China Compliance Update: Life Sciences — Summer 2025
This Advisory summarizes developments in the compliance environment for life sciences companies in China in the first half of 2025, following significant developments from 2024.
1. Compliance Guidelines for the Healthcare Industry
On January 14, 2025, the State Administration for Market Regulation (SAMR, 国家市场监督管理总局) published the Compliance Guidelines for Healthcare Companies to Prevent Commercial Bribery Risks (Compliance Guidelines, 医药企业防范商业贿赂风险合规指引). The Compliance Guidelines compile the mainstream interpretation of China’s anti-corruption regulatory framework, similar to the Foreign Corrupt Practices Act Resource Guide published by the U.S. Department of Justice and the U.S. Securities and Exchange Commission.
2. Enforcement Focus for 2025
On May 13, 2025, 14 Chinese government agencies1 jointly published the Notice on Promulgation of the Key Points for Rectifying Misconduct in the Field of Pharmaceutical Purchase and Sales and Medical Services in 2025 (The 2025 Notice, 关于印发2025年纠正医药购销领域和医疗服务中不正之风工作要点的通知), highlighting the focus areas for regulatory enforcement in the healthcare industry for the coming year.
The 2025 Notice emphasizes building upon and consolidating prior years’ developments in healthcare compliance. It notes that in 2025, regulators will continue to focus on the sale and distribution of medical products (i.e., medical devices and pharmaceuticals) and misconduct relating to medical services. Regulators will also target key personnel with authority in critical areas such as public procurement and bidding, prescriptions, and project review and funding. Enforcement will also be tightened in high-risk areas such as genetic testing, protection of patient information, online medical services, and China’s state-run medical insurance. Regulators will also strengthen government audits of the healthcare sector and refine the “social credit” evaluation system for healthcare companies. The 2025 Notice also encourages healthcare companies to utilize the Compliance Guidelines.
Unlike the 2024 Notice, the 2025 Notice does not mention service fees or speaker fees paid to public healthcare professionals (HCPs), but generally notes that HCPs should comply with anti-corruption requirements. This change may be a positive sign that the strict restrictions imposed in recent years on public HCPs’ ability to work with life sciences companies may be loosening.
3. Updates to the Social Credit Evaluation System for Public Procurement
On May 20, 2025, the National Healthcare Security Administration (NHSA, 国家医疗保障局) published the Notice on Further Refining the Drug Pricing and Procurement Credit Evaluation System (2025 Credit Evaluation Notice, 国家医疗保障局办公室关于进一步完善医药价格和招采信用评价制度的通知).
The current credit evaluation system was established in 2020 and refined in 2023. Companies with “dishonest practices” (失信行为), namely misconduct such as bribery and antitrust violations, will receive negative credit evaluations and face punishment, up to and including debarment from public procurement, a particularly serious measure in a country such as China, where the healthcare system is largely state-run. According to the NHSA, from September 2021 to April 2025, a total of 734 companies received negative credit evaluation results ranging from “Average” to “Extremely Serious.”
The 2025 Credit Evaluation Notice makes revisions to the credit evaluation criteria and process that will be implemented in Q3 2025. These revisions are reflected in three documents published with the 2025 Credit Evaluation Notice and summarized below:
| Document | Highlights |
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Catalog of Dishonest Practices 医药价格和招采失信事项目录清单 |
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| Discretionary Criteria of Dishonest Practices 医药价格和招采信用评价的裁量基准 |
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| Operation Standards of Credit Evaluation 医药价格和招采信用评价的操作规范 |
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4. Final Whistleblower Regulations Published
On May 29, 2025, three government agencies jointly published the Notice on Rewarding Internal Whistleblowers for Reporting on the Quality and Safety Issues of Drugs and Medical Devices (Whistleblower Notice, 关于对药品医疗器械质量安全内部举报人举报实施奖励的公告), the final version of a draft published for comment in October 2024.
This program aims to reward whistleblowers who report significant quality and safety issues relating to drugs and medical devices. The final Whistleblower Notice has a narrower scope than the earlier draft. Under the final Whistleblower Notice, the reward program will only apply to individuals who file complaints under their real names and who are (1) company employees, or (2) “related informants,” a term that includes former employees who terminated their employment contracts within one year of reporting misconduct, vendors who work with companies on safety and quality issues, and temporary contractors engaged by companies. Media personnel and individuals or entities that were significantly engaged in the reported misconduct are not eligible to receive whistleblower awards.
The Whistleblower Notice also refines the process of investigating the alleged misconduct and providing rewards. The Notice allows rewards to be provided when allegations are verified and before penalties are imposed, expediting the provision of rewards and further incentivizing potential whistleblowers. It also introduces “joint credit disciplinary measures” targeting whistleblowers who falsify materials or commit fraud to avoid abuse of the reward program. The Whistleblower Notice also adds a requirement that any government investigation resulting from the whistleblower’s report should be “necessary” and targeted, to balance between the need to investigate the reported misconduct and the legitimate business operations of the companies that are the subject of the reports.
5. Additional Compliance Guidance
On April 18, 2025, the Shanghai Administration of Market Regulation published the Casebook on the Compliance Guidelines for Healthcare Companies to Prevent Commercial Bribery Risks (Casebook,《医药企业防范商业贿赂风险合规指引》配套典型案例).
The Casebook aligns with the Compliance Guidelines and provides case studies illustrating the nine categories of high-risk activities listed in the Guidelines. Like the Guidelines, the content of the Casebook is well within the mainstream understanding of compliance requirements, as can be seen from these case studies:
| High-Risk Activity Category | Summary | Aggravating/ Mitigating Factor(s) |
| Academic Visits and Communications |
A pharmaceutical company’s sales representative paid cash kickbacks to a department director and head nurse during monthly academic visits in return for individual HCPs’ prescription data. Funds for the kickbacks were embezzled from the sales representative’s reimbursement of sales expenses. |
Aggravating factor: The pharmaceutical company did not cooperate with the investigation. |
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The person in charge of a medical device distributor provided kickbacks to a department director during academic visits in return for the increased use of consumables. |
N/A | |
| Speaker Fee/Service Fees for HCPs |
A medical device distributor falsified meeting invitations, sign-in sheets, contracts, and other supporting documents to provide “speaker fees” and “consulting fees” to HCPs who never provided any speaker or consulting services.
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Mitigating factor: The medical device distributor actively cooperated with the investigation. |
| Clinical Research |
A pharmaceutical manufacturer provided shares in an affiliated company to the director of a clinical research facility and also instructed a clinical research organization to make cash payments to the director to facilitate the initiation of clinical trials. |
N/A |
6. Recent Enforcement Actions
The government’s anti-corruption campaign in the healthcare sector continued in 2025. In the past six months, several healthcare companies, including multinational companies, have been subject to administrative fines for providing improper benefits to HCPs, such as holiday gifts or improper service fees. For example, on May 27, 2025, the Changning District Administration of Market Regulation in Shanghai issued an enforcement decision, imposing a fine of approximately 70,000 USD (RMB 500,000) on a European pharmaceutical company for falsifying academic events and providing speaker fees to public HCPs relating to these falsified events in order to increase sales. Notably, the enforcement decision specified that the investigation arose out of a whistleblower report.
There have also been significant enforcement actions targeting government officials in the healthcare sector. In February and May, two former officials of the National Medical Products Administration (NMPA, 国家药品监督管理局)2 were investigated by the Central Commission for Discipline Inspection of the Communist Party of China (CCDI, 中共中央纪律检查委员会 中华人民共和国国家监察委员会) for “serious violations of discipline and law,” although as is customary, no further details of the investigations were disclosed. The two former officials are:
- Shifei Chen (陈时飞), former Deputy Director of the NMPA from September 2018 to August 2022. During his tenure, Chen was primarily responsible for nationwide drug registration, evaluation, and approval, including overseeing the Center for Drug Evaluation (国家药品监督管理局药品审评中心). Chen also participated in the administration of the centralized procurement of drugs through volume-based purchasing while serving at the NMPA.
- Jingquan Bi (毕井泉), former Director of the NMPA from January 2015 to March 2018. During his tenure, Bi primarily initiated new schemes for drug approval, including an expedited approval process for generic drugs. He also introduced new regulatory programs, including the Marketing Authorization Holder system.
For questions on this or any related subject, please reach out to the authors or any of their colleagues in Arnold & Porter’s Life Sciences or White Collar Defense & Investigations practice groups.
© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.
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The 14 agencies are the National Health Commission (国家卫生健康委), the Ministry of Education (教育部), the Ministry of Industry and Information Technology (工业和信息化部), the Ministry of Public Security (公安部), the Ministry of Finance (财政部), the Ministry of Commerce (商务部), the National Audit Office (审计署), the State-owned Assets Supervision and Administration Commission of the State Council (国务院国资委), the State Taxation Administration (国家税务总局), the State Administration of Market Regulation (市场监管总局), the National Healthcare Security Administration (国家医保局), the National Administration of Traditional Chinese Medicine (国家中医药局), the National Disease Control and Prevention Administration (国家疾控局), and the National Medical Products Administration (国家药监局).
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The NMPA, formerly named the China Food and Drug Administration (CFDA, 国家食品药品监督管理总局), is China’s healthcare regulator, similar to the U.S. Food and Drug Administration.
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