Chinese pharmaceutical companies will establish credit rating evaluation

The executive meeting of the State Council discussed yesterday the adoption of the National Drug Safety Plan (2011-2015), which clarified the overall goals and priorities of the drug safety work during the 12th Five-Year Plan period. The task stipulated that a long-term mechanism for the supervision of drug safety should be established, and the credit rating of pharmaceutical companies should be evaluated, and the company's integrity records should be established, and businesses with serious violations and defaults should be prohibited from entering the industry.

Song Ruilin, executive president of the China Pharmaceutical Industry Research and Development Promotion Association, told Caixin that as a voice of the highest government, this is the first time that there is a clear provision. "Industry credit system is the most missing thing in China. Integrity is very important for the development of an industry." Song Ruilin said, "This is something that should have been done long ago."

As a pharmaceutical company involved in this regulation, Wu Aimin, vice president of Sinopharm Holding Co., Ltd., told Caixin reporter that Sinopharm Group very much welcomes the relevant provisions on “credit rating evaluation”. He believes that although there is no clear proposal for further development, it will be clear step by step. Wu Aimin explained that as early as 2007, Sinopharm Co., Ltd. had already participated in the “Pilot Work for Credit Rating Evaluation of the National Pharmaceutical Business Industry” conducted by the China Pharmaceutical Business Association.

The website of the China Pharmaceutical Business Association shows that since April 2007, the evaluation of corporate credit ratings has been conducted three times. It was conducted in accordance with the document requirements of the National Regulation and Regulatory Office and the State-owned Assets Supervision and Administration Commission of the State Council on Implementing Measures for the Pilot Work of the Industry Credit Evaluation (Regulation Compliance Office [2006] No. 12). The principle of “voluntary participation” was adopted three times. A total of 66 pharmaceutical wholesale and pharmaceutical retail enterprises participated in the assessment. Participating companies first report their credit assessment after self-assessment, and are reviewed by the Industry Credit Evaluation Office of the China Pharmaceutical Business Association. The evaluation results after the audit need to be evaluated by a third-party evaluation agency, China Export Credit Insurance Corporation, and comprehensively assessed by the Association’s industry credit evaluation expert committee. The final assessment results were publicized on the Internet for 15 days. After objection, they were submitted to the SASAC and the Ministry of Commerce.

The Caixin reporter learned that the main content of the "Credit Evaluation Pilot Work" covers four points: 1. The status of corporate identity credit information, including the basic status of enterprise registration. 2. The management of credit assets of enterprises and their legal representatives, responsible persons, shareholders, and affiliates as well as the loss of credit assets of enterprises, legal representatives and responsible persons. 3. Basic credit status of the enterprise, such as financial status, profitability, labor and social security, and tax payment. 4. Establishment and implementation of enterprise credit management system. It involves contract management, resource allocation, customer credit investigation, claims security, and account management.