Legal basis:
People's Republic of China (PRC) Drug Administration Law
Article 14 The establishment of a pharmaceutical wholesale enterprise shall be approved by the pharmaceutical supervisory and administrative department of the people's government of the province, autonomous region or municipality directly under the Central Government where the enterprise is located, and a Pharmaceutical Business License shall be issued; The establishment of a pharmaceutical retail enterprise must be approved by the local pharmaceutical supervisory and administrative department at or above the county level where the enterprise is located, and a Pharmaceutical Business License shall be issued. No drug business license, no drug business. The Drug Business License shall indicate the validity period and business scope, and shall be re-examined and issued upon expiration. When the pharmaceutical supervisory and administrative department approves the establishment of a pharmaceutical trading enterprise, it shall not only meet the conditions stipulated in Article 15 of this Law, but also follow the principle of rational distribution and convenience for the people to purchase medicines.
Article 48 The production (including preparation, the same below) and sale of counterfeit drugs are prohibited. Under any of the following circumstances, it is a counterfeit drug: (1) the ingredients contained in the drug are inconsistent with the provisions of the national drug standards; (2) passing off non-drugs as drugs or passing off other drugs as drugs. Drugs under any of the following circumstances shall be treated as counterfeit drugs: (1) Drugs prohibited by the drug supervision and administration department of the State Council; (2) Producing, importing or selling without the approval of this Law; (3) deterioration; (4) being polluted; (five) the use of raw materials that must obtain the approval number in accordance with this law, but have not obtained the approval number; (six) the indications or functional indications are beyond the prescribed scope.