Running a pharmaceutical wholesaler is an activity subject to extremely detailed legal requirements. Obtaining the appropriate permit is not an easy task. Unfortunately for entities holding such permits, there are a number of situations in which such a permit to operate a wholesale store may be lost. This article describes the basic conditions for starting the described business activity and, more broadly, the circumstances in which the permit to operate a pharmaceutical wholesale store may be withdrawn. We also draw readers' attention to the most important mistakes that people running pharmaceutical wholesalers should avoid.
How to obtain a permit to run a pharmaceutical wholesale store?
Operating a pharmaceutical wholesale business requires a licence from the Chief Pharmaceutical Inspector (hereinafter: GIF) (Article 74(1) of the Pharmaceutical Law – hereinafter: the Pharmaceutical Law). This authorisation is granted by way of a decision; consequently, it is governed – to a certain extent – not only by the provisions of the Pharmaceutical Law, but also the Code of Administrative Procedure and, in certain cases, the Law on Proceedings before Administrative Courts (hereinafter: PPSA). It is important to note that if a business operator plans to engage in the wholesale trade of narcotic drugs, psychotropic substances and Category 1 precursors, they are required to obtain an additional licence as specified in the Act of 19 July 2005 on Combating Drug Addiction. This aspect should never be overlooked by manufacturers who wish to include the aforementioned range of substances in their business activities. Furthermore, a licence to operate a pharmaceutical wholesale business is, unfortunately, subject to a fee – in accordance with the Regulation of the Minister of Health of 15 September on the amount of fees for granting a licence to operate a pharmaceutical wholesale business, the fee is 6,756 PLN, whilst amending such a licence costs half that amount (3,378 PLN). The entire procedure is application-based; therefore, obtaining a licence to operate a pharmaceutical wholesale business requires the submission to the GIF of an application as described in Article 75 of the Pharmaceutical Law. Articles 75–79 of the Pharmaceutical Act set out the detailed requirements to be met both by the application itself and by the business operator running the pharmaceutical wholesale business; however, this is beyond the scope of this article. It should be noted here, however, that in accordance with Article 80(1)(1) of the Pharmaceutical Law, failure to meet the formal requirements set out in Articles 77–79 of the Pharmaceutical Law constitutes an absolute ground for refusing to grant a licence to operate a pharmaceutical wholesale business. The Act also sets out a number of specific requirements for an operator of a pharmaceutical wholesale business, which must be met both at the stage of obtaining the licence and whilst carrying out the business. Failure to meet these requirements may result in the licence being refused or, at a later stage, in its revocation – as discussed in detail below.
Loss of permission to run a pharmaceutical wholesale store
As already mentioned, running a pharmaceutical wholesale store is subject to many, sometimes detailed, legal requirements. Failure to comply with them may, in extreme cases, even result in the GIF withdrawing the permit. The starting point for the analysis of the discussed issue is Art. 81 pr. farm., describing the grounds for withdrawing the permit to operate a pharmaceutical wholesale store and Art. 37ap pr. farms, relating to all permits described in the Act (including, for example, those for running a pharmacy). These conditions can be divided into mandatory ones, i.e. those which, if they exist, oblige the GIF to withdraw the permit, and optional ones, which only constitute the competence (and not an order) of the GIF to withdraw the permit.
Mandatory grounds for withdrawal of a permit
- The entrepreneur's trade in medicinal products not authorized for marketing;
- The entrepreneur's export or sale of medicinal products included in the list of medicinal products, foodstuffs intended for particular nutritional uses and medical devices at risk of lack of availability in the territory of the Republic of Poland without prior notification of this fact to the GIF;
- The entrepreneur's export or sale of medicinal products included in the list of medicinal products, foodstuffs intended for particular nutritional uses and medical devices at risk of lack of availability in the territory of the Republic of Poland before the deadline for filing an objection by the GIF (30 days from the notification of the intention to export or sell)* ;
- The entrepreneur's export or sale of medicinal products included in the list of medicinal products, foodstuffs for particular nutritional uses and medical devices at risk of lack of availability in the territory of the Republic of Poland, despite the objection of GIF;
- Issuance of a final and binding decision prohibiting the entrepreneur from conducting the business activity covered by the permit;
- Failure by the entrepreneur (also occurring during the validity of the permit) to meet the conditions specified in law that are required to conduct the business activity specified in the permit;
- Failure by the entrepreneur to remove, within the deadline set by the GIF, a factual or legal situation that is inconsistent with the provisions of law regulating the business activity covered by the permit.
in accordance with Article 81(1a) of the Pharmaceutical Law, if the scale of this infringement is negligible, the GIF may refrain from revoking the permit. To this extent, therefore, this condition is "semi-mandatory" in nature. In this respect, particularly important attention should be paid to premise no. 6. It results from Art. 37ap pr. farm. and is characterized by a very high level of generality. De facto this premise states that any serious infringement consisting in failure to meet the requirements provided for by law may result in the withdrawal of the permit. In such cases, the scale of the entrepreneur's faults will certainly be taken into account, so it is advisable to thoroughly familiarize yourself with the obligations that an entrepreneur running a pharmaceutical wholesale store should fulfill.
Optional grounds for withdrawing the permit
- Preventing or hindering, despite prior notice, the performance of official activities by the State Pharmaceutical Inspectorate by an entrepreneur covered by the permit;
- The entrepreneur stores medicinal products contrary to the terms of the marketing authorization;
- Failure of the entrepreneur to commence the activity covered by the permit within 4 months from the date of obtaining the permit or failure to conduct the activity covered by the permit for a period of at least 6 months;
- Failure by the entrepreneur to fulfill the obligations referred to in Art. 77, art. 77a section 5 and art. 78 section 1;
- Violation by the entrepreneur of the provisions of Art. 36z in relation to reimbursed medicinal products (obligation to ensure the availability of reimbursed medicinal products in pharmacies and appropriate information obligations);
- Failure of the entrepreneur to submit an application to change the permit referred to in Art. 78 section 1 point 13;
- The entrepreneur conducting activities in the wholesale store other than those specified in the permit and in Art. 72 section 5-7.
The withdrawal of the permit in this case depends on the GIF's assessment of the scale of the violations. If it is not high, the GIF should limit itself to calling for the removal of deficiencies resulting from the control/inspection, e.g. under Art. 120 pr. farm. However, please remember that failure to remove them may result in mandatory withdrawal of the permit, so treat them with the utmost care! (seventh obligatory premise – Article 37ap of the Farm Law).
Important!
The GIF may (this is not a mandatory action) revoke the permission to operate a pharmaceutical wholesale business in relation to other (all!) pharmaceutical wholesale businesses of a given entrepreneur, if in one of them the basis for revoking the permission is the entrepreneur's trading in medicinal products not authorised for trading or failure to fulfil obligations referred to in Art. 77, Art. 77a(5) and Art. 78(1) of the Pharmaceutical Law. This is also confirmed by the Judgment of the Supreme Administrative Court of 27 November 2019, II GSK 679/18, which clearly establishes that the obligations described above relate to the given entrepreneur, not the given wholesale business, and should be assessed as such. Moreover, the loss of a permit results in the inability to apply for another permit to operate a pharmaceutical wholesale business (and pharmacy) within a period of 3 years (Art. 80(1)(2) of the Pharmaceutical Law). This means that in the case of the most serious infringements, the GIF may revoke all permits to operate pharmaceutical wholesale businesses for a given entrepreneur, thereby excluding them from the market for a period of 3 years.
What should you pay special attention to?
First and foremost, the procedure that controlling authorities (PIF, GIF) pay the most attention to must be described. This concerns actions involving the export of medicinal products abroad, particularly those on the list of medicinal products, foodstuffs for special medical purposes, and medical devices at risk of unavailability in the Republic of Poland. It is not without reason that their export or disposal without observing legally prescribed conditions constitutes grounds for the mandatory revocation of a licence to operate a pharmaceutical wholesaler. Deficit medicinal products are usually characterised by low availability in other countries as well, so the potential prospect of selling them abroad is financially attractive. However, such transactions always attract particular attention from the GIF. If an entrepreneur plans to conduct their business in the aforementioned area, they should approach all transactions with extreme caution and never lose sight of the content of Chapter 2c (Art. 37av of the Pharmaceutical Law and subsequent articles) concerning the monitoring of the transport of medicinal products, foodstuffs for special medical purposes, and medical devices at risk of unavailability in the Republic of Poland.
Furthermore, and this is somewhat trivial even for someone unfamiliar with the relevant legal provisions, mention must also be made of not trading in medicinal products which have not been authorised for trade. This condition is exceptionally unambiguous and also constitutes an obligatory basis for revoking a licence. It should be clarified at this point that unauthorised products include both those that do not possess an authorisation for marketing within the territory of the Republic of Poland issued according to national procedures (resulting from pharmaceutical law) or EU procedures, as well as those for which a decision to withdraw them from trade has been issued.
Furthermore, the concept of "turnover" also includes the storage of products, so the GIF will have the obligation to withdraw authorisation even in situations where a wholesaler, although not distributing a medicinal product that is unavailable for turnover, is merely storing it. Therefore, urgent monitoring of the products held by a given wholesaler should be one of the key aspects in the planning of that entrepreneur's work.
Another significant obligation, which may also be difficult to fulfil due to the attractive business model, is the one arising from Article 36z of the Pharmaceutical Law, i.e., the obligation to ensure the availability of medicinal products. In accordance with its provisions, entrepreneurs running pharmaceutical wholesale depots are obliged to ensure the uninterrupted supply of medicinal products to pharmacies in quantities corresponding to the needs of patients. Failure to comply with this obligation, particularly regarding reimbursed products, may be grounds for revoking the licence. However, it is often the case that from a financial perspective, distribution elsewhere or even abroad (as mentioned earlier) is more profitable.
It is therefore important to conduct business in a way that does not breach this obligation. Another ground for losing a licence, which may seem insignificant but can have unpleasant consequences, is preventing or hindering the performance of official duties by the State Pharmaceutical Inspectorate. This primarily concerns a lack of cooperation with control bodies during inspections – not answering questions, not providing necessary documentation, etc. These are seemingly trivial actions, but neglecting them – perhaps also out of fear of the potential consequences of an inspection – can have disastrous results.
Therefore, regardless of any shortcomings that may be discovered during the inspection procedure, if you want to protect yourself against losing your license to run a pharmaceutical wholesale store, you should first of all cooperate with inspectors.
Indeed, it is often simpler to reverse the consequences of shortcomings found during inspections than to save oneself from the effects of licence withdrawal due to, for example, a failure to provide documentation. It is not possible to create a comprehensive guide covering all eventualities on what mistakes to avoid in the operation of a pharmaceutical wholesaler, so we present our final piece of advice here. This concerns the regulations on the storage of medicinal products. According to the second optional premise, a licence may be withdrawn if the entrepreneur stores medicinal products in breach of the conditions for their marketing authorisation. This basis is, however, indeterminate and requires reference to detailed provisions. The rules for the storage of medicinal products are described in the implementing regulation to Article 79 of the Pharmaceutical Law, which sets out the procedures for Good Distribution Practice. Compliance with these should ensure that the inspection has no grounds to criticise the entrepreneur.
This article provides a general overview of the issues described. Providing detailed information or analysis of specific cases requires an individual consultation. a law firm specializing in pharmaceutical law - for example ours. Please contact us, we are already quite advanced in the process of building our own database of GIF decisions in matters relating to the withdrawal of a license to operate a pharmaceutical wholesale store. We will be happy to support you with our conclusions from their analysis.