Throughout the pandemic, some pharmaceutical and health care products made false claims about the product’s ability to prevent COVID-19 and improve immunity. These claims were the focus of regulatory supervision in China. However, one of the basic requirements for such ads, i.e., prior government approval for pharmaceutical and certain health care products, is often ignored by advertising publishers and advertisers.
One recent example is that of Baidu Video, which in June of 2020 incurred a fine of three times the advertising fee it received from the advertiser, for publishing a medical treatment advertisement without obtaining prior approval from the governmental authority. Many media platforms have been punished for similar reasons.
What kinds of advertisements need to obtain official approval before publishing?
The requirement to obtain approval before publishing certain advertisements is not new. Both the Advertising Law and the Interim Measures for the Administration of Internet Advertising stipulate that prior approval must be obtained for publishing any advertisement for medical treatment, drugs, foods for special medical purpose, medical devices, pesticides, veterinary medicines or health care products (such as vitamins).
In December 2019, the Interim Administrative Measures for Approval of Advertisements for Drugs, Medical Devices, Health Care Products and Foods for Special Medical Purpose was issued (effective on March 1, 2020) and emphasized the importance of this mechanism for the eponymous products.
Who is liable when these ads are published without prior approval?
According to the Advertising Law, where an advertising agent or advertisement publisher designs, produces, provides agency services for or publishes an advertisement, when it knows or should know the existence of the illegal acts (including publishing advertisements without requisite prior approval), then the market regulation department shall confiscate the advertising fees and impose a fine of up to three times the amount of the advertising fees; where the advertising fees cannot be calculated or are very low, a fine of RMB 100,000 to RMB 200,000 shall be imposed; where the circumstances are serious, a fine of three-to-five times the advertising fees shall be imposed, and where the advertising fees cannot be calculated or are significantly low, a fine of RMB200,000 to RMB1 million shall be imposed. In any of these circumstances, the regulatory authority may suspend the advertisement publishing business, revoke the business license, or revoke the registration certificates for advertisement publishing.
Enforcement priorities: Advertisements for medical treatment, pharmaceuticals, and health care products
In recent years, China has been rigorously supervising advertisements related to health. and prioritizing advertisements for medical treatment, pharmaceuticals, and health care products (such as vitamins), a position reaffirmed in the 2019 and 2020 Advertisement regulation priorities issued by the State Administration for Market Regulation (SAMR). This document detailed that such ads made up more than half of the illegal cases exposed by the SAMR in 2019, mostly for violations related to exaggerated effects, publishing without prior approval, and failure to mention adverse effects.
Thus, both the advertiser (i.e., the brand) and advertising publisher (such as the media platform) need to be careful when publishing any advertisement for medical treatment, pharmaceuticals, health care products or any other categories that require prior approval. There are additional rules and requirements related to the content of these advertisers, which we will address in the future.