The Shakeout of Chinese Patent Medicines: Up to 40% of Approvals Could Exit the Market in 3–5 Years

With only six months left until July 1, 2026, China’s National Medical Products Administration (NMPA) is entering the final implementation window for Article 75 of the “Special Provisions on the Administration of Chinese Medicine Registration.” Industry experts dub it the “life-or-death clause” for Chinese patent medicines: after three years of enforcement, any medicine whose package insert still marks contraindications, adverse reactions, or precautions as “unclear” will have its re-registration application denied.

This affects over 57,000 approved Chinese patent medicine products, with more than 70% facing potential elimination due to incomplete safety information. The new regulation marks a decisive end to the long-standing era of vague package inserts, forcing manufacturers to supplement post-marketing safety data.

Research shows that in the 2018 National Essential Medicines List, among 268 Chinese patent medicines, package inserts only reported adverse reactions, contraindications, and drug interactions at rates of 20.64%, 30.1%, and 1.07%, respectively. Many products relied on vague wording to circulate in the market. With the upcoming re-registration review, such “ambiguity-based immunity” is no longer viable.

Regulatory actions have already started. In 2025, multiple package insert revision notices were issued, requiring common products such as Huolisu Oral Liquid, Gushen Shengfa Pills, and Xiaohuoluo formulations to update core safety information. Additionally, the “Special Provisions on the Supervision of Chinese Medicine Production,” effective March 1, 2026, will impose stricter standards on decoction processing, packaging, and labeling, raising industry entry barriers.

The cost and technical demands of compliance are driving a clear industry divide. Leading companies such as Yunnan Baiyao, Tongrentang, and CR Sanjiu are streamlining product lines, eliminating low-value approvals, and focusing resources on real-world studies and re-registration of core products. Small- and mid-sized enterprises face tough choices: either exit low-barrier markets or sell their approvals, creating a short-term surge in the approval transfer market.

Analysts predict that leading companies will retain over 70% of core products, mid-tier firms may lose half of their approvals within two years, and smaller companies will likely be cleared out, leaving only those with unique raw material supply capabilities. Nationwide price regulation further compresses the survival space for low-quality products through dual controls on package inserts and pricing.

In the next 3–5 years, up to 40% of Chinese patent medicine approvals may exit the market. Enterprises have three main strategies:

1. Conduct real-world studies for core products, supplement safety data, revise package inserts, and secure approvals;
2. Apply for improved formulations as “old drugs reborn” to gain innovative drug status;
3. Voluntarily cancel low-value approvals, concentrating on core product lines.

Industry trends are clear: entry barriers are rising sharply; only clinically valuable products will receive insurance reimbursement; competition will accelerate toward concentration, with R&D, quality, and branding becoming critical barriers.

As one industry insider notes, “The revival of Chinese medicine relies on clinical value and scientific evidence, not the number of approvals.” The July 1, 2026 deadline is not a winter for the industry, but an opportunity for regulatory-driven cleansing and rebirth.