A comparison of healthtech regulations: China

    By Lang Yuanpeng, Zhang Lu and Shi Qing, Jingtian & Gongcheng
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    CHINA

    INDIA

    JAPAN

    Online healthcare entered a period of rapid development during the pandemic. The advance of digital technologies such as big data, cloud storage and artificial intelligence has greatly changed the provision of medical and health products and services, accelerating the transformation of medical consultations and drug purchases. Online medical enterprises are also gradually foraying into healthcare and medicine integration.

    In 2022, the Detailed Rules on Supervision of Internet-based Diagnosis and Treatment (for Trial Implementation) and the Measures for the Supervision and Administration of Internet-based Drug Sales formulated management regulations for online diagnosis and treatment, and pharmaceutical e-commerce from two dimensions: healthcare and medicine. This article summarises key points and challenges in online diagnosis and treatment, and pharmaceutical e-commerce.

    OVERVIEW

    Lang Yuanpeng
    Lang Yuanpeng
    Partner
    Jingtian & Gongcheng in Beijing
    Tel: +86 10 5809 1189
    Email: lang.yuanpeng@jingtian.com

    In recent years, China’s online diagnosis and treatment market has gradually integrated with pharmaceutical e-commerce, forming a closed ecosystem providing one-stop medical services. Online diagnosis and treatment mainly include consultation platforms set up by internet companies, and internet hospital platforms set up by hospitals or third parties relying on physical hospitals, such as the consultation platform Ping An Health and internet hospital platforms of New Century Healthcare. Internet hospitals are further subdivided into those serving as the secondary name of physical medical institutions and those independently set up by relying on physical medical institutions.

    As a core monetisation model of the internet-based healthcare industry, pharmaceutical e-commerce mainly includes online healthcare models such as JD Health and Ali Health, and digital pharmacies like Dingdang Health, which provide an instant home delivery service by adopting online purchases and offline delivery. Taking the latter as an example, the Dingdang Medicine Express App has formed a closed-loop business model through its own offline pharmacies, direct drug supply from pharmaceutical companies and self-built distribution teams, supported by integrated online diagnosis and treatment, medication guidance and chronic disease management services provided by internet hospitals and medical teams.

    KEY SUPERVISION

    Zhang Lu
    Zhang Lu
    Partner
    Jingtian & Gongcheng in Beijing
    Tel: +86 10 5809 1150
    Email: zhang.lu@jingtian.com

    Although China’s internet infrastructure is relatively impeccable, regulations over online diagnosis and treatment, and pharmaceutical e-commerce, are still prudent, especially at this developing stage.

    Business qualification. Online medical institutions should obtain the practising licence of medical institutions, as well as the electronic data interchange or internet content provider licence (granted by the relevant competent telecommunications bureau), depending on their specific business and service models. Generally, if internet hospitals only provide diagnosis and treatment services for the physical hospitals they rely on, it may be understood as an expansion of sales channels, rather than value-added telecoms services. Pharmaceutical e-commerce companies need to obtain the value-added telecoms business permit and internet drug information service qualification certificate, while drug marketing licence holders or operating companies that have obtained a business licence can carry out online pharmaceutical sales business.

    Obligations. According to the above-mentioned measures, a pharmaceutical e-commerce platform company, as a “platform manager”, should: set up a drug quality and safety management body; establish and implement a drug quality and safety management system; be equipped with pharmacy technicians; and file with the local provincial medical products administration pursuant to relevant laws and regulations.

    The company should also strengthen its inspection to manage drug information display, prescription review, drug sales and deliveries from companies listed on the platform, while urging such companies to strictly perform their legal obligations. In case of discovering any unqualified sale of drugs or other serious violations, the platform manager should immediately stop providing services and displaying drug-related information.

    Shi Qing
    Shi Qing
    Associate
    Jingtian & Gongcheng in Beijing
    Email: shi.qing@jingtian.com

    Pharmaceutical retailers must also comply with regulatory requirements, including prescription management, rule system construction, information reporting, information publicity, delivery quality and safety assurance, record tracing, drug quality and safety prevention and control.

    Online medical treatment is allowed only for subsequent diagnosis. The above-mentioned measures establish the rule of “prohibition of online diagnosis first”. Detailed rules further require that patients should provide medical records with a definite diagnosis, and such a judgment should be made on whether the records meet the conditions for subsequent diagnosis. When the patient’s condition is not suitable for online diagnosis and treatment, the attending physician should immediately terminate diagnosis and treatment, and guide the patient to the physical medical institution for proper diagnosis.

    Physicians and patients should abide by real-name registration system. Physicians should be certified by their real names before making a diagnosis. Other persons, artificial intelligence and such should not pretend to be or take the place of physicians to provide diagnosis and treatment services. Patients are obliged to provide true identification and basic information to medical institutions and should not pretend to be others for treatment.

    Traceable online diagnosis and treatment process. Online medical institutions should ensure the whole process of diagnosis and treatment can be traced, and the data is accessible to the provincial regulatory platform. Electronic medical records at online medical institutions should be consistent with those at physical institutions they rely on – in the same format and shared in the system – so that physical medical institutions are able to carry out online and offline integrated quality control.

    Stricter regulation on online sales of prescription drugs. The principle of online and offline integration should be adhered to.

    • Prescriptions of online medical institutions should be made by attending physicians, and it is strictly forbidden to use artificial intelligence to automatically generate prescriptions. Effective measures should be taken to avoid repeated use of prescriptions.
    • At the level of drug information display and sales management, the requirements of “prescription before medicine” and “prescription review” are emphasised, such as distinguishing prescription drugs from non-prescription drugs, and not showing drug instructions before prescription review.
    • Clarifying responsibilities of the pharmaceutical e-commerce platform and retail companies. For example, the platform should be equipped with pharmacy technicians with management systems in place, such as prescription review and real name purchase of prescription drugs.

    NEW OPPORTUNITIES

    Recently, on 15 December 2022, the National Development and Reform Commission issued the Implementation Plan for the Domestic Demand Expansion Strategy for the 14th Five-Year Plan, proposing to actively develop “internet plus healthcare” services, along with orderly promotion of developing services such as scheduled diagnosis and treatment, electronic prescription circulation, and online drug sales.

    Therefore, eligible online medical services can be included in medical insurance in accordance with the procedures. Although this shot in the arm has ushered in a historic opportunity for development of the online healthcare sector, more supporting policies are required to realise the full benefits of these policies. These notably include platform system security, and medical and health data standards.

    For example, in the medical field, technological change and innovation will be more long-term and prudent. With the gradual deepening integration of digital technologies such as cloud computing, big data, the internet of things, artificial intelligence, mobile internet and medical care, the management and application of health data and medical information security will be a top priority.

    In addition to abiding by general laws and regulations such as the Cybersecurity Law, Data Security Law and Personal Information Protection Law, companies involved in online diagnosis and treatment, and pharmaceutical e-commerce, should also pay attention to special requirements of the industry. For example, online diagnosis and treatment institutions should establish network and data security systems, personal information and privacy protection, and implement strictest information security protection at level three or above in line with protecting against any damage that could result in serious harm to social order and public interest, or harm national security.

    At the same time, companies should promptly report to relevant competent authorities and take effective measures when any security incidents occur, such as leakage of patients’ personal information and medical data.

    Pharmaceutical e-commerce platforms and retail companies should also take effective measures to ensure the authenticity, accuracy, integrity and traceability of drug information throughout the transaction process. The platform should keep information such as drug displays, transaction records and complaints for at least five years, and not less than a year after the drug expiration date. Under stricter regulatory policies, higher service requirements and new challenges are posed for relevant enterprises in the process of moving from in-hospital to out-of-hospital, and from modularisation to integration.

    Jingtian & Gongcheng

    34/F, Tower 3, China Central Place
    77 Jianguo Road, Chaoyang District
    Beijing 100025, China

    Tel: +86 10 5809 1000
    Email: jingtianbj@jingtian.com

    www.jingtian.com

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