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China: Judicial Interpretation of Criminal Law Provisions on Counterfeit, Substandard Drugs

(July 16, 2009) China's Supreme People's Court and Supreme People's Procuratorate jointly issued an interpretation of two articles of the Criminal Law on May 13, 2009. It entered into force on May 27. The interpretation applies to articles 141 and 142 of the Law, which penalize the production and sale of counterfeit drugs and substandard drugs, respectively. Under these provisions, if the offense results in serious harm to human health, the punishment upon conviction is fixed-term imprisonment of from three to ten years and a fine on the earnings from the drug sales. If death or especially serious harm to human health results from the drugs' production or sale, the punishment is at least ten years' imprisonment, life imprisonment, and a fine on the sales earnings or confiscation of property; in the case of such an offense involving counterfeit drugs, the death penalty may also be imposed. (Criminal Law of the People's Republic of China [English translation of text adopted on July 1, 1979, as amended on Mar. 14, 1997, effective on Oct. 1, 1997], Congressional-Executive Commission on China website, (last visited July 6, 2009); Criminal Law [complete text in Chinese, as amended through Feb. 28, 2009], SHENZHEN CRIMINAL LAW NET, (last visited July 13, 2009).)

The interpretation states that a counterfeit drug produced or sold under any of the following circumstances will be deemed “harmful enough to seriously endanger human health” under article 141. The circumstances are if:

(1) the drug contains any toxic or harmful substance proscribed by national drug standards or exceeding the limit set by the standards;

(2) the drug is a narcotic, psychotropic, or contraceptive drug; a poisonous drug for medical use; a radioactive pharmaceutical; or a blood product or vaccine;

(3) the drug's main users are pregnant women, women who have just given birth, infants, children, or the critically ill;

(4) the drug is a type used for injections or first aid;

(5) the drug is unlicensed or has a forged drug production license, or lacks or has a forged approval number and is a type of prescription drug; or

(6) there are other circumstances sufficient to seriously endanger human health.

(The Two Supreme Judicial Organs Jointly Issue Interpretation for Stringently Penalizing the Offences of Producing or Selling Fake Drugs or Substandard Drugs, 19 iSINOLAW WEEKLY (June 1-June 7, 2009), via [email protected]; Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Regarding the Specific Application of Law in Handling Criminal Cases of Producing or Selling Counterfeit Drugs or Substandard Drugs [in Chinese], Supreme People's Court website, (last visited June 18, 2009).)

The interpretation also defines the terms “causing serious harm to human health” and “particularly serious harm to human health” used in the two articles. The latter means that the counterfeit or substandard drug causes death or severe disability, serious injury to three or more persons, moderate disability or damage to organs and tissues leading to serious dysfunction for three or more persons, minor injury to ten or more persons, minor disability or damage to organs and tissues leading to general dysfunction for five or more persons, or other especially serious conditions harmful to human health. (Id.)

If medical institutions know or should have known that a drug is counterfeit or substandard but still use or sell it, and the drug causes the types of endangerment or harm defined above, they will be investigated for criminal liability for the offense of selling counterfeit or substandard drugs, the interpretation states. In addition, persons who know or should have known that another person is producing or selling counterfeit or substandard drugs “and for such purposes provides funds, loans, account numbers, production and operation sites, production technologies, raw materials and advertisements or any other publicity, shall be convicted of and penalized as a joint offender of producing or selling fake or substandard drugs.” (Id.)

The interpretation also provides that if the crime of producing or selling counterfeit or substandard drugs concurrently constitutes an offense of producing or selling counterfeit or substandard products, infringing intellectual property rights, conducting illegal business operations, engaging in illegal medical practices, or illegally collecting and supplying blood, the offender's punishment upon conviction will be in accordance with Criminal Law provisions prescribing “relatively severe sentences.” During a natural disaster, man-made catastrophe, public health incident, social safety incident, or any other emergency, anyone who produces or sells counterfeit or substandard drugs in response to the emergency will be subject to a heavy punishment according to law. (Id.)