Losing a license to run a pharmaceutical wholesale store - mistakes you should avoid

Permission to operate a pharmaceutical wholesale store
Krzysztof Bardel|
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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activity and, more broadly, the circumstances in which the permit to operate a pharmaceutical wholesale store may be withdrawn.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?

Running a pharmaceutical wholesale store requires obtaining a permit from the Chief Pharmaceutical Inspector (hereinafter: GIF) (Article 74(1) of the Pharmaceutical Law Act - hereinafter referred to as the Pharmaceutical Law). It is granted by way of a decision, so it will apply - to a specific extent - not only the provisions of the Act. farm., but also the Code of Administrative Procedure, and in certain cases also the Law on Proceedings before Administrative Courts (hereinafter: PPSA).

Importantly, if a given entrepreneur plans to conduct wholesale trade in narcotic drugs, psychotropic substances and precursors of category 1, it is required to obtain an additional permit specified in the Act of July 19, 2005 on counteracting drug addiction. This aspect should never be ignored by producers who want to include the described range of substances in their activities.

Unfortunately, a permit to operate a pharmaceutical wholesale store is also obtained in a paid procedure - in accordance with the Regulation of the Minister of Health of September 15 on the fees for granting a permit to run a pharmaceutical wholesale store, it is PLN 6,756, and changing such a permit is half of this amount (PLN 3,378).

The entire procedure is application-based, so obtaining a permit to operate a pharmaceutical wholesale store requires submission to the GIF described in Art. 75 pr. farm. application. Articles 75-79 of the Law farm. specify detailed requirements that should be met by both the application itself and the entrepreneur running the pharmaceutical wholesaler, which, however, remains outside the focus of this article. However, it should be mentioned here that in accordance with Art. 80 section 1 point 1 pr. farm. failure to meet the formal conditions described in Art. 77-79 pr. farm. is an absolute basis for refusing to grant a permit to operate a pharmaceutical wholesale store.

The Act also provides for a number of detailed requirements for an entrepreneur running a pharmaceutical wholesaler, which he must meet both at the stage of obtaining a permit and during the course of running his business. Failure to meet them may result in a refusal to obtain a permit or, at a later date, in its loss - which will be discussed in detail later.

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

  1. The entrepreneur's trade in medicinal products not authorized for marketing;
  2. 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;
  3. 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)* ;
  4. 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;
  5. Issuance of a final and binding decision prohibiting the entrepreneur from conducting the business activity covered by the permit;
  6. 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;
  7. 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 art. 81 section 1a pr. farm. if the scale of this violation is negligible, GIF may refrain from withdrawing the permit. Therefore, in this respect, this condition is "semi-obligatory".

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

  1. Preventing or hindering, despite prior notice, the performance of official activities by the State Pharmaceutical Inspectorate by an entrepreneur covered by the permit;
  2. The entrepreneur stores medicinal products contrary to the terms of the marketing authorization;
  3. 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;
  4. Failure by the entrepreneur to fulfill the obligations referred to in Art. 77, art. 77a section 5 and art. 78 section 1;
  5. 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);
  6. Failure of the entrepreneur to submit an application to change the permit referred to in Art. 78 section 1 point 13;
  7. 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!

GIF may (this is not an obligatory action) withdraw the authorization to operate a pharmaceutical wholesale store in relation to other (all!) pharmaceutical wholesale stores of a given entrepreneur, if in one of them the basis for withdrawing the authorization is the entrepreneur's trading in medicinal products not authorized for trading or failure to fulfill obligations, referred to in Art. 77, art. 77a section 5 and art. 78 section 1 pr. farm. This is also confirmed by the Judgment of the Supreme Administrative Court of November 27, 2019, II GSK 679/18, which clearly states that the obligations described above apply to a given entrepreneur, not a given wholesaler, and should be assessed as such.

Moreover, the loss of the permit makes it impossible to apply for another permit to operate a pharmaceutical wholesale store (and a pharmacy) within 3 years (Article 80(1)(2) of the Farm Law).

This means that in the event of the most serious infringements, GIF may withdraw all permits for operating pharmaceutical wholesalers for a given entrepreneur, thereby excluding him from the market for a period of 3 years.

What should you pay special attention to?

First of all, it is necessary to describe the procedure to which the control authorities (PIF, GIF) pay the greatest attention. This concerns the export of medicinal products abroad, especially those included in the list of medicinal products, foodstuffs for particular nutritional uses and medical devices at risk of being unavailable in the territory of the Republic of Poland. It is not without reason that their export or sale without complying with the conditions specified by law constitutes the basis for the mandatory withdrawal of the permit to operate a pharmaceutical wholesale store.

Scarce medicinal products are usually characterized by low availability also in other countries, so the potential vision of selling them abroad is financially attractive. However, these types of transactions always attract special attention from the GIF. If a given entrepreneur plans to conduct his business in the above scope, he should approach all transactions with particular caution and never lose sight of the content of Chapter 2 c (Article 37av of the Farm Law et seq.) regarding monitoring the transport of medicinal products, foodstuffs for special nutritional purposes and medical products at risk of lack of availability in the territory of the Republic of Poland.

Next, which is a bit trivial even for a person who is not familiar with the legal provisions in the described area, it is also worth mentioning that there is no trade in medicinal products that have not been authorized for marketing. This premise is extremely clear and is also a mandatory basis for withdrawing the permit. It should be clarified here that products not admitted to trading are both those that do not have a marketing authorization in the territory of the Republic of Poland issued in accordance with national procedures (resulting from farm law) or EU procedures, as well as those for which a decision on their withdrawal from trading. Moreover, the concept of "trade" also includes the storage of products, so GIF will be obliged to withdraw the authorization also in a situation where the wholesaler does not distribute the medicinal product that is not available on the market, but only stores it. Urgent monitoring of the products that a given wholesaler has should therefore be one of the key things in planning the work of a given entrepreneur.

Another important obligation, which may be potentially difficult to fulfill also due to the attractive business model, is the one resulting from Art. 36z pr. farm., i.e. the obligation to ensure the availability of medicinal products. According to its content, entrepreneurs running pharmaceutical wholesalers are obliged to ensure the uninterrupted satisfaction of pharmacies' demand for medicinal products in quantities corresponding to the needs of patients. Failure to fulfill this obligation, especially in the case of refunded products, may constitute grounds for withdrawing the authorization. However, it is often the case that, from a financial point of view, it is profitable to distribute to other places or even outside the country (as mentioned earlier). It is therefore important to conduct trade in such a way as not to violate this obligation.

Another basis for losing a license, which seems inconspicuous but may have unpleasant consequences, is preventing or hindering the performance of official activities by the State Pharmaceutical Inspectorate. This mainly concerns the lack of cooperation with the inspection authorities during the inspection - failure to answer questions, failure to provide necessary documentation, etc. These are seemingly trivial activities, but failure to perform them - also due to fear of potential consequences of the inspection - may have disastrous consequences. 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. It is often easier to reverse the consequences of deficiencies found during an inspection than to avoid the consequences of a permit being withdrawn as a result of, for example, failure to provide documentation.

It is not possible to create a comprehensive guide covering all eventualities and what mistakes to avoid when running a pharmaceutical wholesale store, so here we present one last piece of advice. We are talking about standards for the storage of medicinal products. According to the second optional condition, the authorization may be withdrawn if the entrepreneur stores medicinal products contrary to the conditions of marketing authorization. However, this basis is not specified and requires detailed provisions. The rules for storing medicinal products are described in the implementing regulation to Art. 79 pr. farm. defining the procedures of Good Distribution Practice. Compliance with them should ensure that the inspection will not hold any objections to the entrepreneur.

This article provides a general outline of the described issues.

Providing detailed information or analyzing specific cases requires 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.

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