The GSP deficiencies of drug circulation enterprises mainly focused on the General Provisions, Storage and Maintenance, Sales. The main problems were:

1. Fail to conduct business in accordance with the law and have false and cheating behaviors.

The enterprise changed the registered business address without authorization; established warehouses to store drugs beyond the scope of business license; provided conditions for illegal distribution of drugs; falsified the procurement source and sales flow of drugs; concealed bills and provided false materials; provided untruthful self-inspection report; falsified tax return; and tampered temperature and humidity monitoring data.

2. Fail to store the drugs in accordance with regulations and fail to conduct effective monitoring and control of the temperature and humidity of warehouse.

3. The bills, account, goods and payment was inconsistency for the purchase and sales of drugs, and the enterprise failed to implement national regulations for the sales of special medicines.

Part VII GMP Observation Inspection by Foreign Organizations

　　I. Overview of Inspections

　　Based on the requirements in the letter from the Department of International Cooperation of China Food and Drug Administration, CFDI organized to complete 81 observation inspections on pharmaceutical manufacturers in 2016, involving 76 manufacturers, covering 20 provinces (municipalities) including Zhejiang and Shandong etc., of which Zhejiang, Shandong, Jiangsu, Guangdong, Hubei, Hainan and Hebei accounted for 80%, which was basically consistent with last year, but the proportion of each province showed a slight change.

In 2016, the inspection organizations involved in the observation inspection included 12 international organizations or foreign drug regulatory authorities, such as World Health Organization (WHO), European Directorate for Quality Medicines (EDQM), United States Food and Drug Administration (US FDA), Germany BGV, Agência Nacional de Vigil?ncia Sanitária (ANVISA) and French National Agency for Medicines and Health Products Safety (ANSM). Nine pharmaceutical manufacturers were identified with critical deficiencies and failed the on-site inspections by foreign regulatory authorities / inspection organizations (accounting for 11%).

Compare with that in 2015, the fail rate was slightly increased. Among 9 enterprises failing in the inspection, most critical deficiencies involved the problems in data integrity (including conducting repeated tests until qualified, conducting tests after changing system time, deleting data, deleting the audit and tracking records, selectively using data, modifying the name of the electronic data, test sample injection, failing to record timely, untruthful records, loss of data and records, insufficient file record control, etc.), and some enterprises involved such aspects as unreasonably developed material standards and inadequate measures to avoid cross contamination. Overall, the problems in the data integrity is relatively prominent and were also the main reasons for the increase of fails of domestic enterprises in foreign inspections in 2016, which also reflects the change tendency of the current drug inspection.

The observation inspections this year involved a total of 172 drugs, including 119 APIs, 23 oral solid preparations, 19 injections，5 biological products and 6 other products. Of the 81 inspections, there were 62 inspections involving APIs, accounting for 69%, and there were 12 inspections involving oral solid preparations, accounting for 13%. Of the drugs involved, APIs had the largest proportion, followed by oral solid preparations, and there was relatively less export of other dosage forms. Compared with that in 2015, the proportion of other dosage forms (including sterile products and biological products) receiving inspection increased, from 10% in 2015 to 18% in 2016.

　　II. Main findings

　　The 1108 deficiencies were identified and recorded in the observation inspection in 2016. It was identified in the classification analysis on the deficiencies based on Chinese GMP (2010 version) that: the deficiencies in six categories including Quality Control and Quality Assurance, Documentation Management, Equipment, Materials and Products, Verification and Qualification and Premises and Facilities accounted for 88% of all the deficiencies. Compared with those in 2015, the deficiencies in Documentation Management increased from the 4th place to the second place in terms of its ranking and still showed an increase of 7% (from 10.5% to 17.3%) under an atmosphere that enterprises are gradually strengthening the management of data integrity, fully reflecting the concern extent and strict requirements for data integrity in currently foreign inspections.

In pharmaceutical GMP inspections by foreign organizations, the deficiencies in “Quality Control and Quality Assurance” topped the list, accounting for 27.3%. Main problems focused on the management of computerized analysis instruments in the laboratory, deviation handling and CAPA, product quality review, change control, OOS/OOT result processing, the laboratory’s failing to meet the provisions for control procedure, microbial inspection management, quality risk management and stability test. The deficiencies in “Documentation Management” ranked the second, mainly focusing on four aspects including the completeness and traceability of records, life cycle management of documents, document completeness and record operation. The deficiencies in “Equipment” ranked the third, of which the deficiencies in the using and cleaning, calibration, maintenance and repair of equipment and water preparation system accounted for 83.6%. The deficiencies in “Materials and Products” focused on supplier management, identification of materials and products, process management of materials, compliance with material and product standards and release management. The deficiencies in “Verification and Qualification” mainly included the scientificity of validation, validation management and validation documents and records. The deficiencies in “Premises and Facilities” mainly included environmental control, management of storage area, the measures to prevent pollution and cross-pollution and life cycle management of premise and facilities.

　　III. Analysis on pharmaceutical GMP inspection of different organizations

　　In terms of inspection content, there was certain difference in the inspection focus among different pharmaceutical GMP inspection agencies, but it was found in the analysis on the deficiencies identified in the observation inspections in 2016 that there were relatively more deficiencies in six aspects including Quality Control and Quality Assurance, Documentation Management, Equipment, Materials and Products, Verification and Qualification and Premises and Facilities. As for the number of deficiencies in the final inspection report,

EDQM and WHO proposed more deficiency data, averaging 20 deficiencies in each inspection. For each deficiency, the problems identified during the inspection have been described. After the finish of inspection, such problems have been organized for preparing final inspection report (usually a month). US FDA proposed relatively less deficiencies in the inspections, averaging 7 deficiencies in each inspection, and did not take all the problems identified during the inspection as final deficiencies. The inspectors proposed the final deficiencies after the judgment based on the problems identified in combination with the product risks, and notify the enterprises in written form (Table 483) when holding the last inspection meeting.

（Note:The English version of this report is for reference only）