Chapter I General Provisions

Article 1 The Regulations is formulated with a view to improving the quality of all varieties of traditional Chinese medicines (hereinafter referred to as TCM or TCMs), protecting the legitimate rights and interests of manufacturers of traditional Chinese medicines, and promoting the development of traditional Chinese medicines.

Article 2 The Regulations is applicable to all TCM varieties produced within the territory of China, including TCM preparations, the extract and preparation of crude drugs, and processed TCM products.

The Regulations is not applicable to those patent-pending varieties of traditional Chinese medicines which are subject to the provisions of the patent law.

Article 3 The State encourages research and development of TCM varieties with clinical effects, and exercises a tiered protection system of TCM varieties with stable quality and proved curative effects.

Article 4 The health administrative department under the State Council is responsible for the regulation of TCM variety protection nationwide. The competent department at the state level responsible for the production and distribution of TCMs shall assist in the regulation of TCM protection.

Chapter II Classification and Approval of TCM Varieties for Protection

Article 5 All TCM varieties covered by the Regulations for protection must be those listed in national drug standards. For those listed in drug standards of a province, autonomous region or municipality directly under the Central Government, when recognized by the health administrative department under the State Council, an application can also be submitted.

TCM varieties under protection are divided into Grade 1 and Grade 2.

Article 6 A TCM variety meeting any of the following conditions may apply for Grade 1 protection:

(1) With special therapeutic effects on a specific disease;

(2) Equivalent to the processed product of a natural crude drug under Grade 1 State Protection;

(3) Used for the prevention and treatment of a special disease.

Article 7 A TCM variety meeting any of the following conditions may apply for Grade 2 Protection:

(1) Meeting the requirements of Article 6 in the Regulations or being removed from Grade 1 protection;

(2) With significant therapeutic effects on a specific disease;

(3) An active substance extracted from a natural crude drug or a special preparation.

Article 8 New medicines approved by the health administrative department under the State Council are subject to protection for a period of time specified by the department, among which those meeting the requirement of Article 6 or Article 7 in the Regulations, may reapply for protection in accordance with the requirements of the Regulations six months in advance based on the expiry date of the protection period approved by the department.

Article 9 Application procedure for protection of a TCM variety

(1) A TCM manufacturer may submit an application to the competent TCM production and distribution department of the province, autonomous region or municipality directly under the Central Government for a TCM variety produced by the manufacturer that satisfies the requirements of Articles 5 to 8 in the Regulations; the competent department shall forward the application with its opinion to the health administrative department at the same level; and the health administrative department of the province, autonomous region or municipality directly under the Central Government shall report to the health administrative department of the State Council with its opinion after a preliminary review. Under special circumstances, a TCM manufacturer may submit application directly to the competent department of TCM production and distribution under the State Council, which shall transfer the application with its opinion to the health administrative department of the State Council, or directly submit the application to the latter.

(2) Upon the authorization by the health administrative department under the State Council, the National Committee on the Assessment of the Protected Traditional Chinese Medicinal Products shall conduct an evaluation on the TCM variety pending for protection and make a conclusion within six months from the date the application is received.

(3) Based on the conclusion of the National Committee on the Assessment of the Protected Traditional Chinese Medicinal Products，the health administrative department under the State Council shall consult the competent TCM production and distribution department and decide whether or not to grant protection. The health administrative department under the State Council shall issue a Certificate of a Protected Traditional Chinese Medicine Variety.

The health administrative department under the State Council is responsible to organize the National Committee on the Assessment of the Protected Traditional Chinese Medicinal Products by inviting, after consulting with the competent TCM production and distribution department at the State level, TCM experts in areas of medical treatment, scientific research, laboratory testing, distribution and management to serve as members of the Committee.

Article 10 An enterprise applying for protection of a TCM variety shall submit complete dossier to the National Committee on the Assessment of the Protected Traditional Chinese Medicinal Products as required by the health administrative department under the State Council,.

Article 11 The health administrative department under the State Council shall publish on designated professional newspapers and periodicals the traditional Chinese medicine varieties approved for protection and those varieties with their protection period terminated.

Chapter III Protection of the Protected TCM Varieties

Article 12 The protection period for protected TCM varieties:

Grade 1 protection: 30 years, 20 years, or 10 years;

Grade 2 protection: 7 years.

Article 13 The formula and processing technology of a variety under Grade 1 protection shall be kept confidential within the protection period. The enterprises granted with a Certificate of a Protected Traditional Chinese Medicine Variety, the competent drug production and distribution departments, the health administrative departments, and all organizations and individuals concerned shall not make it known to the public.

The concerning department, enterprise or organization with a responsibility of confidentiality shall establish a confidentiality policy as necessary in accordance with the relevant State provisions.

Article 14 Where the formula and processing technology of a TCM variety under Grade 1 protection is to be transferred overseas, it shall be handled in accordance with the State provisions on confidentiality.

Article 15 Where a TCM variety needs an extension of the protection period due to special circumstances, the manufacturer shall apply in accordance with the application procedure as prescribed in Article 9 of the Regulations six months in advance based on the expiry date of the protection period. The extension period shall be determined by the health administrative department on the basis of the evaluation results from the National Committee on the Assessment of the Protected Traditional Chinese Medicinal Products; however, the extension period shall be no longer than the firstly approved protection period.

Article 16 The protection period for varieties of traditional Chinese medicines under Grade 2 protection can be extended for 7 years.

A manufacturer shall apply for an extension of protection period of a TCM variety under Grade 2 protection in accordance with the application procedure as prescribed in Article 9 of the Regulations six months in advance based on the expiry date of the protection period.

Article 17 The production of a TCM variety approved for protection shall be limited to the enterprise which has obtained the Certificate of a Protected Traditional Chinese Medicine Variety within the protection period, unless otherwise specified in Article 19 of the Regulations.

Article 18 Where a protected TCM variety approved by the health administrative department under the State Council, is produced by more than one enterprises before approval, enterprises other than the one which has applied for the Certificate of a Protected Traditional Chinese Medicine shall submit an application to the health administrative department under the State Council within six month from the date the announcement is issued and provide relevant materials in accordance with the requirements of Article 10 in the Regulations. The department shall designate a drug testing institute to conduct quality test on the variety as same as the identical variety. According to the test result, the health administrative department under the State Council may take the following measures:

(1) Where the national drug standard is met, a Certificate of a Protected Traditional Chinese Medicine Variety shall be issued after the consultation with the State competent TCM production and distribution department.

(2) Where the national standard is not met, the approval number of the said TCM product shall be withdrawn in accordance with law and administrative regulations governing drug administration.

Article 19 For a TCM variety in short supply for clinical use, based on modeling proposal from the State competent TCM production and distribution department, the health administrative department of the province, autonomous region or municipality directly under the Central Government, where the modeling enterprise is located, shall issue an approval number to the enterprise producing the same protected variety upon approval by the health administrative department under the State Council. The modeling enterprise shall pay a reasonable user fee to the enterprise holding the Certificate of a Protected Traditional Chinese Medicine Variety and transferring the formula and processing technology，the amount of which shall be fixed by the two parties through consultation. Where the parties fail to reach an agreement, the health administrative department under the State Council shall adjudicate.

Article 20 Manufacturers of protected TCM varieties and the competent TCM production and distribution department shall improve production conditions and variety quality in accordance with requirements of the health administrative department of a province, autonomous region or municipality directly under the Central Government.

Article 21 Where a protected TCM variety, within the protection period, is to apply for registration abroad, an approval must be obtained from the health administrative department under the State Council.

Chapter IV Penalties

Article 22 Where Article 13 of the Regulations is violated, any person accountable for leaking the secret shall be given an administrative sanction by the employing organization or its superior authority. If a crime is constituted, criminal liabilities shall be investigated in accordance with law.

Article 23 Where a manufacturer violates the provisions of Article 17 of the Regulations by modeling a protected TCM variety without authorization, punishment shall be imposed in accordance with law by the health administrative department at the county level or above as it is deemed for production of a counterfeit drug.

Where the Certificate of a Protected Traditional Chinese Medicine Variety or the relevant proof documents are forged for production or sales, the health administrative department at the county level or above shall confiscate all the drugs concerned and illegal gains，and may impose a fine of no more than three times the price of the certified product. Where any of the activities listed above constitute a crime, criminal liabilities shall be investigated by the judicial department.

Article 24 Where a concerning party refuses to accept the decision made by the health administrative department, an administrative reconsideration may be applied or an administrative lawsuit may be filed in accordance with relevant laws and administrative regulations.

Chapter V Supplementary Provisions

Article 25 The application requirements and forms for protection of TCM varieties are formulated by the health administrative department under the State Council.

Article 26 The rights for the interpretation of the Regulations reside in the health administrative department under the State Council.

Article 27 The Regulations shall come into effect as of January 1, 1993.