Industry Overview - The "Special Regulations on the Registration Management of Traditional Chinese Medicine" is set to reshape the Chinese medicine industry, with a deadline of July 1, 2026, for compliance [1] - The regulation mandates that any traditional Chinese medicine (TCM) with unclear safety information in its instructions will not be re-registered after three years from its implementation on July 1, 2023 [1] Safety and Quality Concerns - Concerns have been raised about the safety of TCM; however, data shows that TCM accounts for only 12% of adverse drug reactions, compared to 81% for chemical drugs, indicating relative safety [2] - The core purpose of the new regulation is to enhance the safety information in TCM product instructions, promoting high-quality development in the industry [2] Company Responses - Leading companies like Yiling Pharmaceutical and Rongchang Pharmaceutical have proactively updated their product instructions to comply with the new regulations, ensuring clear statements on contraindications, adverse reactions, and precautions [3] - Yiling Pharmaceutical has 17 patented TCM products that have been revised according to regulatory requirements, while Rongchang Pharmaceutical has simplified instructions for better consumer understanding [3] Industry Transformation - The industry is at a crossroads, facing short-term compliance pressures while needing to balance innovation and regulation in the long term [4] - The government encourages high-quality development and innovation in TCM, suggesting that products with clear evidence of safety and efficacy will gain a competitive edge in the market [4] - Although the policy changes may cause short-term challenges, they are expected to lead to healthier industry development by eliminating outdated practices and improving product quality [4]

Core Viewpoint - The pharmaceutical industry is preparing for a significant regulatory change with the upcoming deadline of July 1, 2026, for the implementation of the "Special Regulations on the Registration Management of Traditional Chinese Medicine" [1][3] Group 1: Regulatory Changes - The "life-and-death clause" for traditional Chinese medicine (TCM) was officially implemented on July 1, 2023, which states that any drug registration with "unclear" information in the sections of contraindications, adverse reactions, or precautions will not be re-registered after three years [3][4] - As of the end of 2025, there are approximately 57,000 valid TCM registration numbers in China, with over 40,000 having missing safety information [3][4] Group 2: Industry Response - Leading companies like Yiling Pharmaceutical and Rongchang Pharmaceutical have proactively completed the necessary revisions to their product labels, ensuring compliance with the new regulations [5] - Yiling Pharmaceutical has revised the labels of all 17 patented TCM products to include clear statements on contraindications, adverse reactions, and precautions [5] - Rongchang Pharmaceutical has also updated its product labels for better consumer understanding and has received approvals for age-appropriate modifications [5] Group 3: Safety and Quality - The new regulations aim to address the safety information gaps in TCM product labels, promoting high-quality development in the industry [4][6] - Data from the past five years indicates that TCM accounts for only 12% of reported adverse drug reactions, compared to 81% for chemical drugs, suggesting that TCM is relatively safe [4] Group 4: Market Implications - The impending regulatory changes are seen as an opportunity for compliant companies to strengthen their market positions by eliminating low-quality competitors [5][6] - The transition from a focus on quantity to quality in the TCM industry is viewed as a necessary evolution for sustainable growth [4][6]