28 August 2017

Falsifying Drug Regulatory Submission May Be a Criminal Offence in China

The Chinese authority has always made the effort to limit substandard drugs being approved using falsified clinical and non-clinical data.  This is the latest effort on that path.  On August 14, 2017, the Supreme People's Court and the Supreme People's Procuratorate jointly issued the Interpretations of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Falsification of the Materials Required for Registering Drugs or Medical Devices (the “Judicial Interpretations”), effective as of September 1, 2017.

According to the Judicial Interpretations, implicated people of non--clinical research institutions, clinical research institutions or contracted research organizations who intentionally provide false research or clinical trial reports for drug registration, shall be liable for the crime of “deliberately providing false documents” under Article 229 of the Criminal Law.  Implicated people of drug registration applicants (i.e., pharmaceutical companies) who “direct” such institutions to provide false documents shall be jointly liable for the same crime.  The act of “directing” is presumed if the “Implicated People” of pharmaceutical companies know these institutions are incapable of conducting the relevant research, or pay well above/below the fair market value for the research projects.  The Judicial Interpretations also list a number of “serious circumstances” in which implicated people can be punished by up to five years’ imprisonment.  Such circumstances include, (a) intentionally using false test drugs in non-clinical drug research or clinical drug trials, (b) concealing serious adverse events in relation to test drugs in clinical trials, (c) intentionally destroying non-clinical research or clinical trial raw data, (d) fabricating non-clinical research or raw clinical trial data such as trial animal/subject information, main test records, and research data or test data, to the extent that it affects the evaluation of drug safety and effectiveness, (e) repeated offenses, and (f) other serious circumstances.  If the implicated people also solicit or receive money in relation to document falsification, they can be punished by up to ten years’ imprisonment and/or be held criminally liable for bribery.  Any government official who abuses his power, or neglects his duty to the extent that drugs with falsified documentations are registered and subsequently cause substantial damages to the public, shall be liable for the crime of “abuse of power” or “dereliction of duty” under Article 397 of the Criminal Law.

The Judicial Interpretations also provide that this rule is applicable to the registration of medical devices.

The Judicial Interpretations further clarify that implicated people of drug registration applicants can be held liable for the crime of the “manufacture or sale of fake drugs” under Article 141 of the Criminal Law, if they intentionally use falsified documents to obtain drug licenses and use such licenses to manufacture and sell drugs.

We believe this Judicial Interpretation will help reduce falsified drug registration documents.  Since drug registration dossier can be a great of source of evidence for pharmaceutical patent infringement cases (especially for enforcing process and formulation patents), this Judicial Interpretation may make the pharmaceutical patent enforcement a little easier.

David Shen +852 2974 6938 / +86 21 2036 7000
Head of the China IP Practice, Hong Kong / Shanghai david.shen@allenovery.com
Dylan Ding +86 10 6535 4378
Associate, Beijing dylan.ding@allenovery.com
Sen Liang +86 10 6535 4309
Associate, Beijing sen.liang@allenovery.com

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