Drug distribution: Is this drug wholesale company punished?
August 03 07:19:40, 2025
During a routine inspection, a drug regulatory bureau discovered that pharmaceutical wholesale company A had purchased seven types of drugs directly from five manufacturers, with a total value of 10,000 yuan. Due to concerns over the authenticity of the purchase and sales records, the bureau issued an investigation letter to the local regulatory authority. The response indicated that the five manufacturers had never issued such documents, leading to the classification of the transaction as illegal procurement of medicines.
Further investigation revealed that Company A claimed it had conducted thorough due diligence when purchasing the drugs, including checking production licenses, GMP certificates, and verifying drug information online to confirm they were genuine. The company also stated that the salesperson was indeed authorized by the manufacturer. However, it later emerged that the salesman had forged official seals and created fake purchase lists, selling the drugs under the manufacturers’ names without their knowledge.
Company A argued that it had fulfilled its responsibility in reviewing the legitimacy of the suppliers and was unaware of the fraudulent activity. Some internal staff at the SFDA believed that the company should not be penalized, as it had no direct involvement in the fraud. However, others emphasized that the company still bore some responsibility for failing to verify the authenticity of the salesperson and the documents thoroughly.
One key debate centered on whether Article 27 of the Administrative Punishment Law could be applied to reduce or exempt the penalty, considering the company's lack of intent. Others pointed out that while the manufacturer is legally responsible for its sales representatives, this does not absolve the company from ensuring that its supply chain is legitimate under administrative law. The term "legal responsibility" in the Drug Circulation Regulations may refer more to civil liability than criminal or administrative accountability.
Another concern raised was the possibility of tax evasion. Did Company A obtain proper invoices for the drugs? This issue suggests that collaboration between the drug regulatory department and tax authorities might be necessary. Additionally, in today’s digital age, using fax or other communication tools would have been more standard than relying solely on verbal assurances.
Critics argued that Company A did not fully fulfill its obligation to review the qualifications of the salespersons and the companies involved. According to the Measures for the Administration of Drug Circulation, pharmaceutical producers are only allowed to sell their own products, not those produced by others. If a salesperson is selling drugs from multiple manufacturers, it raises serious red flags about the company’s due diligence process.
The GSP (Good Supply Practice) requires a review of legality, not just the completeness of documents. Company A appeared to have failed to meet these standards. Questions remain: Were the drugs delivered directly by the salesman? Who paid for them? Was there any documentation confirming the transaction? Could one individual represent five different manufacturers?
Ultimately, the core issue is whether the company’s due diligence was sufficient to ensure that the drugs came from legal sources. Even if the drugs passed inspection, the source remains questionable. If Company A is not punished, it sets a dangerous precedent, allowing similar practices to continue unchecked. This could lead to counterfeit drugs entering the market, undermining public trust in the pharmaceutical system. It is essential to hold companies accountable for their role in ensuring the safety and legality of the medicines they distribute.