Announcement of CFDA on Regulating Illegal Activities in Drug Distribution (2016, No, 94)

To implement the CPC Central Committee and State Council’s “Four Strictest (Strictest Standards, Regulation, Punishment, and Accountability)” requirements on food and drug regulation, further rectify and regulate drug distribution, and crack down on illegal activities, CFDA decides to carry out concentrated rectification of illegal activities in drug distribution.

The announcement is hereby given that:

1. All pharmaceutical wholesalers should conduct self-inspection first to check whether their enterprises have the following illegal acts.

(1) Provide others with places, qualification documents, bills and other conditions for illegal operation of drugs;

(2) Purchase drugs from individuals or units without “Pharmaceutical Production License” or “Pharmaceutical Trade License”;

(3) Sell drugs to units without legal qualifications or individuals; sell vaccines to pharmaceutical retail enterprises; and know or should know the people engaged in unlicensed business activities but still provide drugs to them;

(4) Forge pharmaceutical purchase sources, fable flow directions of sold drugs, falsify data of the computer system and temperature and humidity measuring system, conceal the real drug purchase and sales records, notes, vouchers, data, etc.; or drug purchase and sales records are incomplete, untrue; and business behaviors cannot be traced;

(5) When purchasing and selling drugs, the certificate (license), ticket (invoice, bills with the goods), accounts (physical accounts and financial accounts), goods (physical drugs) and fund (payment for goods) cannot correspond to each other; the drugs are not put in storage; set up concealed accounts; the drug is not included in the enterprise quality system for management; use personal bank account for business transaction, etc.;

(6) Have stupefacient, psychotropic substances and compound preparations containing special drugs flow into illegal channels or transact them in cash;

(7) Store drugs at places other than the approved addresses;

(8) Not store, transport drugs or monitor the temperature and humidity of drugs according to provisions;

(9) Alter the registered address, business pattern or the variety of drugs within the scope of business arbitrarily;

(10) Sell drugs to pharmaceutical retail enterprises and clinics but fail to issue sales invoice and have the invoice go with the goods.

2. The pharmaceutical wholesale enterprise should inspect their drug business behavior since July 1, 2013 by referring to the above-mentioned problems one by one, describe the problem that exists in detail including the way used, the process and drugs and personnel involved in, make rectification measures and plans carefully, form a self-inspection and rectification report, and submit it to the provincial food and drug supervision department it is in before May 31, 2016. The legal representative of the enterprise shall sign and seal the report and make a commitment to the authenticity, completeness and rectification of the report.

3. Pharmaceutical wholesale enterprises that can take the initiative to find their problems before May 31, 2016, report the name list of all affiliated personnel and name list of the unlicensed units borrowing invoices and bills from your company, can expel all affiliated personnel, and correct its other illegal issues can be punished lightly; for those that do not submit the report by the deadline, the Provincial Food and Drug Administration shall publish the enterprise list to the society and list them in the key inspection objects; for those that refuse to report, give false information, self-inspect carelessly, do not rectify in place and continue their illegal business, they shall be revoked the Certificate of Good Supply Practice for Pharmaceutical Products (GSP), investigated and punished strictly and heavily, and even be revoked the Operation Permit for Pharmaceutical Products; for enterprises with the behaviors listed in Item (1), (2), (3), (4) and (5) of Article 1 in this announcement, they shall all be revoked the Operation Permit for Pharmaceutical Products according to the Article 78, 79, 81 and 84 of the Drug Administration Law of the People’s Republic of China and published to the society; those suspected of crime shall be transferred to the public security organ; the legal representative and main principal of the enterprise shall be included in the black list for management, their name and identity information shall be published to the society; and they shall be notified to relevant departments according to provisions and be punished and disciplined jointly.

4. All provincial food and drug administration departments shall timely summarize and carefully analyze the situation of enterprise self-inspection and rectification; train inspection personnel in a unified way, organize the capable force, use the method of cross-inspection in different places, and implement supervision and inspection with targets and focuses. For enterprises with low daily management level, chaotic purchase and sales channels, frequent cases, but fewer problems found in self-inspection and ineffective rectification measures, they should be inspected as the focus object. Moreover, spot check should be carried out to several varieties of every key enterprise inspected; conduct upstream and downstream extension inspection to their real flow directions and invoices. Cooperative investigation and field inspection shall be combined to thoroughly inspect those trans-administrative area cases. During inspection, the authorities should effectively find problems, deal with them decisively, and resolutely adopt measures to punish those illegal enterprises. The rectification cases should be summarized and reported to the National Food and Drug Administration before September 30, 2016. The inspection and processing circumstances of specific cases should be reported in a timely manner.

5. All levels of food and drug administration departments shall strengthen their organization and leadership role to the concentrated rectification work, implement their supervision duties, grasp the discipline work, and seriously strike the illegal business activities in drug distribution. The National Food and Drug Administration shall inspect the centralized rectification work carried out in all places and spot check the self-inspection and rectification circumstances of the enterprise. The food and drug administration authorities shall praise those units and individuals that find more problems and dare to process the problem resolutely; circulate a notice to criticize those enterprises that do not carry out the rectification work well and even investigate the accountabilities of the relevant personnel.

6. We should actively give play to the role of social supervision and encourage the public to report the violations of enterprises. The report behavior shall be awarded according to the provisions once the truth is verified. National Informants’ Hot-line Telephone Number: 12331.

7. Provinces (autonomous regions, municipalities) that have made arrangements on the rectification work can continue their rectification work by combining this announcement. Where the rectification content is less than what is required in this announcement, the province (autonomous region, municipality) should implement according to this announcement; their work schedule can be carried out according to the original plan; but the final deadline for reporting and submitting the rectification circumstance shall be subject to this announcement.

8. For the problems found in the concentrated rectification, the National Food and Drug Administration shall further deepen the reform of the drug circulation system, constantly improve the supervision system, implement the enterprise drug supply guarantee responsibility, drug quality responsibility and channel safety responsibility, effectively regulate the order of drug circulation, guarantee drug supply and public medication safety.

China National Food and Drug Administration

April 29, 2016