Original Title: Notice of the Shandong Provincial Drug Administration on Issuing the "Several Measures for Promoting High-Quality Development in the Pharmaceutical Distribution Industry through Innovative Regulation"
To thoroughly implement the guiding principles of relevant documents such as the "Shandong Province '14th Five-Year Plan' for Drug Safety" (Lu Zheng Ban Zi [2021] No. 72), and to balance development and safety,uphold safety as the bottom line while pursuing higher standards to promote development, further innovate regulatory services, foster high-quality development of the province’s pharmaceutical distribution industry, and effectively safeguard the health and safety of the people, the following measures are formulated in accordance with the “Drug Administration Law of the People’s Republic of China” and other relevant laws and regulations.
I. Continuously Optimize the Structure of the Pharmaceutical Distribution Industry
(1) Optimize the layout of the pharmaceutical distribution industry. Encourage pharmaceutical wholesale and retail enterprises to optimize the distribution of their outlets to achieve balanced and orderly development where outlet distribution aligns with regional development and pharmaceutical supply capacity matches demand. Establish a pharmaceutical distribution structure centered on large backbone enterprises and supplemented by small and medium-sized enterprises. Accelerate the establishment of a modern pharmaceutical logistics service system that is reasonably laid out, technologically advanced, convenient and efficient, environmentally friendly, and safe and orderly.
(2) Promote the Transformation and Upgrading of the Pharmaceutical Distribution Industry. Further optimize the industry structure and continuously increase the concentration of the pharmaceutical distribution sector. Support cross-regional and cross-ownership mergers and reorganizations among pharmaceutical distribution enterprises to foster large-scale, modern backbone enterprises in the sector. Encourage small and medium-sized enterprises with network advantages to merge with backbone enterprises to achieve complementary strengths and service expansion.
(3) Continuously increase the penetration rate of pharmaceutical retail chains. Support pharmaceutical retail chain enterprises in pursuing innovative development through mergers, reorganizations, acquisitions, and franchising to comprehensively enhance the penetration rate of retail chains and the level of standardized management. Guide large pharmaceutical retail chains to integrate standalone pharmacies in rural areas through various means, standardize the operation and management of rural pharmacies, improve quality assurance systems, and focus on building a safe pharmaceutical supply chain in rural areas. Pharmaceutical retail chain headquarters may conduct centralized and unified distribution of pharmaceuticals to their affiliated stores within the province without regional restrictions.Newly established pharmaceutical retail chain headquarters may operate without their own warehouses, instead entrusting the storage and distribution of pharmaceuticals to a pharmaceutical wholesaler within the same corporate group or to a pharmaceutical wholesaler equipped with modern logistics capabilities.
(4) Encourage integrated wholesale and retail operations. Pharmaceutical wholesale and retail chain enterprises are encouraged to acquire, merge, or restructure other pharmaceutical wholesale and retail chain enterprises to implement integrated wholesale and retail operations under a single legal entity, with shared warehousing and transportation facilities and equipment.Enterprises shall establish a quality management system compliant with both pharmaceutical wholesale and retail chain operations based on the pharmaceutical wholesale enterprise’s quality management system, and develop a computerized system that meets the requirements for comprehensive operational management and quality control. The quality management department must have dedicated personnel responsible for quality management in pharmaceutical wholesale and retail chain operations, respectively. Enterprises integrating wholesale and retail operations shall supervise stores to ensure compliance with the “Seven Unifications” requirements and standardize pharmaceutical operations and quality management at the store level.
II. Accelerate the Development of Modern Pharmaceutical Logistics
(5) Support cross-regional distribution by modern pharmaceutical logistics enterprises. Encourage modern pharmaceutical logistics enterprises to build national and regional pharmaceutical logistics parks and distribution centers, and to accept storage and distribution commissions from pharmaceutical production and operation enterprises both within and outside the province. Support the establishment of pharmaceutical wholesale enterprises with modern logistics capabilities; those meeting the “Shandong Province Modern Pharmaceutical Logistics Implementation Standards” may apply for a “Pharmaceutical Operation License” in accordance with established procedures.Pharmaceutical operating enterprises or top 100 pharmaceutical manufacturers that meet modern pharmaceutical logistics standards may establish subsidiaries to undertake pharmaceutical distribution operations. The facilities and warehousing conditions of such subsidiaries shall be commensurate with the range and scale of their operations, and the warehouse area shall, in principle, be no less than 3,000 square meters. Should such subsidiaries undergo mergers, reorganizations, or become independent of their parent group’s control, they must comply with the “Shandong Province Implementation Standards for Modern Pharmaceutical Logistics.”
(6) Encourage the development of third-party pharmaceutical logistics services. Support pharmaceutical modern logistics enterprises with high levels of digitization, intelligence, and automation in expanding their third-party pharmaceutical logistics services. Encourage pharmaceutical production and operation enterprises to entrust their pharmaceutical storage and distribution operations to pharmaceutical wholesale enterprises meeting modern logistics standards. Entrusting entities may, based on their own needs and provided traceability is ensured, either entrust all operations or partially entrust operations by product type or distribution region.The outsourcing of distribution for enterprises specializing in special pharmaceuticals and diagnostic reagents shall be carried out in accordance with relevant national regulations. Pharmaceutical wholesale enterprises that have fully outsourced storage and distribution and subsequently cease such operations—if they construct their own warehouses—must ensure that their facilities and storage conditions are commensurate with the product lines and scale of their operations. The floor area shall, in principle, be no less than 3,000 square meters and shall not be inferior to the warehouse conditions prior to outsourcing storage and distribution.
(7) Modern pharmaceutical logistics enterprises are permitted to establish additional warehouses in other locations. Wholesale enterprises that meet the “Shandong Province Implementation Standards for Modern Pharmaceutical Logistics” may establish additional pharmaceutical warehouses across prefecture-level cities or provinces. The storage area must be commensurate with the scope and scale of their operations, and they must apply for an amendment to their “Pharmaceutical Business License” for the new warehouse location. Enterprises intending to establish warehouses outside the province must comply with the regulations of the local pharmaceutical supervision and administration department.Explore cooperation between modern pharmaceutical logistics enterprises and medical institutions to provide extended logistics services.
III. Exploring New Models for Pharmaceutical Distribution
(8) Implement intra-group multi-warehouse coordinated distribution. Formulate management measures for multi-warehouse coordination in pharmaceuticals. Pharmaceutical wholesale enterprise groups that meet the conditions for modern pharmaceutical logistics may, provided they can achieve integrated management of quality management systems, administrative systems, and information systems within the group, allow their subsidiaries (branches) to conduct multi-warehouse coordinated storage and distribution within the group (excluding narcotic drugs, psychotropic drugs, toxic drugs, radioactive drugs, etc.).
(9) Launch pilot programs for direct pharmaceutical distribution. Explore new models of pharmaceutical logistics and distribution that are convenient and efficient, safe and orderly, and environmentally friendly and low-carbon. Under the premise of integrated computerized management, enterprise groups that integrate pharmaceutical manufacturing and distribution may conduct pilot programs for intra-group direct pharmaceutical distribution in accordance with pilot plans reported to provincial drug regulatory authorities. Provided that the affiliated pharmaceutical wholesale enterprises sell only the group’s self-produced pharmaceuticals, drugs may be transported and distributed directly from the pharmaceutical manufacturer to downstream customers.
(10) Actively promote the integration and utilization of warehousing resources. Rationally allocate and utilize warehouse facilities and equipment. Drug distribution enterprises whose business scope does not include frozen or refrigerated drugs are not required to equip themselves with facilities such as cold storage warehouses or refrigerated vehicles. Provided that GMP and GSP requirements are met, drug manufacturers and drug distribution enterprises within the same group are permitted to share finished product warehouses for the storage of self-produced drugs. The parties sharing the warehouse shall sign a quality assurance agreement to clarify their respective responsibilities.
IV. Encouraging the Development of Pharmaceutical Cold Chain Logistics
(11) Support cross-regional distribution by pharmaceutical cold chain logistics enterprises. Encourage large pharmaceutical cold chain logistics enterprises to “go global” and build a cold chain pharmaceutical distribution network based in Shandong and extending nationwide. Support pharmaceutical cold chain logistics enterprises in establishing multi-warehouse operations both within and outside the province, as well as constructing cross-regional cold chain distribution transfer centers (distribution hubs) commensurate with regional distribution tasks, to build a convenient, efficient, and safe modern pharmaceutical cold chain logistics system.
(12) Promote the standardized development of pharmaceutical cold chain logistics. Encourage pharmaceutical distribution enterprises to improve the networked layout of pharmaceutical cold storage facilities and enhance the functionality of supporting cold chain infrastructure and equipment, thereby elevating the level of information-based management throughout the entire pharmaceutical cold chain process. Support pharmaceutical wholesalers with modern logistics capabilities to expand their cold chain pharmaceutical storage and distribution operations, undertake commissioned cold chain pharmaceutical distribution, and improve the level of quality and safety assurance for cold chain pharmaceuticals.
V. Developing Digital Pharmaceutical Distribution
(13) Actively develop new business models in pharmaceutical distribution. Support the integrated development of pharmaceutical distribution enterprises and e-commerce platforms, and foster new forms such as smart supply chains, smart logistics, and smart pharmacies. While adhering to the principle of “consistency between online and offline operations,” encourage pharmaceutical retail enterprises to adopt new retail delivery methods such as “online ordering with in-store pickup” and “online ordering with in-store delivery.”
(14) Promote the deep integration of “Internet Plus” with the pharmaceutical sector.Support the transfer of prescriptions between pharmaceutical retail chains, physical medical institutions, and online medical institutions. Explore the interoperability of medical institution prescriptions and pharmaceutical retail information. Promote the establishment of a digital management system covering disease diagnosis and treatment, pharmaceutical distribution, medical institution billing, and medical insurance settlement. Achieve deep integration between online and offline operations to form a new “Internet Plus Medicine” model involving medical institutions, pharmaceutical manufacturers and distributors, insurance companies, and information technology service providers.
(15) Encourage the electronic management of initial drug supply documentation. Provided that drug quality, safety, and traceability are ensured, pharmaceutical manufacturers and distributors may use electronic initial supply documentation exchanged via platforms certified by relevant authorities; such documentation shall have the same legal effect as paper documents. Support pharmaceutical manufacturing and distribution groups in establishing their own platforms to facilitate the sharing of initial supply documentation within the group. Encourage pharmaceutical distributors and medical institutions to request and use electronic initial supply documentation and inspection reports.
(16) Encourage electronic traceability for pharmaceutical production and distribution. Under the premise of integrated computerized management, encourage the electronic transmission of documents among pharmaceutical manufacturers, wholesalers, retail chains, and their outlets within the same group; enable real-time tracking of the distribution process; and require the issuance of “electronic receipts” upon completion of delivery. This will further standardize pharmaceutical quality management throughout the entire distribution process and ensure electronic traceability across the entire supply chain.
VI. Implementing New Measures to Streamline Administration, Benefit Enterprises, and Serve the Public
(17) Launch remote prescription review services. Encourage the headquarters of pharmaceutical retail chains to establish remote pharmaceutical service (prescription review) centers. Allow pharmaceutical retail chains to utilize third-party remote prescription review platforms to provide remote pharmaceutical services and conduct prescription reviews as a supplementary service when licensed pharmacists are off-duty or outside of working hours.
(18) Promote medical insurance settlement for online pharmaceutical purchases. Support online pharmaceutical platforms in providing services such as medication purchase and home delivery to patients. For online pharmaceutical purchase transactions eligible for medical insurance settlement under policy regulations, rely on the medical insurance information platform and utilize the identity verification capabilities of the medical insurance electronic certificate. Through the Medical Insurance Electronic Prescription Circulation Center and the Mobile Payment Center, provide online settlement services to patients on online pharmaceutical platforms authorized by the National Medical Insurance Bureau.
(19) Explore the use of “electronic prescriptions.” Encourage eligible enterprises to collaborate with legally qualified third-party medical institutions to establish electronic prescription sharing platforms, provided that responsibilities are clearly defined and management systems are robust. Support retail pharmaceutical enterprises in the compliant use of medical institutions’ “electronic prescriptions” in accordance with relevant requirements, such as the “Measures for the Administration of Internet-based Medical Services (Trial)” (National Health Commission Document No. 25 [2018]).Pilot the circulation of prescriptions for common and chronic diseases; online prescriptions must bear a doctor’s electronic signature and be reviewed by a pharmacist.
(20) Retail chain enterprises are permitted to transfer medications between stores in close proximity. With the approval of the chain headquarters, stores within the same chain may transfer medications to nearby locations (excluding frozen or refrigerated medications and medications subject to special management).The headquarters of pharmaceutical retail chains shall establish management requirements for the transfer of medicines between chain stores. When transferring medicines, chain stores shall retain transfer records and specify the necessity of the transfer, and upload the information to the chain headquarters. The chain headquarters shall properly register and update information on transferred medicines to ensure the traceability of the origin and quality of the medicines, thereby realizing “convenient local pickup” and “convenient local delivery” to facilitate public access to medicines.
(21) Expand channels for the public to purchase medicines. Retail pharmaceutical enterprises are encouraged to provide 24-hour medicine purchase and delivery services in various forms. Retail pharmaceutical chains are encouraged to set up dedicated medicine sales counters in locations such as airports, train stations, shopping malls, supermarkets, and convenience stores to sell Category B over-the-counter (OTC) medicines, thereby enhancing service levels and facilitating public access to medicines. Local authorities should actively explore and formulate standards for the establishment of Category B OTC medicine sales counters and automated medicine dispensers, while strengthening supervision and services.
VII. Optimizing and Streamlining Approval Services
(22) Encourage pharmaceutical enterprises to upgrade and renovate their facilities. When pharmaceutical wholesalers or retail chain headquarters apply to increase the floor area of their existing warehouses, the enterprises shall conduct internal audits in accordance with the “Good Distribution Practice (GDP) for Pharmaceutical Products.” Provided the enterprise commits to compliance with relevant regulations, on-site inspections will no longer be conducted, and the “Pharmaceutical Business License” will be issued directly with the updated warehouse area.Provided that the warehouse address and area remain unchanged, pharmaceutical wholesalers and retail chain headquarters may independently adjust warehouse functional zoning upon passing internal audits; relevant internal audit and validation records shall be retained for future reference. Pharmaceutical regulatory authorities shall strengthen oversight during and after the process.
(23) Simplify the approval procedures for retail enterprises dealing exclusively in Category B over-the-counter (OTC) drugs. Drug regulatory authorities and administrative approval departments at all levels shall, based on actual circumstances, simplify approval procedures for applications to establish retail enterprises dealing exclusively in Category B OTC drugs. The licensing requirements shall be implemented under a notification and commitment system, shifting from pre-approval verification to post-approval inspection.
(24) Optimize the approval process for restructured enterprises. Support and encourage pharmaceutical distribution enterprises to accelerate their development through mergers and reorganizations. For enterprises that comply with industrial policies and implement mergers and reorganizations, provided they maintain the same quality assurance system, matters such as changes to pharmaceutical distribution licenses may be processed expeditiously in accordance with relevant regulations.While pharmaceutical distribution enterprises are in the process of obtaining a "Pharmaceutical Distribution License," they may continue their existing operations without interruption; however, both parties involved in the merger or reorganization must sign a comprehensive pharmaceutical quality assurance agreement, clearly define the responsible parties, ensure traceability of origin and destination, and guarantee pharmaceutical quality.
(25) Optimize delegated inspections. When modern pharmaceutical logistics enterprises undertake commissioned storage and distribution services for multiple pharmaceutical manufacturers, wholesalers, and retail chains, and drug regulatory authorities conduct on-site inspections of the commissioning enterprises that involve extended inspections of the commissioned modern pharmaceutical logistics enterprises, if the commissioned enterprise has undergone an inspection by provincial-level drug regulatory authorities within the past year that was identical or covered the same scope, duplicate inspections of the commissioned enterprise may be waived.
VIII. Effectively Ensuring Drug Quality and Safety
(26) Implementing Corporate Primary Responsibility. Both the commissioning and contracted parties in pharmaceutical storage and distribution must strictly comply with the provisions of the “Drug Administration Law” and other relevant laws and regulations, rigorously fulfill their responsibilities for pharmaceutical quality management, adhere to Good Distribution Practices (GDP), establish and improve pharmaceutical quality management systems, proactively control operational risks, and ensure that the entire pharmaceutical distribution process consistently meets statutory requirements.
(27) Strengthen Industry Self-Regulation. Promote the development of an industry integrity system and actively advocate for honest business practices. Through integrity education and publicity campaigns, as well as initiatives such as the “Quality Shandong Pharmaceuticals” demonstration program, encourage pharmaceutical distribution enterprises to participate in credit-building efforts. Establish a group of exemplary enterprises that comply with laws and regulations, operate with integrity, maintain standardized management, provide adequate services, actively fulfill social responsibilities, and voluntarily accept supervision. Support and encourage industry associations to establish self-regulatory conventions, service standards, and codes of conduct to promote social co-governance.
(28) Enhance regulatory effectiveness. In accordance with the “Four Strictest” requirements, strictly implement local regulatory responsibilities, strengthen pharmaceutical risk management, and comprehensively utilize on-site inspections, off-site monitoring, and credit-based sanctions to reinforce both routine and targeted oversight. Actively advance “Internet Plus Regulation” to achieve integrated online and offline supervision.Implement scientific, smart, and credit-based supervision to enhance regulatory effectiveness, standardize the order of pharmaceutical operations, and severely crack down on illegal activities such as the manufacture and sale of counterfeit and substandard drugs, unlicensed pharmaceutical operations, purchasing and selling through illegal channels, renting or lending licenses, unfair competition, and price monopolies, thereby effectively ensuring drug quality and public medication safety.
Please promptly report any new situations or issues that arise during implementation. Should new policies or regulations be issued under laws, statutes, or rules, such provisions shall prevail.
This notice shall take effect on December 1, 2022, and remain valid until November 30, 2027.
