Recent Developments in the Regulation of Pharmaceutical Advertisements in China

In China, the year of 2023 witnessed significant developments and changes in pharmaceutical advertising, both in legislative and enforcement realms.

On 29 May 2023, the State Administration for Market Regulation (SAMR) introduced draft amendments to the Interim Administrative Measures for the Review of Advertisements for Drugs, Medical Devices, Health Food, and Formula Food for Special Medical Purposes (the “Interim Measures”). This release marked a pivotal moment, as it consolidated more specific and transparent regulations governing pharmaceutical advertisements. Notably, the amendments address the evolving landscape of advertising, encompassing emerging formats such as live-streaming videos, website links and QR codes. These amendments signify a comprehensive effort to adapt regulatory frameworks to the dynamic nature of pharmaceutical advertising in the contemporary landscape.

Meanwhile, the SAMR emphasised to maintain strict standards related to the enforcement on advertisements for drugs, medical devices and other areas that are of vital importance to livelihood. In light of the representative administrative cases in the area of pharmaceutical advertisements announced by the SAMR, the focal points of the enforcement in 2023 include:

• false advertisements featuring “divine medicine”;
• medical cosmetology advertisements creating anxiety of appearance or illegally publishing toxic medical drugs;
• pharmaceutical advertisements declaring cure rate or effectiveness; and
• releasing pharmaceutical advertisements in a disguised form.

Details of the foregoing developments and changes are set out as follows.

The draft amendments to the Interim Measures

The draft amendments of the Interim Measures are subject to a further round of revision and pending approval of formal promulgation. Nonetheless, the Measures delivered specific messages with regards to potential new changes and developments of the regulations on pharmaceutical advertisements. Furthermore, certain provisions within the draft amendments to the Interim Measures align with practices that have been implemented by authorities in respect of the enforcement of pharmaceutical advertisement regulations.

Rules showing potential new changes and developments in the draft amendments of the Interim Measures

Specific information related to pharmaceutical products to which a pre-launch approval mechanism is proposed to be not applicable

In accordance with Article 25 of the draft amendments to the Interim Measures, if pharmaceutical companies holding registrations of drugs or medical devices need to objectively display or present specific information (including product name, price, label, specification, grade, instructions of use, leaflet, methods of payment and delivery, and post-sales service) in their respective business premises, official social media account, online store, apps and other self-operated platforms, as per mandatory requirements from laws, regulations or national standards, such display or presentation is not subject to the pre-launch approval.

For context, any promotional activity pertaining to pharmaceutical products is classified as an advertisement, subjecting the associated promotional content to pre-screening procedures by the approval authority before formal launch, in accordance with Article 46 of the PRC Advertising Law. Considering the expansive definition of “advertisements” in the PRC Advertising Law, the aforementioned display or presentation of product information may potentially fall within the purview of “advertisements” as defined by the PRC Advertising Law.

In this connection, the proposed inclusion of specific information related to pharmaceutical products, exempt from the pre-launch approval mechanism in the draft amendments to the Interim Measures, presents a potential contradiction with the provisions of the PRC Advertising Law.

However, it is noteworthy that this proposed amendment aligns with the draft amendments to the PRC Anti-unfair Competition Law (released for public consultation on 27 November 2022). Article 9 of the latter specifies that promotional activities, including displaying, demonstrating, stating, explaining, promoting, or annotating goods through various channels such as business premises, exhibition activities, websites, self-operated media, telephone, and brochures, do not fall under the classification of advertisements.

Considering this alignment, if the PRC Anti-unfair Competition Law indeed excludes specific promotional information released on self-operated platforms (including websites) of entities providing the corresponding goods/services, there could be a solid foundation supporting the proposed Article 25.

Specific requirements for audio pharmaceutical advertisements

Article 10 of the draft amendments to the Interim Measures emphasised that audio advertisements (in addition to the other forms of pharmaceutical advertisements, such as video advertisements) should clearly and completely articulate the specific information that is mandatorily required to be delivered conspicuously in the advertisements.

According to Articles 5 and 9 of the draft amendments to the Interim Measures, the information that is required to be marked outstandingly in the drug advertisements include, without limitation, the generic name, contraindications, adverse reactions, and approval number of the advertisement. For prescription drugs, it is required to notably indicate “this advertisement is only for medical and pharmaceutical professionals to read”, while for over-the-counter (OTC) drugs, the advertisements should prominently and clearly contain the “OTC” indicia and the wording: “Please purchase and use according to the drug instructions or under the guidance of a pharmacist”.

When it comes to the advertisements of medical devices, the following information is required to be marked out in an eye-catching method in accordance with Articles 6 and 9 of the draft amendments of the Interim Measures:

• product name;
• approval number of the advertisement; and
• the wording, “Please refer to the instructions for details of contraindications or precautions” (if applicable), and the wording, “Please read the instructions carefully or purchase and use under the guidance of medical personnel” (if the medical device advertisement is targeted at individuals).

Restrictions over the contents of pharmaceutical advertisements

Article 11 of the Interim Measures outlines several scenarios where specific content is prohibited in pharmaceutical advertisements. The draft amendments introduce a new prohibition, barring the content that is beyond the scope of the product instructions. This includes theoretical citations, statements of viewpoints, or content in cited literature, research reports, and experimental evidence.

The forgoing proposed addition of prohibited content, if approved, will significantly impact the regulatory landscape for pharmaceutical advertising.

Under the current legal regime, the contents of pharmaceutical advertisements, which are beyond the scope of the corresponding instructions, typically constitute false advertising. However, a point of contention arises in specific cases where drugs have dual indications approved by, for example, the US Food and Drug Administration (FDA), but only one approved indication in China. The promotion of the unapproved indication in China (while approved in a foreign country) is debatable under the current legal regime. Nevertheless, if the above proposed article is ultimately approved and implemented in China, the foregoing promotional activity would unequivocally be considered as a violation of the applicable law.

Potential restrictions over pharmaceutical advertisements involving minors

Following the above restriction, Article 11 of the draft amendments to the Interim Measures also provides the prohibition of content involving minors. As per the provision, pharmaceutical advertisements would be barred from publishing in mass media targeting minors.

The above proposed prohibition, if eventually approved and implemented, would further restrict the channels where pharmaceutical advertisements are released or launched (ie, any introduction or promotion of pharmaceutical products to minors is not permissible), imposing stricter requirements on the carriers and channels of the circulation of pharmaceutical advertisements.

Fixed validity term for advertisement approval

Article 20 of the draft amendments to the Interim Measures introduces a fixed validity term for pharmaceutical advertisement approval, specifically set at two years. This replaces the current approach, which varies based on the existence of a valid term in product registration scenarios.

Under existing rules, if promoted pharmaceutical products have a registered term of effectiveness, the advertisement approval’s validity aligns with that registration term. Otherwise, the advertisement approval’s validity defaults to two years. The proposed provision of a fixed term, if approved, would simplify the calculation of advertisement approval validity, bringing a more straightforward approach to regulatory compliance.

Rules reflecting and enhancing practices in the draft amendments to the Interim Measures

In addition to the aforesaid provisions introducing contemplated new rules in respect of pharmaceutical advertisements, it is worth noting that there are also rules in the draft amendments to the Interim Measures reflecting and enhancing existing practices, as well as providing clearer guidance on practices, as illustrated below.

Potential prohibitions of pharmaceutical advertisements in disguised forms

Article 13 of the draft amendments to the Interim Measures explicitly prohibits promotional activities related to pharmaceutical products in disguised forms, such as, disseminating health knowledge through live-streaming videos or engaging endorsers to recommend or authenticate pharmaceutical products in live-streaming sessions.

With the surge in popularity of live-streaming sales and promotions in China in recent years, authorities have heightened their scrutiny on advertisements or promotional information delivered through live-streaming videos. The above proposed provision, if approved, would explicitly categorise releasing promotional information of pharmaceutical products in disguised forms through live-streaming as advertising. Consequently, such activities may be prohibited if the advertisements have not received prior approval from the relevant regulatory authority.

Potential requirements for content directed by a QR code or link contained in pharmaceutical advertisements

As stipulated in Article 27 of the draft amendments of the Interim Measures, the advertiser should be responsible for the content which would be provided to consumers through scanning a QR code or clicking links contained in its advertisements, and such linked content, if it falls within the scope of pharmaceutical advertisements, is also subject to the pre-launch approval mechanism in respect of pharmaceutical advertisements.

This proposed rule actually reflects the current practices – ie, for any promotional content of pharmaceutical products that could be viewed or accessed by consumers eventually through a QR code or links, such content may likely constitute advertisements in the view of the authority, thus should undergo the regulatory proceedings imposed on pharmaceutical advertisements. Any approach to evade the pre-launch approval mechanism is currently not allowed.

The focuses of enforcement regarding pharmaceutical advertisements in 2023

As mentioned in the opening section, specific categories of pharmaceutical advertisements were taken to be the primary targets for administrative punishment, in accordance with the representative cases released by the SAMR in 2023.

False advertisements featuring “divine medicine”

Advertisements containing exaggerated or misleading functional claims, involving disease treatment and proclaiming “divine medicine”, are subject to administrative penalisation.

For example, the Administration for Market Regulation (AMR) in Xinjin District, Chengdu City, penalised a company with an administrative fine of CNY550,000 for its false advertisement of cosmetics and disinfection products claiming disease-treatment functions, including the allegation for “effective treatment and prevention of malignant skin diseases such as acne, cowhide moss allergy, etc.”

The AMR in Jing’an District, Shanghai City, imposed an administrative fine of CNY100,000 on a company that released advertisements for its health product while claiming that such product had unique effects on cancer treatment and could strengthen the immune system, etc.

Moreover, the AMR in Haidian District, Beijing City, imposed a heavy and significant fine of CNY5,285,500 on a company that indicated “health foods are not drugs and cannot replace drugs in treating diseases” in its advertisement of ordinary food products, misleading consumers to take its food products as health food products.

Significantly, the regulatory authority has placed increased emphasis on misleading verbiage or functional claims that create a false impression for consumers regarding promoted goods being medicines or health foods. This heightened focus is accompanied by a tendency towards higher fines for such violations.

Medical cosmetology advertisements creating anxiety of appearance or illegally publishing toxic medical drugs

It is evident from recent practices that the enforcement authority places considerable emphasis on medical cosmetology advertisements, which are susceptible to penalties due to the meticulous and stringent details provided in the Guidelines for the Enforcement of Medical Cosmetology Advertising (issued by the SAMR on 2 November 2021).

An illustrative example involves the AMR in Chaoyang District, Beijing City, imposing administrative fines of CNY200,000 and CNY300,000 on two companies, respectively, for incorporating illegal content, including, but not limited to, botulin toxin in their medical cosmetology advertisements.

Furthermore, in separate instances, the AMR in Tianjin City and the AMR in Yulin City penalised two companies each. The violations included promoting the notion that a pleasing appearance significantly influences employment and career development, or making negative comments about so-called “ugliness”, alongside other illicit content.

Pharmaceutical advertisements declaring cure rate or effectiveness

While Article 16 of the PRC Advertising Law has clearly stipulated that any declaration or claim relating to cure rate or effectiveness is prohibited in respect of pharmaceutical advertisements, violations were still observed and announced as part of the representative cases in 2023.

In administrative cases across Hebei, Henan and Gaungdong provinces, wording including percentages of cure rate or general statements such as “could recover and be cured completely” were considered as violations of the above provision. Administrative fines ranging from CNY100,000 to CNY500,000 were imposed by the respective authorities.

Releasing pharmaceutical advertisements in a disguised form

The newly emerging channels and forms for advertising have also aroused the authorities’ awareness with respect to enforcement on pharmaceutical advertisements, in addition to the amendments from a legislative perspective.

For example, promoting functional claims, without factual basis, for a skin-targeted beauty device through a live-steaming show, together with other illicit conduct, were penalised by the AMR in Gulou District, Nanjing City, with an administrative fine of CNY224,600.

Additionally, promotion and sales of products through a WeChat Mini Program functioning as a tool of community group purchase are considered as advertisements, and any illegal content related to pharmaceutical products therein would be penalised by the authority. The AMR in Haining City imposed an administrative fine of CNY125,000 for the violations in the above scenario.

Advertisements published in a disguised form such as in a TV programme for circulation of health knowledge, or through the cross-border e-commerce platform, were subject to the advertising regulation. AMRs in Sichuan and Jiangsu provinces have enforced the advertising laws against entities releasing pharmaceutical advertisements in the above scenarios respectively.

Conclusion

To conclude, the past year witnessed significant developments from legislative and enforcement perspectives concerning pharmaceutical advertisements. These changes, aligned with amendments in advertising-related laws and law enforcement practices, have had profound impacts on the regulatory landscape for pharmaceutical advertisements.

For pharmaceutical companies and pertinent advertising publishers, taking the initiative and implementing internal compliance protocols is crucial. Regular reviews to ensure that advertisements comply with the updated and applicable PRC laws and rules are essential in navigating the evolving regulatory environment.