(SDA and MOH document, July 11, 2000)
Chapter I: General Principles
Article 1: In order to implement the Guidelines for Urban and Township Healthcare System Reform promulgated by the System Reform Office and other departments of the State Council and issued by the General Office of State Council, standardize the practice of drug purchase through bidding, certify the qualifications of bidding agents for drug purchase in accordance with the law, and establish an public, open, and fair competition mechanism for drug purchases through bidding to ensure its orderly implementation, this "Regulation for Certification and Administration of Bidding Agents for Drug Purchases" (hereinafter "Regulation") is promulgated in accordance with the "Drug Administration Law of the People's Republic of China" (hereinafter "Drug Law") and the "Bidding and Tendering Law of the People's Republic of China" (hereinafter "Bidding Law").
Article 2: The bidding agent for drug purchases (hereinafter "bidding agent") in this "Regulation" refers to the social intermediary organization engaged as an agent in providing bidding services for drug purchases and other related services.
Article 3: A system shall be established to certify the qualifications of the bidding agent with follow-up periodic inspections.
Article 4: The drug administration departments and corresponding level of health departments in all provinces, autonomous regions, and municipal cities, shall be responsible to certify the qualification of bidding agents within their respective jurisdictions.
The health departments and drug administration departments of all provinces, autonomous regions and municipal cities shall strengthen the supervision over bidding agents.
Article 5: SDA, together with MOH, shall administer the certification of the qualifications of bidding agents. SDA and MOH shall strengthen their administration over bidding agents.
Chapter II: Application Certification
Article 6: A bidding agent shall apply to the drug administration department in the province, autonomous region, or municipal city (hereinafter "drug administration department") for certification as a bidding agent.
After receipt of an application and upon obtaining approval of the health department of the same level, the drug administration department shall certify the qualifications of the applicant according to the requirements in Article 7 of this "Regulation" within 30 working days, and shall file such certification with SDA and MOH within 15 working days thereafter.
Article 7: A bidding agent shall meet the following requirements:
(1) obtained a business license and the meet qualifications for providing bidding agent services and other related services;
(2) not be affiliated with or have any interest with administrative departments and other government departments;
(3) have in place a complete organizational structure, internal management regulations and sufficient number of business personnel commensurate with its development of drug bidding agent services, of the above, 15% of the total employees shall be knowledgable about the laws and regulations of pharmaceutical administration and pharmacology;
(4) have necessary premises, facilities and capital for drug purchasing bidding agent services;
(5) have necessary expertise to draft and evaluate bidding documents, including a bank of experts; and,
(6) other requirements of SDA and MOH.
Article 8: In applying for certification as a bidding agent, the applicant shall submit the following documents according to the requirements of Article 7 of this "Regulation":
(1) business license with a scope permitting bidding agent services;
(2) documents proving it has the necessary number of employees, experts at mid-level and above, and employees with pharmacological background;
(3) certificates showing the applicant has the right to use the business premises, lists of relevant equipment and facilities;
(4) financial documents showing the bidding agent has the necessary financial resources to be engaged in bidding agent services of drug purchases;
(5) name list of the bank of experts and their method of selection;
(6) other evidentiary documents required by SDA.
Article 9: The drug administration department shall issue a "Certificate of Bidding Agent of Drug Purchase" (hereinafter "certificate") to a bidding agent which has met the qualifications. The bidding agent shall then present this certificate to the local industrial and commercial administration department for handling relevant procedures to expand the business scope of its license.
A bidding agent may only engage in bidding agent services after it has gone through the certification process and been certified.
A bidding agent who has not been certified may not engage in bidding agent services of drug purchases.
Article 10: A bidding agent shall present its certificate when engaged in a bidding transaction.
Article 11: A certificate is valid for two years. Two months prior to the expiration date of the certificate, the bidding agent shall apply with the drug administration department for reevaluation of its qualifications.
In applying for reevaluation, the bidding agent shall submit the documents requested in the Article 7 of this "Regulation" and the financial statements and documents which have been examined and approved by relevant taxation departments of the drug administration department.
Article 12: After receipt of the application for reevaluation and upon obtaining approval of the health department of the same level, the drug administration department shall complete certification reevaluation within 30 working days. An applicant who meets the qualifications, shall be issued a renewal certificate.
Chapter III: Administration
Article 13: A bidding agent shall organize bidding activities within the authorization provided by the those inviting bids, and shall abide by bidding procedures and rules regarding agency.
Article 14: If a bidding agent violates drug bidding procedures or rules regarding agency, the health and drug administration departments shall handle the matter according to relevant provisions in the "Bidding Law ". If the violation is serious, the drug administration department shall de-certify the bidding agent and a new application for certification shall not be accepted for 3 years.
Article 15: In the following circumstances, a bidding agent shall apply for registration modification within one month to the local drug administration department. If the bidding agent fails to duly modify its registration, the drug administration department may de-certify the bidding agent and reject its application for reevaluation:
(1) name of the bidding agent changes;
(2) legal person of the bidding agent changes;
(3) registered address of the bidding agent changes.
Article 16: Upon ceasing activities, a bidding agent shall return its certificate within one month.
Article 17: If a bidding agent engages in fraudulent behavior in its application for certification or re-evaluation, the drug administration department may cancel its application, or suspend its status as a bidding agent for 3 years, not accepting a subsequent application for certification for 3 years. For a serious matter, the bidding agent may be permanently disqualified, and an application for certification not be accepted in the future.
Article 18: The drug administration department shall decertify and not accept future application from bidding agent who alter or transfers its certificate.
Article 19: The drug administration department shall cancel the certificate of a bidding agent who fails to comply with relevant regulations to verify the legal qualifications of bid invitation units and bidders, the approval number of a drug and its drug quality inspection report. For serious violations, a bidding agent's application for certification will not be accepted in the future.
If counterfeit drugs are purchased through bidding due to the above reasons, the case shall be handled according to the "Drug Administration Law" by the relevant drug administration department.
Article 20: The drug administration department shall cancel the certificate of a bidding agent who has accepted authorization from a unit without a "Medical Institution Business License", or receiving authorization from a medical institute, engages in bidding activities with units without "Drug Manufacturing License" or "Drug Distribution License". The bidding agent's application for certification will not be accepted in future.
The drug administration department shall decertify a bidding agent who invites tenders for drugs which do not comply with relevant laws, or for toxic drugs, narcotics, psychiatric drugs, radioactive drugs and other drugs which are under special state administration. The bidding agent's application for certification will not be accepted for one year.
Article 21: The drug administration department shall order the bidding agent to remedy the following violations within a fixed time, and shall decertify a bidding agent who fails duly remedy the violation, a subsequent application for certification will not accepted for three years. For a serious violation, the bidding agent's application for certification will not be accepted in the future.
(1) using inappropriate means to make a medical institution participate in the bidding activities organized by the bidding agent;
(2) adopting coercive, discriminative or restrictive policies against those inviting bids or those tendering bids in violation of the "Bidding and Tendering Law ".
Article 22: The relevant drug administration department and other relevant departments shall impose sanctions according to relevant regulations and laws against a bidding agent who violates the "Drug Administration Law " and the "Tendering and Bidding Law" while engaging in bidding operations for drug purchases. The drug administration department may decertify the bidding agent according to the objective circumstances.
Article 23: A bidding agent shall not engage in drug distribution. A bidding agent who engages in distribution shall be regarded as illegally distributing drugs without a license, and the bidding agent shall be sanctioned by relevant drug administration department according to the "Drug Administration Law".
A bidding agent who does not have the certificate and engages in bidding agent services shall be strictly sanctioned according to relevant regulations.
Article 24: SDA and MOH may respectively order the local drug administration department and health departments who violate relevant regulations in the issuance of certificates to remedy the situation within a fixed time. If a department fails to remedy within a fixed time, SDA can directly cancel certificates issued by such department.
For a serious matter, SDA may withdraw the authority of department to issue certificates.
SDA and MOH may require the relevant local drug administration department and health department to sanction the bidding agent who violates relevant laws and regulations according to this Regulation. If the drug administration department and health department fail to efficiently sanction bidding agents, SDA and MOH may withdraw the licensing authority of such departments. SDA may directly cancel the certificate of a bidding agent engaged in illegal bidding activities.
Article 25: An affected party may apply for administrative reconsideration or administrative appeal of the sanctions according to the Law of Administrative Reconsideration and the Law of Administrative Appeal.
Chapter IV: Miscellaneous
Article 26: "The non-acceptance of future applications for certification" referred to in the chapter on Administration applies to the applications in the name of the former legal person of the concerned bidding agent, or in the name of a newly established bidding agent organized by other principals of the concerned bidding agent, or in the names of major violators, or in the name of the concerned bidding agent.
Article 27: "Employee knowledgable about the laws and regulations of pharmaceutical administration and pharmacology" in Article 7, Item 3, refers to full-time employees and not part-time employees of a bidding agent.
Article 28: The "Regulation" shall be effective on September 1, 2000.