Drug distribution: Is this drug wholesale company punished?
August 03 07:19:52, 2025
During a routine inspection, a drug regulatory bureau discovered that a pharmaceutical wholesale company, Company A, had purchased seven types of drugs directly from five manufacturers, with a total value of 10,000 yuan. Due to concerns about the authenticity of the purchase and sales records, the bureau sent an investigation letter to the local regulatory authority. The response indicated that none of the five manufacturers had issued such a list. As a result, the case was classified as illegal drug procurement.
Further investigation revealed that Company A claimed it had thoroughly reviewed the production licenses, GMP certificates, and other relevant documents when purchasing the drugs. It also verified the drug information online, confirming that the products were not counterfeit. The company believed the salesman was genuinely authorized by the manufacturer. However, it later emerged that the salesman had forged official seals of multiple manufacturers, created fake purchase lists, and sold the drugs to Company A under the manufacturers' names.
Company A argued that it had fulfilled its due diligence obligations during the procurement process and was unaware that the salesman had forged the official seal. Therefore, it found it difficult to accept the classification of the transaction as illegal. Some internal staff at the SFDA suggested that Company A had no direct responsibility and should not be penalized.
Arguments over the case varied. Some believed that while Company A should be punished, Article 27 of the Administrative Punishment Law could allow for discretion or even exemption from punishment. Others emphasized the need to focus on the salesman’s illegal activities, including unlicensed operations and the crime of forging corporate seals.
Some critics pointed out that according to Article 5 of the Regulations on the Administration of Drug Circulation, the manufacturer is responsible for the actions of its salesperson. If this logic holds, why would a wholesale company be considered as purchasing from an illegal source? It was suggested that the "legal liability" in the regulations refers more to civil than administrative responsibility.
Another angle raised was whether Company A had engaged in tax evasion or fraud. It was questioned whether the company needed to obtain tax invoices for drug purchases, and whether the collaboration between the drug supervision and tax departments could uncover potential violations.
Critics also noted that in today’s digital age, using fax or online communication should not be a problem. Unless there was deliberate fraud, it was unlikely that Company A would have failed to verify the legitimacy of the transaction.
Some argued that Company A had not fully fulfilled its duty to review the salesperson's qualifications and the companies involved. According to Article 9 of the Measures for the Administration of Drug Circulation, pharmaceutical companies are only allowed to sell their own produced drugs and cannot sell those from third parties.
From a broader perspective, the GSP requires a review of the legality of the supply chain, not just the completeness of documentation. Company A appeared to have violated these standards. Questions remained: Did the salesman deliver the drugs directly? Who paid for them? Were they shipped with proper documentation? Could one individual act as a sales representative for five different manufacturers?
The core issue was whether Company A’s review process ensured that the drugs came from legal sources. Even if the drugs passed inspection, it did not guarantee they were legally produced. Company A had only checked information online, which was insufficient to confirm the authenticity of the supplier and the product.
If Company A was not punished, it could set a dangerous precedent. Other companies might follow suit, relying solely on online verification and bypassing proper procedures. This could lead to counterfeit and substandard drugs entering the market. If the company can avoid punishment by claiming it “reviewed the information,†then who ensures the safety of medicine for the public?