Compliance to Affect Credit Rating

February 21, 2005

The State Food and Drug Administration (SFDA) has issued the Interim Provisions for Drug Safety Credit Classification to strengthen the supervision of pharmaceutical companies in China...

The State Food and Drug Administration (SFDA) has issued the Interim Provisions for Drug Safety Credit Classification to strengthen the supervision of pharmaceutical companies in China. The new regulation, which will affect all domestic and foreign drug companies including manufacturers, distributors and R&D units, will enable drug administration officials to inspect facilities to determine compliance levels with current Chinese pharmaceutical laws and regulations. Following an inspection, each site will be assigned one of four categories ranging from 'is in compliance' to 'has received numerous warnings and has made no effort to comply', which in turn will result in an increase or decrease in the company?s credit rating.
Furthermore, SFDA will also set up credit information files to keep a record of credit ratings of pharmaceutical companies. Those companies that are awarded the lowest rating will not only receive a reduced credit rating, they will also be issued with warnings and subject to higher levels of supervision and inspection by local drug administration officials. However, if such companies do not violate any pharmaceutical regulations for 1 year, they can be promoted to a higher credit level.
www.sfda.gov.cn