Measures for the Supervision and Management of Drug Distribution and Use Quality

Measures for the Supervision and Management of Drug Distribution and Use Quality
Measures for the Supervision and Management of Drug Distribution and Use Quality

Order of the State Administration for Market Regulation No.84

September 27, 2023

(Promulgated by Order of the State Administration for Market Regulation No.84 on September 27, 2023, and effective as of January 1, 2024)

Chapter I General Provisions

Article 1 The Measures are formulated in accordance with the Drug Administration Law of the People's Republic of China (the "Drug Administration Law"), the Vaccine Administration Law of the People's Republic of China, the Implementing Regulations of the Drug Administration Law of the People's Republic of China, and other laws and administrative regulations, to strengthen the supervision and management of drug distribution and use quality, and regulate the management of drug distribution and use quality.

Article 2 The management of drug distribution and use quality and supervision and management thereof in the territory of the People's Republic of China shall comply with the Measures.

Article 3 Those engaged in drug wholesale or retail activities shall obtain a drug distribution license in accordance with the law upon approval by the medical products administration, and strictly abide by the laws, regulations, rules, standards and norms.
A marketing authorization holder ("MAH") may sell any drug for which the drug registration certificate has been obtained by itself, or contract a drug distributor to do so. However, a MAH engaging in drug retail activities shall obtain a drug distribution license.
Other entities engaging in drug storage, transport or other related activities shall comply with the relevant provisions hereof.

Article 4 A medical institution shall establish a drug quality management system, responsible for the drug quality management of the entity in the whole process of drug purchase, storage and use. A medical institution using radioactive drugs and other drugs subject to special control shall obtain the relevant licensing for their use in accordance with regulations.
Drug users other than medical institutions shall comply with the provisions of the Measures on the drug quality management of the medical institution in the whole process of drug purchase, storage and use.

Article 5 MAHs, drug distributors and medical institutions shall comply with the uniform drug traceability standards and practices formulated by the National Medical Products Administration (the "NMPA"), establish and implement a drug traceability system, and provide drug traceability information as required to ensure the traceability of drugs.

Article 6 The NMPA shall be responsible for the supervision and management of drug distribution and use quality nationwide, and direct the supervision and management of drug distribution and use quality carried out by medical products administrations of provinces, autonomous regions and municipalities directly under the Central Government.
Medical products administrations of provinces, autonomous regions and municipalities directly under the Central Government shall be responsible for the supervision and management of drug distribution and use quality within their respective administrative regions, and for the licensing, inspection and penalization of drug wholesalers and drug retail chain headquarters as well as for the inspection and penalization of the sales practices of MAHs, and shall, to the extent of their respective mandate, direct the supervision and management of drug distribution and use quality carried out by the departments in charge of drug supervision and management under people's governments of cities with subordinate districts or counties (the "medical products administrations at the city or county level").
Medical products administrations at the city or county level shall be responsible for the supervision and management of drug distribution and use quality within their respective administrative regions, and for the licensing, inspection and penalization of drug retailers as well as for the inspection and penalization for drug quality during usage.
The State Administration for Market Regulation (the "SAMR") shall enhance the guidance of the comprehensive law enforcement team in charge of market regulation in accordance with the relevant provisions.

Article 7 The NMPA shall develop the Good Supply Practice for Pharmaceutical Products (the "GSP") and the Guiding Principles for On-site Inspection under the GSP. Medical products administrations of provinces, autonomous regions and municipalities directly under the Central Government may formulate the detailed rules for inspection in accordance with the Measures, the GSP and the Guiding Principles for On-site Inspection under the GSP and in light of the actual condition of their respective administrative regions.

Chapter II Distribution Licensing

Article 8 Those engaged in drug wholesale activities shall meet the following conditions:
(1) they have a quality management organization or personnel commensurate with their distribution scope; and the legal representative, the main principal, the person in charge of quality and the person in charge of their quality management department shall comply with the prescribed requirements;
(2) they are staffed by legally qualified pharmacists or other pharmaceutical technicians;
(3)they are equipped with private warehouses, business premises, facilities and equipment commensurate with the varieties of drugs to be distributed by them and their distribution scale, and the warehouses are equipped with modern logistics facilities and equipment to satisfy the requirements of drug entry, transfer, sorting, shelving, and ex-warehouse; and
(4) they have in place a quality management system for guaranteeing drug quality and an information management system covering the whole process of drug distribution, quality control and traceability, and meets the requirements of the GSP.

Article 9 To engage in drug retail chain operation activities, a drug retail chain headquarters shall be established to manage retail stores in a unified manner. A drug retail chain headquarters shall meet the conditions stipulated in Items 1, 2 and 4 of Article 8 hereof, and be equipped with warehouses, distribution premises, facilities and equipment that can guarantee the drug quality and are commensurate with the varieties of drugs to be distributed by it and its distribution scale.

Article 10 Those engaged in drug retail activities shall meet the following conditions:
(1) if they distribute prescription drugs or Class A over-the-counter drugs, they shall, as required, be staffed by legally qualified pharmacists or other pharmaceutical technicians commensurate with their distribution scope and the varieties of drugs to be distributed by them; and they may be staffed by drug salespersons who have passed the examination organized by the medical products administration at the level of city with subordinate districts, if it distributes Class B over-the-counter drugs;
(2) they are equipped with business premises, equipment and facilities for display and storage and a healthy environment commensurate with the drugs to be distributed by them; if they simultaneously distribute other (non-pharmaceutical) goods, they shall have separate facilities for the display and storage of non-pharmaceutical goods from those for drugs; they shall have a separate business area when engaging in drug retail activities in supermarkets and other premises;
(3) they have a quality management body or personnel commensurate with the drugs to be distributed by them, and their legal representative, main principal and person in charge of quality comply with the prescribed requirements; and
(4) they have in place a quality management system for guaranteeing drug quality and an information management system addressing quality management and traceability requirements, and meets the requirements of the GSP.

Article 11 Where a drug distributor is established, it shall, after obtaining a business license, file an application for a drug distribution license with the local medical products administration at or above the county level, and submit the following materials:
(1) an application for a drug distribution license;
(2) the information on the quality management organization, and relevant materials of the educational qualifications and work experience regarding the main principal, the person in charge of quality and the person in charge of the quality management department;
(3) qualification certificates and documents of appointment for pharmacists or other pharmaceutical technicians;
(4) materials relating to the drug distribution mode and scope;
(5) rules and regulations on the drug quality management and a list of key facilities and equipment for display and storage;
(6) the information on the business premises, equipment, facilities for storage and sanitary conditions in the surrounding environment, the floor plan drawings for the business premises and warehouses, and certification demonstrating the ownership of or right to use the buildings concerned; and
(7) other materials prescribed by laws and regulations.
The applicant shall be responsible for the authenticity of all application materials that it provides.
The applicant shall mark the trade secrets, undisclosed information or confidential business information in the application materials and provide the basis therefor in accordance with the relevant national regulations.

Article 12 Upon receipt of an application for a drug distribution license, the medical products administration shall handle the application in the following manners:
(1) if the application items do not require a drug distribution license, it shall immediately inform the applicant that the application will not be accepted;
(2) if the applied items are beyond its competence, it shall promptly make the decision of non-acceptance and inform the applicant to file an application with the relevant administrative authority;
(3) if the application materials contain errors that may be corrected on the spot, it shall permit the applicant to correct them on the spot;
(4) if the application materials are not complete or do not conform to the requirements of formal examination, it shall issue a notice for supplementation/correction of materials to the applicant on the spot or within five days and give a one-time notification to the applicant of all the contents that need to be supplemented/corrected. Failure to give such notification within the specified time limit shall be deemed as having accepted the application as of the date of receipt of the application materials; or
(5) if the application materials are complete and conform to the requirements of formal examination, or the applicant has submitted all the supplementary/corrective materials as required, it shall accept the application for a drug distribution license.
If the medical products administration accepts or refuses to accept the application for a drug distribution license, it shall issue a notice of acceptance or a notice of rejection with its special seal affixed and the date indicated.

Article 13 The medical products administration shall make a decision within 20 days from the date of acceptance.
The medical products administration shall organize and carry out the technical review and on-site inspection of the application materials in accordance with the GSP and the Guiding Principles for On-site Inspection under the GSP, the detailed rules for inspection and other relevant provisions.
If the application meets the conditions upon technical review and on-site inspection, the medical products administration shall approve the granting of a license and issue a drug distribution license within five days from the date of making the decision of approval; if it does not meet the conditions, the medical products administration shall make a written decision of disapproval to grant a license, and state the reasons therefor.
If an applicant only engaging in the retail activities of Class B over-the-counter drugs meets the conditions after submitting the application materials and the letter of commitment, the medical products administration shall approve its application and issue a drug distribution license to it on the current date.
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