Renowned traditional Chinese medicine companies are hit with severe penalties! 20 pharmaceutical companies have been “named” as leads in an alleged case-operations source line clue, as large-volume infusion drug centralized procurement lands, and Yekang and Yunnan Baiyao’s innovative drugs surge dramatically.

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“Reflux drugs,” forged prescriptions… National Healthcare Security Administration makes a major move

On April 2, the National Healthcare Security Administration released a statement, continuing to carry out a special campaign to crack down on illegal and noncompliant issues in the area of healthcare security drugs. The special campaign is divided into two phases: the first phase will be from April to July 2026, and the second phase from September to November 2026. The National Healthcare Security Administration will issue, at the beginning of April 2026 and the beginning of September 2026 respectively, a batch of leads concerning repeated settlement by duplicated healthcare security drug traceability codes. (National Healthcare Security Administration)

Further reading:

Local healthcare security departments, together with relevant authorities, will take overall coordination of leads issued nationally, leads on excessive prescribing locally, leads from public举报 complaints, and more. They will conduct in-depth verification and remediation to precisely crack down on illegal and noncompliant issues such as the buying and selling of “reflux drugs” for healthcare security purposes, swapping healthcare security drugs, using healthcare security credentials fraudulently, forging prescriptions, hoarding and purchasing drugs, and “year-end spike” consumption. They will promptly recover losses to the healthcare security fund and, depending on the severity of the circumstances, take measures such as interviews and reminders, time-limited rectification, suspension of healthcare security settlement, termination of service agreements, point-based management of healthcare security payment eligibility, and transferring cases to industry regulators, judicial authorities, and discipline inspection and supervision agencies for handling.

A three-year action to improve primary-level healthcare quality will be carried out

On April 1, the National Health Commission and the National Administration of Traditional Chinese Medicine jointly issued a notice on carrying out a three-year action to improve medical quality in primary-level healthcare and health institutions (2026-2028),推进 primary-level medical quality improvement and promoting the implementation of “the primary-level facility is the first point of care” in tiered diagnosis and treatment. By the end of 2028, all village clinics and community health service stations will be included in the medical quality management system. (Guangming Daily)

New progress in the fourth round of centralized procurement of Chinese patent medicines; multiple exclusive products included

On March 30, the Hubei Healthcare Security Service Platform issued a notice soliciting opinions on the fourth round of centralized procurement of Chinese patent medicines and the documents for the second round of follow-on procurement. The time limit is until before April 3, 2026 (Friday). According to the draft for soliciting opinions, the fourth round of centralized procurement of Chinese patent medicines covers a total of 28 product groups and 90 products, including multiple exclusive varieties. The procurement cycle runs from the date when the selected results are actually implemented through December 31, 2028. (Hubei Healthcare Security Service Platform)

Further reading:

On March 29, the Hubei Healthcare Security Service Platform issued a notice that on the afternoon of March 31 a communication meeting for nationwide Chinese patent medicine alliance procurement enterprises was held. The meeting covered the main rules considerations for the alliance’s fourth batch of new products and the second batch of follow-on procurement, and heard enterprises’ opinions and suggestions on the procurement rules.

Centralized procurement of large-volume infusion drugs takes effect

On March 31, the Sichuan Provincial Drug and Medical Device Tendering and Procurement Service Center issued a notice. To ensure that province-to-province alliance-based volume-linked procurement of large-volume injections such as sodium chloride is advanced in an orderly manner in the province, relevant medical institutions, selected enterprises in the centralized procurement, and distribution enterprises will begin completing a three-party contract signing within one month starting March 31, 2026. The center will monitor the status of contract signing. Starting March 31, procurement contracts will be implemented and the selected product prices will be implemented. (Pharmaceutical Cloud)

Maximum price cuts exceed 90%; 47 drugs are suspended from online listing

On April 2, the Heilongjiang Public Resource Trading Center released a public notice of price adjustment by enterprises applying independently for governance of drug prices already online for 2026 (the ninth batch), involving 119 drugs, with a maximum price cut exceeding 90%. Judging from the status of the online listing results after adjustment, 72 drugs are online, and 47 drugs are suspended from online listing. The publicity period is 1 day. For drugs with no objections after the publicity period ends, the drugs will be restored to online listing and executed in the Heilongjiang Provincial drug and medical consumables tendering and procurement administration system. (Heilongjiang Public Resource Trading Center)

Yue Kang Pharmaceutical delivers a major innovative drug

On April 3, Yue Kang Pharmaceutical released an announcement stating that its wholly-owned subsidiary Yue Kang Ke Chuang’s YKYY018 nebulized inhalation solution for the treatment and prevention of infection by human parainfluenza virus has obtained approval from the National Medical Products Administration for a clinical trial. The product is a membrane fusion inhibitor drug independently developed by the company based on its end-to-end AI platform. As of now, worldwide there are still no approved marketing drugs or vaccines for treating human parainfluenza virus infection. There are significant and urgent unmet needs in the fields of clinical treatment and prevention. (Company announcement)

A leading traditional Chinese medicine stock is sprinting for a Category 1 new drug; over RMB 4 billion in cash dividends is eye-catching

On April 2, Yunnan Baiyao released an announcement that its INB301 injection has been approved for clinical trials. The product is a Category 1 innovative drug—biologic therapy for treatment—developed by the company, proposed for treatment of cancer cachexia. As of now, the company has invested approximately RMB 43.47 million in R&D expenses for the product. On April 1, the company disclosed its 2025 annual report. Both performance metrics (revenue and net profit) grew year over year. In addition, it also proposed a generous cash dividend plan of RMB 15.83 per 10 shares. When combining the proposed cash dividend with the special dividend already implemented in 2025, the total combined cash dividend for 2025 is expected to reach RMB 4.64B, accounting for 90.09% of the net profit attributable to shareholders. (Company announcement)

Two innovative drugs approved for上市 on the same day

On April 2, the National Medical Products Administration continuously updated two innovative drug catalogs, approving the Category 1 innovative drug Norepinephrine hydrochloride injection submitted by Zhuhai Run due Pharmaceutical, the Category 1 radiopharmaceutical innovative drug technetium [99mTc] pexeyric acid peptide injection submitted by Foshan Ruideao Pharmaceutical, and the injection technetium [99mTc] pexeyric acid peptide drug kit for the preparation of the drug for上市. The norepinephrine hydrochloride injection is a cardiac stress test drug, suitable for radionuclide myocardial perfusion imaging (MPI) to evaluate myocardial ischemia. The technetium [99mTc] pexeyric acid peptide injection is a radioactive diagnostic drug targeting integrin αvβ3 for imaging using single-photon emission and X-ray computed tomography systems (SPECT/CT). It is used for supplementary examinations of regional lymph node metastasis in patients with suspected lung cancer. (National Medical Products Administration)

Case leads identified; 20 pharmaceutical companies are “named”

On April 2, the Shanghai Sunshine Pharmaceutical Procurement website issued a notice on receiving the “Inquiry Letter on Matters Related to Medicine Pricing and Procurement,” specifying that, according to relevant document provisions, pharmaceutical enterprises and their employees, as well as commissioned agents, due to pharmaceutical commercial bribery, implementing monopoly behavior, price and tax-related illegal acts, etc., will be held legally liable or result in the bribed party being held legally liable. They should proactively report specific information to the provincial centralized procurement institution. The recipient set covers drug上市 license holders for case leads involving a total of 20 drugs. (Pharmaceutical Representative)

Further reading:

Delivery rules are clearly defined. Relevant enterprises must collect the materials within the specified time limit; if not collected by the deadline, delivery will be deemed to have been completed 15 days from the date this notice is published. Relevant enterprises should cooperate with subsequent inquiries as required and fulfill the relevant obligations.

A well-known traditional Chinese medicine company faces severe penalties

On April 1, the State Taxation Administration released a tax case notice revealing the “no-capital deal” behind suanziren—uncovering the truth of the value-added tax invoice fraud case involving entities including Neiqiu Yise Qiushui Traditional Chinese Medicine Co., Ltd., and others (8 companies). After investigation, from 2020 to 2023, these 8 companies opened value-added tax special invoices to others without real goods transactions. In August 2024, the first investigation bureau of the Xingtai Municipal Taxation Bureau of the State Taxation Administration, in accordance with relevant laws and regulations, identified 10,267 value-added tax special invoices issued by the above 8 companies as fraudulent. In June 2025, the actual controller of Neiqiu Yise Qiushui Traditional Chinese Medicine Co., Ltd. was sentenced to two years’ imprisonment and fined for the crime of issuing fraudulent value-added tax special invoices. The other six people were prosecuted for alleged crimes including issuing fraudulent value-added tax special invoices by the People’s Procuratorate of Neiqiu County to the People’s Court of Neiqiu County. Meanwhile, tax authorities have, in accordance with law, carried out investigations and verification or filed case inspections for 15 downstream enterprises that received invoices, and recovered and deposited taxes totaling RMB 65 million. (State Taxation Administration)

A batch of typical cases involving serious violations and dishonesty are exposed

On March 30, the Guangdong Provincial Market Supervision Administration released a batch of typical cases involving a serious violations and dishonesty list, totaling 10 cases. These include a certain biotechnology company in Shantou listed due to purchasing drugs not from drug上市 license holders or enterprises with drug manufacturing and operating qualifications, and failing to comply with drug operation quality management regulations; and Lin Moumou in Huizhou listed for selling counterfeit drugs. (Guangdong Provincial Market Supervision Administration)

Suspected of violating information disclosure rules; this pharmaceutical company has been filed for investigation

On April 2, Nengte Technology released an announcement stating that, due to suspected violations of information disclosure laws and regulations, the China Securities Regulatory Commission has decided to file a case for investigation against the company in accordance with relevant laws and regulations. The announcement says that, at present, all production and business activities are normal and orderly. During the investigation period, the company will actively cooperate with the CSRC’s investigation work and strictly fulfill information disclosure obligations in a timely manner in accordance with relevant laws, regulations, and regulatory requirements. (Securities Times)

Management changes across multiple pharmaceutical companies

On March 31, Kangyuan Pharmaceutical released an announcement that its board of directors decided to appoint Xiao Lihao as vice general manager, with a term from the date the board approves the appointment until the expiration date of the term of the eighth board. On April 2, Anke Bio released an announcement appointing Dou Changlin as the company’s Chief Executive Officer and Chief Scientist. On April 3, Fosun Pharma released an announcement that, due to adjustments to work arrangements, Chen Zhanyu applied to the board to resign as Chief Financial Officer. The resignation becomes effective on April 2, 2026. After the resignation takes effect, Chen Zhanyu will continue to serve as the company’s senior vice president. In addition, Huang Zhi has been appointed as the company’s senior vice president and Chief Financial Officer, with a term from April 2, 2026 through the expiration of the current board’s term. (Company announcement)

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