The company of chain pharmacy giant Gao Ji Pharmaceutical was fined for violating the law and faced hidden worries about capacity building after "running around the land"

China Times (www.chinatimes.net.cn) reporter Yu Na reported in Beijing

According to the administrative penalty decision recently published on the website of the Beijing Municipal Market Supervision and Administration Bureau (Jingchang Municipal Supervision and Punishment [2022] No. 28), the fifth branch of Beijing Zhuyou Health Pharmaceutical Co., Ltd. was fined 10,000 yuan by the Beijing Changping District Market Supervision and Administration Bureau for illegal operation.

According to the administrative penalty decision, the fifth branch of Beijing Zhuyou Health Pharmaceutical Co., Ltd. sold disposable injection pen needles beyond the business scope of its Medical Device Business License without applying to the regulatory authorities for the record.

According to public information, Beijing Zhuyou Health Pharmaceutical Co., Ltd. has been renamed "Beijing Gaoyuan Baikang Zhuyou Health Pharmaceutical Co., Ltd." on March 22, 2021, and later renamed "Beijing Gaoyuan Baikang ShanshuiDa Pharmacy Co., Ltd." on December 1, 2021.

For the reasons for not filing illegal medical devices in accordance with the law, the staff of Beijing Gaoyuan Baikang ShanshuiDa Pharmacy Co., Ltd. told the "China Times" reporter that because the manufacturer of the disposable injection pen needle involved changed the product registration certificate number, the pharmacy did not declare the change in time, and now their pharmacy has no longer sold the product.

According to Tianyan, Beijing Gaoyuan Baikang Shanshuida Pharmacy Co., Ltd. is a grandson company of Gaoji Pharmaceutical Co., Ltd., which is a wholly-owned subsidiary of Gaoji (Tianjin) Investment Co., Ltd., which also belongs to Gaoji Medical Group under Hillhouse Capital. Since the second half of 2019, Gaoji Medical has strongly intervened in the domestic chain pharmacy integration market, including more than 10,000 retail pharmacies under its command, and expanding into a giant in China's chain pharmacy industry in a short period of time.

However, Gaoji Medical has now slowed down the pace of expansion and faces hidden concerns brought about by large-scale integration mergers and acquisitions. Zhou Shu, a strategic consultant for the pharmaceutical industry, told the "China Times" reporter that after the temporary ebb and flow of mergers and acquisitions of chain pharmacies, in the face of a huge number of pharmacy chains, how to give full play to the advantages of collection prices, strengthen the information system, capacity building and compliance operations are further challenges.

Medical devices that exceed the scope of operation are fined

After investigation, the fifth branch of Beijing Zhuyou Health Pharmaceutical Co., Ltd. has obtained the "Business License" and "Medical Device Business License", and the business scope is: 2002 Edition Classification Catalogue, Class III: 6815, 6822 (limited to the sale of soft corneal contact lens nursing fluid).

On October 23, 2021, the fifth branch of Beijing Zhuyou Health Pharmaceutical Co., Ltd. purchased 10 boxes of "New YouruiTM disposable injection pen needle" (specification: specification: 0.25x5mm, registration certificate number: National Machinery Injection 20153140675), as of November 23, 2021 sold 4 boxes, now there are 6 boxes left, the above products belong to the 2017 edition of the classification catalog: III. class: 14 injection, nursing and protective equipment, and its "Medical Device Business License" The scope of business does not include the above scope.

The first, second and third categories of medical devices are classified according to their safety of use, and the three categories refer to medical devices implanted in the human body; used to support and maintain life; potentially dangerous to the human body, and their safety and effectiveness must be strictly controlled. Generally, the State Food and Drug Administration will examine and approve and issue registration certificates.

According to the provisions of the Measures for the Supervision and Administration of Medical Device Business, if the licensing matters are changed, an application for the modification of the Medical Device Business License shall be submitted to the original licensing department, and the relevant materials related to the content of the change in Article 8 of these Measures shall be submitted. The original licensing department shall conduct a review within 15 working days from the date of receipt of the change application and make a decision to approve the change or not to change; if it is necessary to carry out on-site verification in accordance with the requirements of the medical device business quality management standards, a decision to approve the change or not to change is made within 30 working days from the date of receipt of the change application.

At the same time, it is stipulated that if a medical device trading enterprise changes the business premises or warehouse address, expands the business scope or sets up a warehouse without authorization, the food and drug supervision and administration department at or above the county level shall order corrections and impose a fine of between 10,000 and 30,000 yuan.

On January 11, the Beijing Changping District Market Supervision and Administration Bureau made a penalty decision against the fifth branch of Beijing Zhuyou Health Pharmaceutical Co., Ltd., believing that the above-mentioned acts violated the relevant provisions of the Measures for the Supervision and Administration of Medical Device Business, ordering the parties concerned to correct the above illegal acts and fining them 10,000 yuan.

How to improve construction capacity after rapid expansion

According to the information of Tianyancha, Beijing Gaoyuan Baikang Shanshuida Pharmacy Co., Ltd. is a wholly-owned subsidiary of Beijing Gaoyuan Baikangda Pharmacy Co., Ltd., the major shareholder of Beijing Gaoyuan Baikangda Pharmacy Co., Ltd. is Gaoji Pharmaceutical Co., Ltd., with a shareholding ratio of 51%, and Gaoji Pharmaceutical Co., Ltd. is a wholly-owned subsidiary of Gaoji (Tianjin) Investment Co., Ltd., and the above-mentioned companies belong to Gaoji Medical Group. GaoJi Medical is an industrial company under Hillhouse Capital that focuses on strategic investment and operation in the field of big health.

According to the official website of Gaoji Medical, Gaoji Medical is a medical health industry group focusing on strategic investment and operation in the field of big health. Build China's first community and Internet medical service brand.

In fact, in less than two years, Gaoji Medical, with tens of billions of funds, has acquired more than 11,600 retail pharmacies in the country, distributed in 21 provinces and municipalities directly under the central government, ranking among the first brothers in the industry. This speed has amazed the entire industry at the same time, there are also voices of doubt, in such a short period of time to acquire tens of thousands of pharmacies, become a national chain of pharmacy giants, Gao Ji can ensure the quality and ability system construction?

In May this year, the National Medical Insurance Bureau and the National Health Commission jointly issued the Guiding Opinions on Establishing and Improving the "Dual Channel" Management Mechanism for Drugs Negotiated by The National Medical Insurance (hereinafter referred to as the "Guiding Opinions"), which for the first time included designated retail pharmacies in the scope of supply guarantee of medical insurance drugs from the national level, to meet the reasonable needs of negotiated drug supply guarantee and clinical use, and to include them in medical insurance payment at the same time. The "dual channel" policy is called the spring of retail pharmacies represented by GaoJi Medical in the industry.

However, Zhou Shu believes that for designated retail pharmacies that meet the "dual channel" management, this policy also puts forward higher requirements for drug management and compliance operation of pharmacies, especially after large-scale market integration mergers and acquisitions, strengthening the capacity building of retail pharmacies themselves has become the focus.

For how to strengthen the capacity building and compliance operation of its chain pharmacies, the reporter of China Times contacted and interviewed Gao Ji Medical, and as of press time, it has not received a reply.