GMP suspension, license-lending pharmacy bill clears committee

Intermediate sanction added to revise “one-strike-out” rule…takes effect 6 months after promulgation

Local governments gain greater authority to review pharmacy openings…legal basis established for free supply of orphan drugs

A proposed amendment to the Pharmaceutical Affairs Act that would introduce ‘suspension of Good Manufacturing Practice (GMP) certification’ as an intermediate sanction for violations passed a plenary meeting of the National Assembly’s Health and Welfare Committee on September 17th.

Following its passage by the committee’s first legislative review subcommittee on Sept. 16, the amendment will now proceed to the Legislation and Judiciary Committee and then to a plenary vote of the National Assembly

Another Pharmaceutical Affairs Act amendment aimed at tightening regulations on warehouse-style pharmacies suspected of outside capital involvement and license-lending pharmacies also cleared the Health and Welfare Committee, allowing local governments to request additional documents related to suspected license lending during the pharmacy registration review process and reject registration applications when such requests are refused without justifiable reason.

On the 17th, the Health and Welfare Committee approved 5 amendments to the Pharmaceutical Affairs Act that had passed the bill review subcommittee.

The key provisions include introducing more graduated sanctions for violations of GMP certification requirements applicable to pharmaceutical companies holding drug marketing authorizations, granting local governments the authority to request documents needed to determine whether grounds for restricting pharmacy registration or violations of relevant laws exist, and establishing a legal basis for rejecting pharmacy registration applications when the requested documents are not submitted.

The GMP regulatory reform bill partially revises the so-called “one-strike-out” system for GMP certification violations by introducing an intermediate sanction allowing GMP certification to be suspended for up to 6 months. The effective date was also moved forward by 6 months, from 1 year after promulgation to 6 months after promulgation.

The legislation was proposed amid concerns that pharmaceutical companies’ business activities could be constrained if repeated false or incorrect entries in any type of GMP record were uniformly treated as grounds for revoking GMP certification, given the vast volume of GMP records that companies are required to create, maintain and retain.

The bill gained momentum after the Ministry of Food and Drug Safety supported specifying the types of GMP certification violations in greater detail and introducing certification suspension to make sanctions proportionate to the severity of violations.

The bill aimed at regulating warehouse-style pharmacies involving outside capital and license-lending pharmacies would allow mayors, county governors and district heads to request documents related to potential license lending from pharmacy applicants before approving registration.

In particular, local governments would be allowed to reject a pharmacy registration application if the applicant fails to supplement or submit the requested documents without justifiable reason.

In addition, the committee also approved provisions allowing pharmaceutical companies holding marketing authorization for orphan drugs to provide the drugs free of charge to medical institutions for patients in need, while adding management of free orphan-drug supply programs to the responsibilities of the Korea Orphan & Essential Drug Center.