Currently, an increasing number of domestic pharmaceutical sales companies are choosing to act as local representatives for overseas Marketing Authorization Holders (MAH) to expand their business scope. However, selecting a reliable local representative is not an easy task. Local representatives not only need to meet stringent regulatory requirements and fulfill their responsibilities and obligations, but they also represent the legal responsibility, corporate image, and reputation of the overseas MAH. Therefore, it is particularly important to conduct thorough due diligence on local representatives to ensure that they comply with the local regulations and management requirements of the overseas MAH.
Understanding Due Diligence
Due diligence of a local representative refers to the process where a company conducts a comprehensive investigation, analysis, and evaluation of the local representative before selection. The purpose of this process is to ensure that the local representative possesses sufficient capability and credibility to fulfill the company’s pharmaceutical responsibilities within the country. The due diligence process mainly includes the following aspects:
- Background Investigation
Check the basic information of the local representative, such as history, business scope, business model, and track record to understand their strength and reputation in the pharmaceutical industry. - Market Capability
Understanding the customer base and market share of the local representative is crucial for the company’s business expansion and sales performance. Knowledge of the local representative’s customer base and market share can help the overseas MAH gain insights into the local representative’s position and potential in the Chinese market. - Management System and Organizational Structure
The local representative’s management system and organizational structure are critical to determining their effectiveness in representing the company’s products. By examining the local representative’s infrastructure, resources, logistical capabilities, management, and organizational setup, the overseas MAH can assess whether the local representative possesses sufficient management and organizational capabilities to represent the company’s products effectively and efficiently. - Quality System and Business Capabilities
The local representative should establish a quality assurance system, set quality objectives, and manage the quality of entrusted activities, continuously improving operational efficiency to ensure that their activities consistently comply with relevant laws and regulations. Additionally, the local representative should possess the necessary capabilities, including qualified personnel, management systems, and equipment resources to undertake the entrusted tasks and cooperate with inspections by health authorities. - Financial Status
Evaluate the financial health of the representative to ensure they can sustain operations and manage the business effectively. The financial status of the local representative is a key factor for the overseas MAH in selecting a local representative. By investigating the financial status of the local representative, the overseas MAH can understand their profitability, debt repayment ability, and whether the local representative has sufficient funds to promote the company’s products. - Risk Mitigation
By conducting due diligence on local representatives, overseas MAHs can identify suitable candidates and avoid the risks associated with unscrupulous partners. This process helps ensure compliance with regulatory requirements and fosters closer cooperative relationships, promoting smooth and effective collaboration.
Conclusion
In summary, conducting due diligence on the local representative is a necessary step for the overseas MAH in selecting a qualified local representative. By evaluating the local representative’s historical background, customer base, management system, and financial status, the overseas MAH can find a reliable representative and establish a long-term cooperative relationship with them.
Contact Us
If you need support for China pharmacovigilance audit on your local representative or candidates in China, please contact us at info@accestra.com.