A cure for COVID-19? – Don’t make the claim unless it is true.

COVID-19 Specific Advertising Rules

On 6 February 2020, the “Supreme Court, Supreme Protectorate, Ministry of Public Security and Ministry of Justice's Opinions on Punishing the Crimes Hindering the Prevention and Control of COVID-19” were published. This document outlined that, during the epidemic period, anyone making an advertisement that deceives people due to a serious false representation related to the prevention or control of COVID-19, may be punished for the crime of ‘false advertising’ in accordance with Article 222 of the PRC Criminal Law. Further, the "Guiding Opinions of the State Administration of Market Regulation (SAMR) on Regulating the Discretion of Administrative Penalties in Market Supervision", makes it clear that the most severe administrative penalties available under the law should be given for anyone found to have committed illegal acts during “natural disasters, public health or social security incidents”. While these rules are at the national level, local administrations of market regulation have also enacted local measures that reinforce the advertising rules for drugs and medical devices during the COVID-19 period.

Existing Medical Product Advertising Rules

In addition to the specific rules introduced during this COVID-19 pandemic, medical product advertising in China has already been under scrutiny in recent years leading to the announcement on 17 September 2019 by the Supreme Protectorate, the SAMR and the National Medical Product Administration (NMPA) that advertising related to the safety of drugs would be under stricter scrutiny during a specific campaign running from September 2019 to December 2020. A further joint announcement on “False and Illegal Advertising” released on 18 March 2020 by 11 national authorities (including SAMR, NMPA) highlighted medical product advertising as a key area of regulation.

In line with these announcements, on 1 March 2020 the SAMR’s “Interim Measures for Advertisement Review Administration of Drugs, Medical Devices, Health Food and Formula Food for Special Medical Purposes" ("Interim Measures") came into effect. The Interim Measures operate in accordance with the Advertising Law of the PRC ("Advertising Law") which was amended in April 2015 (with effect from September 2015) to specifically include provisions for the advertising of drugs and medical devices.

The new Interim Measures consolidate a number of previous measures and standards for advertising drugs and medical devices into the one document and also provide more clarity on the requirements. As both the Interim Measures and the Advertising Law reinforce key principles relating to the advertisement of medical products, they are worth reviewing again during this pandemic.

Requirements under the Advertising Laws

To start, the definition of advertising in the Advertising Law is broad and includes all commercial advertising activities for products or services. Further, an advertisement for any drug or medical device is required to be reviewed and approved by the relevant government review authority prior to publication. There are also specific requirements for the content of medical product advertisements. For example, prescription drugs can only be advertised in medical and pharmaceutical professional journals that have been jointly designated by the health administrative department and the medical products administration under the State Council. In addition, all drug products (OTC and prescription) must clearly list their contraindications and adverse effects. All advertisements must also clearly state their approval number.
While there are a number of other requirements stated in the Interim Measures and the Advertising Law, the key provisions are set out in Article 16 of the Advertising Law. Article 16 expressly bans the use of the following information in advertisements for drugs or medical devices:

• Any assertion or guarantee for efficacy and safety
  
  
• Any statement on cure rate or effective rate
  
  
• Comparison with the efficacy and safety of other drugs or medical devices
  
  
• Use of the advertisement endorsers to make endorsements or testimonials
  
  
• Other items as prohibited by laws and administrative regulations

Advertisement Review Procedure

Given that all advertisements for medical products require approval, the Interim Measures have provided clarity of this process. For approval, an Advertising Review Form must be completed and submitted with a sample of the advertisement, the business certificates of the applicant and the product together with relevant supporting materials. Although the application may be submitted in person at the relevant local authority, the government is encouraging submission by letter/fax/email or preferably through the E-Government platform.

The relevant authority for submission and review is the provincial level administration for market regulation or medical products administration in the place where the manufacturer or import agent is located.

The government has committed to determining acceptance within 5 working days and then completing their review within 10 working days if the application is accepted. Once approved, and issued with an approval number, the advertisement is approved until expiry of the product’s registration/record certificate or production licence (whichever date is earlier), or it will be approved for two years if there is no valid period specified on such certificate or licence. Once approved, no changes can be made to the advertisement.

Penalties for Violation of the Laws

The Interim Measures and the Advertising Law stipulate punishments for medical product advertising violations. In addition, the Anti-Unfair Competition Law (AUCL) also carries penalties for false or misleading business publicity and the Criminal Law is also potentially involved. As alluded to above, during this current period, companies that breach the law in relation to medical products and COVID-19 should expect to suffer the more severe end of the punishment regime.

For example, it is an offence to publish an advertisement for a drug or medical device that does not have approval (either not approved, expired approval or modified from the approved version). Depending on the severity of the violation, the punishment for the advertiser can include (according to Article 58 of the Advertising Law), fines from one to five times the advertising fees or, CNY100,000 or up to CNY1 million for more serious offences (which may also include revocation of the business licence). In addition, the advertisement's approval may be cancelled and the advertiser (manufacturer or import agent, etc.) may also be banned from submitting advertisements for review for a year.
A more significant issue is if an advertisement is deemed to constitute false advertising and if proven, administrative fines of up to CNY2 million, depending on severity, can be imposed. There are also potential criminal liabilities if the act is considered significantly severe.

Recent Punishments

Flouting the above advertising related laws in China can lead to serious sanctions, which are no more obvious than in the current COVID-19 pandemic. Local administrations have been swift to punish companies falsely advertising products said to protect against or treat COVID-19 infections. In one case, a Hebei based biotechnology company was fined CNY1 million because it advertised its product as "anti-COVID-19" and "the products kill harmful bacteria in the body and fight COVID-19" via WeChat which cannot be proved to be true. A second example was from a Tianjin pharmacy that was fined CNY2 million for misleadingly advertising an “Antiviral Pill” and another capsule as “anti-COVID-19”. In this second case, the penalty was brought under the false publicity provisions in the AUCL. There are also further examples to demonstrate the seriousness of breaching the existing laws, such as a Shanghai pharmaceutical company fined CNY700,000 for using an influencer to promote a prescription drug and using forbidden content in 2018 and a Chongqing company fined CNY900,000 in 2019 for publishing an unapproved and illegal drug advertisement on a famous Chinese stand-up comedy show.

While these initial fines for COVID-19 products were in the early months of the pandemic, the Chinese Government has continued to be active in penalising companies for the false advertising of products claiming to prevent or cure COVID-19. As examples, on 3 June 2020, Shanghai Administration for Market Regulation (“AMR”) published 8 penalty cases relating to false claims associated with COVID-19 treatments. These cases ranged from a beauty salon company fined RMB 500,000 for promoting an inhouse manufactured “essence” that could prevent infection in the lungs, a RMB 200,000 fine for a company selling non-medical safety goggles as “recommended for medical use via an online marketplace and a company fined RMB 200,000 promoting its masks as KN95 masks qualified to the GB 2626-2006 Chinese Standard without any proof via its WeChat public account.

Conclusion

The worldwide COVID-19 pandemic focuses scrutiny on the advertising of medical products and their potential benefits in combatting and treating the disease. With the specific COVID-19 measures, and the existing advertising laws in place, pharmaceutical and medical device companies must ensure that their products do not fall foul of the COVID-19 measures and that they comply with the legal and regulatory regime for advertisements and labelling in China.