China Life Sciences: 2025 Year in Review
2025 was a year of notable developments for China’s life sciences industry, marked by significant revisions to major legislation and regulations. Heightened regulatory scrutiny across all sectors — from anti-corruption to medical insurance fraud — led to intensified enforcement action at all levels, accompanied by the introduction of new enforcement priorities and adoption of novel regulatory approaches.
This Advisory summarizes key legislative and regulatory developments as well as the major enforcement trends from 2025.
Finalized Compliance Guidelines for Healthcare Companies to Prevent Commercial Bribery Risks
On January 10, the State Administration for Market Regulation 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), which 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.1
Refined Social Credit Evaluation System for Public Procurement
On May 20, 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 (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), which introduced refinements to China’s Social Credit Evaluation System for Public Procurement.
Established in 2020, the Social Credit Evaluation System identifies and regulates pharmaceutical companies’ “dishonest practices” in public procurement, such as bribery, monopolistic practices, and bid rigging, and imposes penalties for such practices, up to debarment from public procurement in all provinces. Notable updates in the Credit Evaluation Notice include expansion of the sources of information used for credit evaluations, revisions to the categories and thresholds used for evaluations, and continued emphasis on end-to-end compliance management.2
Finalized Whistleblower Regulation on Quality and Safety Issues of Drugs and Medical Devices
On May 29, the National Medical Products Administration (NMPA, 国家药品监督管理局), the Ministry of Finance (财政部), and the State Administration for Market Regulation (国家市场监督管理总局) jointly released the final version of 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). This program is intended to reward whistleblowers who report significant quality and safety issues relating to drugs and medical devices.3
Draft Medical Insurance Law
On June 27, the NPC published the Draft Medical Insurance Law (中华人民共和国医疗保障法(草案)) for public comment. The Draft Medical Insurance Law established a regulatory framework for China’s public medical insurance system, including regulations for the operation and management of public medical insurance funds and services. When finalized, the Draft Medical Insurance Law will become China’s first comprehensive legislation governing the public medical insurance system.
The Draft Medical Insurance Law compiled and generally reaffirmed the regulatory regime for the public medical insurance system set forth in earlier laws and regulations. The Draft Medical Insurance Law also includes some notable developments, such as using electronic tracking systems (such as UIDs) for drugs and medical consumables to prevent illegal resale of products purchased with public medical insurance funds. These tracking systems were previously only used by regulators for quality and safety issues.
The Draft Medical Insurance Law differentiates between “fraud” and “improper use” of public medical insurance funds. Fraud carries more severe administrative penalties and is distinguished from “improper use” based on whether the implicated individual or entity intended to improperly obtain medical insurance funds. Potential penalties include fines, suspension or termination of services related to public medical insurance, suspension or termination of business operations, or suspension of or limitations on the use of public medical insurance funds. Notably, these penalties are applicable to both individuals and entities, and personnel of entities engaged in misconduct can be debarred from operating businesses relating to public medical insurance for five years.
Regulators have also taken measures to develop China’s private medical insurance system, including by introducing the first Commercial Health Insurance Innovative Drug List (Innovative Drug List, 商业健康保险创新药品目录) in December 2025. The Innovative Drug List focuses on drugs that are highly innovative, have significant clinical value, and offer substantial patient benefit, but are not yet part of the National Reimbursement Drug List (NRDL). While the Innovative Drug List was published for reference, some low-cost semi-public insurance programs have begun covering drugs enrolled in the Innovative Drug List.
Life Sciences Enforcement – Anti-Corruption
Anti-corruption enforcement in the life sciences industry remained a top priority for regulators in 2025, as reflected in the Notice on Promulgation of the Key Points for Rectifying Misconduct in the Field of Pharmaceutical Purchase and Sales and Medical Services in 2025 (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), which called for continued scrutiny of sales and distribution operations, as well as heightened scrutiny in critical areas such as genetic testing, patient information protection, and medical insurance claims. 4
In January 2026, the NHSA, which is responsible for China’s state-run medical insurance program, published six model cases relating to bribery in the life sciences industry:
| No | Summary | Penalty | Notes |
| 1 | A consulting company provided promotional and information services for a pharmaceutical distributor. Personnel from the consulting company paid kickbacks totaling RMB 35,046 (US$5,007) to a Healthcare Professional (HCP) via WeChat from January to December 2023, in return for increased sales of a drug handled by the distributor. |
The consulting company was found to have violated Article 7.1 of the AUCL and was fined RMB 300,000 (US$42,857). | In addition to the distributor, Shanghai Pharmaceutical Centralized Bidding Procurement Management Office (上海市药事所) also initiated a credit evaluation of the product’s manufacturer. |
| 2 | From 2012 to 2023, an HCP received kickbacks totaling RMB 789,110 (US$112,730) from sales representatives and sales managers from six pharmaceutical distributors in return for increased sales of their products. | The HCP was sentenced to one year and eight months’ detention with two years’ probation, and was fined RMB 100,000 (US$14,286). | The implicated distributors would have their credit scores evaluated based on these findings. |
| 3 | The actual controller of a medical device distributor provided kickbacks totaling RMB 8,000,000 (US$1,142,857) to a hospital director to facilitate medical device procurement, secure business opportunities, and increase business volume. | Undisclosed. | The medical device distributor received an “Extremely Dishonest” credit evaluation and was debarred from distributing products through Chongqing’s central procurement system for five years. |
| 4 | From 2011 to 2020, a sales representative provided kickbacks, including (1) RMB 395,000 (US$56,429) in cash, (2) US$9,900 in cash, and (3) gold bullion to HCPs. The sales representative was also charged with bribery of entities, i.e., paying RMB 1,191,243 (US$170,178) in cash to multiple hospital clinical departments. | The sales representative was sentenced to two years and six months’ detention and was fined RMB 200,000 (US$28,571). | The implicated distributor would have their credit score evaluated based on these findings. |
| 5 | An orthopedic HCP who was also a hospital director received kickbacks from pharmaceutical and medical consumable distributors totaling RMB 2,720,548 (US$388,649). | The HCP was sentenced to five years and six months’ detention, and was fined RMB 400,000 (US$57,143). | The implicated pharmaceutical and medical consumable distributors would have their credit scores evaluated based on these findings. |
| 6 | From 2012 to 2022, an orthopedic HCP received kickbacks from medical device distributors totaling RMB 3,656,457 (US$522,351). The kickbacks ranged from 10% to 40% of the products’ prices. | The HCP was sentenced to six years and six months’ detention, was fined RMB 500,000 (US$71,429), and had illegal gains of RMB 3,656,457 (US$522,351) confiscated. | The implicated distributors would have their credit scores evaluated based on these findings. |
Key observations from these cases and other 2025 enforcement actions include:
- Enforcement of the Credit Evaluation System. In addition to the use of the Credit Evaluation System as a disciplinary measure in these model cases, the NHSA also published its latest list (16th series) of pharmaceutical companies categorized as “Seriously Dishonest” and “Extremely Dishonest” in February 2026, which included 45 companies newly categorized as “Extremely Dishonest.” Provincial pharmaceutical procurement platforms have also published Letters of Apology issued by domestic and multinational pharmaceutical companies concerning findings of dishonest practices as part of the corrective measures required by the Credit Evaluation system.
- Diversified enforcement targets. The six model cases included enforcement actions targeting multiple sectors of the life sciences industry, including pharmaceutical and medical device distributors, sales representatives, hospital directors, and clinical doctors. In 2025, there have also been enforcement actions targeting high-level government officials in the life sciences industry, including those who previously served in the NMPA and local and provincial health commissions, as well as domestic and multinational manufacturers.5
- Multifaceted enforcement focus. While paying kickbacks to HCPs remains a primary area of focus, administrative decisions and court judgments published in 2025 targeted a broad range of misconduct, including free placement of medical devices, speaker fees and service fees for HCPs, and outsourced service providers. Media reports discussed investigations into manufacturers’ use of vendors to pay potentially questionable speaker and service fees, and into sales representatives’ falsification of supporting documentation for clinical trials to obtain and distribute free drugs to patients.
- Increased collaboration among regulators. Multiple administrative decisions relating to commercial bribery published in 2025 suggested that, although the cases were brought by the Administration for Market Regulation, they were likely referred by other agencies, such as disciplinary inspection committees and/or people’s procuratorates.
2025 also saw heightened regulatory scrutiny on academic and industry associations. This is reflected in the December 2025 Report on the Remediation of Issues Identified in the Audit of Central Budget Execution and Other Fiscal Revenues and Expenditures for Fiscal Year 2024 (2024年度中央预算执行和其他财政收支审计查出问题整改情况的报告), which listed findings by the National Audit Office relating to industry and academic associations administered or supervised by the central government, and the status of the corresponding remediation. For example, a healthcare-focused academic association was found to have failed to follow the government procurement process for conference services. Other issues identified included associations improperly charging pharmaceutical companies fees for brand promotion at conferences and allowing companies improper influence over training programs. The report noted that some associations acted as the organizers of the training programs in name only, without carrying out any substantive responsibilities.
Life Sciences Enforcement – Medical Insurance Fraud
2025 also saw an increase in the number of criminal and administrative enforcement actions against medical insurance fraud, which already was one of the major focus areas for Chinese regulators in recent years. The “Hundred-Day Campaign” launched by the NHSA in September 2025 highlighted regulators’ focus on key issues, such as falsification of prescriptions and the prescribing of drugs in excess of appropriate clinical use. Model cases published by the Supreme People’s Court, the Supreme People’s Procuratorate, and the NHSA in 2025 reflected the number of agencies focused on this issue, targeting not only sales representatives, but also personnel from healthcare institutions, pharmacists, patients, and other individuals. Some of these model cases also illustrated the regulators’ use of electronic tracking systems, previously introduced to address quality and safety issues, to tackle medical insurance fraud. We expect to see these enforcement actions continue in 2026.
Regulators also began investigations into medical insurance fraud arising from the operation of patient assistance programs (PAP), as seen in a 2025 court judgment regarding a domestic manufacturer’s operation of a PAP for a medication that had already been listed for reimbursement through the national medical insurance program.
For questions on this or any other subject, please reach out to the authors or any of their colleagues in Arnold & Porter’s Life Sciences or White Collar Defense & Investigations practice group.
*Zhewen Zhang contributed to this Advisory.
© Arnold & Porter Kaye Scholer LLP 2026 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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For further analysis of the Compliance Guidelines, see Chinese Regulators Publish Final Anti-Corruption Guidelines for the Healthcare Industry.
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For further analysis of the Credit Evaluation Notice, see China Compliance Update: Life Sciences — Summer 2025.
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For further analysis of the Whistleblower Notice, see China Compliance Update: Life Sciences — Summer 2025.
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For further analysis of this Notice, see China Compliance Update: Life Sciences — Summer 2025.
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For more details of enforcement actions targeting Chinese government officials in the life sciences industry, see Recent Enforcement Cases in China Life Sciences Compliance.
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