This research explains the Chinese drug policy reform, specifically the drug supply or the distribution process to health care facilities. Secondary materials such as books, online articles, and journals were used to source for information during the research. The findings revealed that people in China have the freedom to quickly obtain medications from the market without a prescription, which could have adverse effects on their safety and health. The distribution system has a risk of introducing very unfair competitive methods, which may result in fraud, the supply of counterfeit products, low-quality production, among others. The research recommends that the Chinese government should be stricter towards the enforcement of already made laws to control and regulate the production and distribution of drugs. For both pharmaceutical manufacturers and distributors to remain competitive in the Chinese drug market, they ought to adjust to the two-invoice system by changing how they operate and the business strategies they use.