China Life Sciences Compliance Update: Insurance Fraud Enforcement Campaign and New Ethical Code for HCPs

Chinese authorities have launched a special “Hundred-Day Campaign” to target misconduct relating to China’s state-run medical insurance program and issued a new Ethical Code for Healthcare Professionals, highlighting the government’s continued focus on compliance and integrity within the healthcare sector.

Insurance Fraud “Hundred-Day Campaign”

On September 25, 2025, the National Healthcare Security Administration (国家医疗保障局, NHSA), which is responsible for China’s state-run medical insurance program, published the Notice on Launching the “Hundred-Day Campaign” for Special Rectification of Prominent Issues in Medical Insurance Fund Management (关于开展医保基金管理突出问题专项整治“百日行动”的通知). This campaign will run until December 31, 2025, and focuses on several key issues:

• Falsified prescriptions by medical insurance-designated medical institutions (定点医药机构), illegally swapping drugs (串换药品), “drug recycling (回收) by medical institutions,” inducing “maximum utilization of annual coverage limits (冲顶消费)” when not medically indicated, and illegal resale of medications by individuals
• Abnormal prescribing and purchasing behaviors detected through drug traceability codes (追溯码), such as prescribing beyond clinical need, mismatched prescriptions and diagnoses, and purchasing under false identities

This campaign highlights regulators’ continued focus on fraud and abuse of the state-run medical insurance program. Enforcement case studies published by the NHSA further highlighted two specific types of insurance-related misconduct by pharmaceutical sales representatives:

• Forging Prescriptions: A sales representative purchased counterfeit hospital seals and printed fake prescriptions to enable the illegal sale of drugs totaling approximately RMB 120,000 (approximately $17,000) at a pharmacy.
• Orchestrating Fraudulent Insurance Claims: A sales representative accompanied insured patients to purchase a monoclonal antibody therapy. Patients would purchase two doses of medication at the discounted price offered through the state-run medical insurance program, but only receive one dose. The second dose was given directly to the sales representative, presumably for sale on the black market.

While the “Hundred-Day Campaign” focuses on enforcement against specific fraudulent acts, a parallel development aims to reinforce integrity at the source: the conduct of healthcare professionals.

The Ethical Code for Healthcare Professionals

The Ethical Code for Healthcare Professionals (2025 Version) (医务人员职业道德准则（2025年版）, the Code) was jointly published by the National Health Commission (国家卫生健康委) and three other government agencies on August 1, 2025. The Code generally outlines broad principles such as “political commitment (坚定政治方向),” “patriotism,” and “following the law (遵纪守法),” but also emphasizes that healthcare professionals should respect patients’ rights to informed consent and privacy and protect patients’ privacy and personal information.

These latter requirements are notable for two reasons. Firstly, the emphasis on patient consent and privacy aligns with the rapid development of China’s regulatory framework for privacy and personal information protection. These requirements also appear to target the illegal collection of prescription data for commercial purposes. In China, collection of individual HCPs’ prescription data is illegal. However, regulators have published multiple enforcement cases in which sales and/or marketing personnel were found to have illegally obtained such prescription data in order to pay kickbacks to HCPs.

Takeaways

The “Hundred-Day Campaign” and new Ethical Code represent the latest efforts by regulators to enhance transparency and accountability across China’s healthcare system. Companies operating in the sector should understand these requirements, reinforce internal compliance training, and proactively assess any potential risks in their interactions with the healthcare system and the state-run medical insurance program.

Jialing Xiong contributed to this Advisory.  

© 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.