In order to further standardize the discretionary power of administrative penalties and enhance the fairness and scientificity of regulatory enforcement, the Guangdong Provincial Drug Administration recently issued the "Implementation Rules for the Application of Administrative Penalty Discretionary Rules for Drug Supervision and Administration of Guangdong Provincial Drug Administration" (hereinafter referred to as the "Implementation Rules"), to ensure that law enforcement is based on evidence and discretion, and to effectively safeguard the legitimate rights and interests of enterprises and the public.

Guangdong has listed biopharmaceuticals and health as one of the top ten strategic pillar industries for vigorous development, anchored the goal of an industrial cluster size exceeding one trillion yuan, and fully promoted the high-end development of the biopharmaceutical industry. As of the end of December 2024, there were a total of 8876 pharmaceutical, medical device, and cosmetics production enterprises in Guangdong Province, ranking first in the country. In 2024, a total of 19 innovative drugs and 14 innovative medical devices were approved in Guangdong Province, with year-on-year growth of 73% and 56% respectively.

With the rapid development of the industry, regulatory pressure continues to increase. In 2024, Guangdong Province investigated and handled a total of 10524 cases of "two products and one equipment", involving goods worth 1.756 billion yuan, confiscated 251 million yuan, and punished 49 people. The release of the "Implementation Rules" is not only a positive response to the legal requirements of national drug regulation, but also a powerful measure for Guangdong to safeguard the development of the industry with the rule of law. By refining the standards for administrative penalty discretion, the Implementation Rules provide clear basis for law enforcement, making supervision more fair and transparent, and laying a solid institutional foundation for the high-quality development of the biopharmaceutical industry.

Release detailed rules to provide a unified 'ruler' for law enforcement

As a refinement and supplement to the "Administrative Penalty Discretionary Application Rules for Drug Supervision and Administration" (hereinafter referred to as the "Rules"), the "Implementation Rules" quantitatively stipulate some provisions based on the actual law enforcement situation in Guangdong, ensuring the rationality, standardization, and operability of administrative penalties.

The main text of the "Implementation Rules" consists of 20 articles, with two main parts. The first part is based on Article 8 of the "Rules" and provides specific provisions for various factors in combination with law enforcement reality; The second part provides a detailed list and explanation of situations that are lenient, mitigated, aggravated, and have serious circumstances. The fourth and fifth articles stipulate the comprehensive consideration of discretionary factors, while the sixth to tenth articles are a refinement of the third article, focusing on the discretionary factors, their recognition criteria, and relevant levels; Articles 11 to 14, on the basis of the "Rules", clarify and add specific circumstances that can be mitigated, mitigated, aggravated, or have serious circumstances in accordance with the law; Article 15 to Article 19 stipulate the calculation method and punishment procedure for reducing punishment, and authorize the formulation of specific standards such as duration, clarifying the procedures for reducing punishment and the connection between the old and new systems. The benchmark document is attached to the "Implementation Rules".

Among them, Article 4 of the Implementation Rules clearly states that when exercising administrative penalty discretion, the principles of lawful discretion, due process, proportionate punishment, fairness and justice, and the combination of punishment and education should be adhered to. Based on factors such as the facts, nature, circumstances, degree of social harm, and subjective and objective situation of the parties involved, combined with the local economic and social development status, high-quality development of the pharmaceutical industry, and the need for drug safety risk prevention and control, comprehensive discretion should be made on the case.

Article 5 of the Implementation Rules states that when exercising administrative penalty discretion, the following circumstances should be comprehensively considered based on the specific circumstances of the case: the age, intelligence, and mental health status of the parties involved; The degree of subjective fault of the parties involved; The frequency, region, scope, and time of illegal activities; The risk of the products involved in the case.

For a long time, due to the relatively vague regulations, there have been issues such as "inconsistent discretion scales" in the field of administrative penalties. The newly released "Implementation Rules" not only enhance the transparency and fairness of law enforcement by refining standards and quantifying punishment situations, but also reduce the problem of excessive discretion and provide a more accurate "ruler" for administrative supervision.

For biopharmaceutical companies, clear discretion rules mean more stable policy expectations and a predictable compliance environment. As an important battlefield for global biopharmaceutical innovation, Guangdong's initiative sends a positive signal to domestic and foreign capital and technology, which helps promote the upgrading and international development of the biopharmaceutical industry.

Refining discretion, precise law enforcement, promoting regulatory fairness

The scope of administrative law enforcement work is extensive, with one end connected to the government and the other end connected to the masses, directly related to the trust of the masses in the party and government, and their confidence in the rule of law. The "Implementation Rules" released by Guangdong this time reflect the regulatory orientation of "inclusiveness and prudence". While strictly guarding the safety bottom line, it strives to improve the standardization and accuracy of law enforcement, and create a more transparent and fair legal environment for market entities.

In the past, there was a certain degree of ambiguity in the "presumption of fault" in the regulatory system. The Implementation Rules provide a more detailed classification of the degree of subjective fault of the parties, including no subjective fault, subjective negligence, and subjective intention, in order to improve the scientificity and fairness of law enforcement.

Specifically, if the parties have fulfilled their reasonable duty of care and legal obligations, and the illegal act still occurs, it shall be deemed that there is no subjective fault, which can be considered as a factor for non punishment.

For subjective negligence, the Implementation Rules define it as "knowing or should have known that one should fulfill their legal obligations but failing to do so", including but not limited to drug retail enterprises not storing drugs according to storage requirements, and medical device operating enterprises not requesting registration and filing materials when purchasing medical devices.

The determination of subjective intent voluntarily implemented by the parties for the purpose of profit or avoiding losses, including but not limited to evading or resisting supervision and inspection, transferring, concealing, and destroying records of the sales and inventory of the products involved, and purchasing drugs with prices significantly lower than market prices through illegal channels.

In addition to defining subjective fault, the Implementation Rules also clearly distinguish the conditions for the application of "mitigated punishment" and "lenient punishment".

According to the official interpretation, the current laws and regulations do not make a specific distinction between mitigating and mitigating situations. Both the Administrative Penalty Law of the People's Republic of China and the Rules use the term "mitigating or mitigating" to describe the situation. However, in practice, these two levels of discretion are completely different, especially mitigating. When applied, it is even possible to choose a lighter type of punishment beyond the prescribed ones, which has a completely different impact on the legitimate rights and interests of the parties involved. The "Implementation Rules" further refine the requirements of the "Rules", listing separately the situations that can be mitigated and mitigated, and according to the inherent logical relationship between mitigation and mitigation, formulating the formula of "mitigating situations that have two or more relevant provisions of this Implementation Rules", connecting the applicable situations between the two, so that both mitigating and mitigating situations have legal basis.

The promulgation of the "Implementation Rules" not only effectively prevents the abuse of discretionary power by clarifying the standards of discretion and optimizing the rules of punishment, but also reduces the occurrence of "different punishments for the same case". The Guangdong Provincial Drug Administration promotes "big changes" through "small incisions", enhances the compliance awareness of enterprises, and provides clearer guidance for the standardized development of the industry, promoting fair and unified drug supervision. In the increasingly fierce global competition in the biopharmaceutical industry, such reforms are not only beneficial for Guangdong to build a world-class biopharmaceutical industry cluster, but also provide valuable "Guangdong experience" for the modernization of national drug regulation.

Strengthen the security defense line and build a trillion level industrial cluster

Drug safety is a major concern for people's livelihoods and the cornerstone of consumer confidence. The Implementation Rules focus on key issues and key links, strictly regulate the fields of drugs, medical devices, cosmetics, etc., and rigorously investigate, prevent, and control quality and safety risks.

From an industry perspective, the new regulations refine the classification and discretion standards for drugs, medical devices, and cosmetics through the "Attachment Benchmark Document", reflecting precise regulatory thinking. For example, the administrative penalty discretion benchmark for medical devices focuses on key illegal behaviors, high-risk products, punishment clauses with greater discretion, and subjective and objective factors of illegal behavior. For 13 types of illegal behaviors, 43 corresponding situations are listed from three aspects: mitigation, leniency, and severity.

In recent years, the development momentum of Guangdong's biopharmaceutical industry has been strong, with the market size continuously expanding and the regulatory model keeping pace with the times. This not only safeguards the healthy development of the biopharmaceutical industry, but also provides institutional guarantees for attracting global capital and technology.

Data shows that in 2024, Guangdong Province will have a total of 179 key investment projects in the field of biomedicine, expected to attract a total new investment of 127.1 billion yuan. Among them, the actual completed investment in 2024 will be 13.4 billion yuan, exceeding the original plan by 4%. Currently, 71 projects have been completed, tested, or put into operation. Out of the 102 well-known domestic and foreign pharmaceutical companies planned to attract, 56 have established regional headquarters or functional bases for research and development and production within the province.

Governance is the best business environment, and safety is the strongest driving force for consumption. The release of the "Implementation Rules" this time is not only a deepening practice of Guangdong's national "streamlining administration, delegating powers, and improving services" reform, but also an important measure to safeguard the leap of the biopharmaceutical industry through institutional innovation. From strict regulation to precise law enforcement, from industry protection to consumer confidence enhancement, Guangdong is using deterministic rules to hedge market uncertainty and leverage new space for industry development through regulatory modernization.

Anchoring the goal of "the scale of the biopharmaceutical and health industry cluster exceeding one trillion yuan", Guangdong continuously introduces supportive policies to gather advantageous resources of the biopharmaceutical industry in the Guangdong Hong Kong Macao Greater Bay Area, strengthen innovation collaboration, and promote high-quality development of the biopharmaceutical industry. Looking ahead to 2025, the Guangdong Provincial Drug Administration will focus on the overall development of the province, further improve the legal, international, and humanized regulatory ecology, and help the biopharmaceutical industry move towards a higher level.

Content source: Yangcheng Evening News