drugs, but Michelle Gon
essential drugs consumed should still be at least 70% of the total by value.
Under increasing pressure, the central Ministry of Health is not strictly enforcing this requirement to use only essential drugs, and the central Tracy Wut
government is likely to reconsider it. It could possibly adopt an Anhui- style approach, with essential drugs required to be at least a certain proportion by value of total drug consumption. Primary healthcare Clement Ngai
facilities’ sales of non-essential drugs are in any case still subject to the Foreign-owned pharmaceutical companies, who are affected at least Isabella Liu
indirectly by both essential drug requirements and the zero drug sales margin policy, should continue to monitor developments at both the local This Update has been prepared for clients and professional associates of Baker & McKenzie. Whilst every effort has been made to ensure accuracy, this Update is not an exhaustive treatment of the area of law discussed and no responsibility for any loss occasioned to any person acting or refraining from action as a result of material in this Update is accepted by Baker & McKenzie. If advice concerning individual problems or other expert assistance is required, the services of a competent professional adviser should be sought.
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