Controversies

China TCM's Shandong Yifang Pharmaceutical 'Yuanzhi' Fails Aflatoxin Test and Is Ordered Investigated; Huamiao Pharmaceutical Fined and Confiscated Nearly RMB 9 Million for Unapproved Production

In September 2026, a drug sampling notice showed that the traditional Chinese medicine 'Yuanzhi' produced by Shandong Yifang Pharmaceutical Co., Ltd., under China Traditional Chinese Medicine Holdings, failed the aflatoxin test (the sample was taken from Linyi Traditional Chinese Medicine Hospital); regulators required the company to suspend sales and recall the product and opened an investigation, with the outcome not yet disclosed. Previously, Beijing Huamiao Pharmaceutical Co., Ltd., a directly owned subsidiary of China Traditional Chinese Medicine, was ordered to rectify by the Beijing Municipal Market Supervision Administration and fined RMB 5.2173 million, with illegal gains of RMB 3.6937 million and illegal property confiscated, for repackaging, producing, and selling fermented Cordyceps sinensis powder and other drugs without obtaining approval documents. Impact and handling: both incidents involve TCM quality and production compliance and have raised concerns about quality control at TCM companies under the state-owned pharmaceutical group. Progress: investigation opened. Involved entities: Shandong Yifang Pharmaceutical Co., Ltd., Beijing Huamiao Pharmaceutical Co., Ltd., and China Traditional Chinese Medicine Holdings Co., Ltd. Related scope: the 'Yuanzhi' batch from Shandong Yifang Pharmaceutical under China Traditional Chinese Medicine and products related to Beijing Huamiao Pharmaceutical's Cordyceps sinensis powder.