Pharmaceutical company registration in Iran involves specific procedures and steps. The “Regulations for the Establishment and Operation of Pharmaceutical Companies” outline the criteria and conditions necessary for registering this type of company. Karimi & Associates Law Firm, with a team of experts in various company matters, especially pharmaceutical firms, is prepared to offer services and advice.
The types of pharmaceutical companies, according to the regulation above, are as follows:
Pharmaceutical institutions
This type of institutions refer to companies involved in the manufacturing, importing, and urgently importing drugs that are legally approved and possess the necessary activity licenses.
National Distribution Company
According to its articles of association, this company is committed to distributing medicines. It handles medical products with the necessary licenses, including medicines, powdered milk, dietary supplements, infant formula, medical consumables, cosmetic products, medical equipment, and authorized pharmaceutical supplies. More than simply a distributor, it serves as a crucial intermediary, fostering connections between licensed pharmaceutical institutions and pharmacies.
Provincial Branch
It is a component of the structure of the National Distribution Company, which is responsible for distributing medications under the supervision of the company’s headquarters and according to the legal regulations and guidelines set forth by the Ministry of Health, Treatment, and Medical Education. The Provincial Branch operates closely with, and under the supervision of, the Deputy of the Food and Drug Administration at the University of Medical Sciences in the provincial center, ensuring that its operations align with the highest standards and regulations established by health authorities.
Provincial Distribution Company
A company registered according to the law, whose articles of association specify that its activity is medicine distribution. By obtaining the necessary licenses, it distributes medicine, powdered milk, dietary supplements, infant food, medical consumables, health cosmetics, medical equipment, and authorized pharmaceutical supplies at the provincial level where requests arise. It acquired the required activity license before the regulation notification mentioned above.
Legal Commission
The Pharmacy and Distribution Affairs Commission, established under Article 20 of the Law on Regulations for Medical and Pharmaceutical Affairs, Food and Beverages, is located in the Deputy of Food and Drug Administration within the Ministry of Health, Treatment, and Medical Education (Central Legal Commission) and the Deputy of Food and Drug Administration at the relevant University of Medical Sciences (University Legal Commission).
Registration Requirements
First and foremost, it is crucial to recognize that the application process for establishing a national or provincial distribution company is an exclusive privilege reserved for firms that meet the necessary criteria and include drug distribution in their articles of incorporation. This process is not accessible to individuals or other entities. Additionally, the Central Legal Commission evaluates the number of national distribution companies every five years, considering the turnover and volume of the country’s pharmaceutical market. According to Article 9 of this regulation, the distribution of rare (orphan) drugs, any drug that requires patient information registration, and subsidized drugs requires not only compliance with the provisions of this regulation but also obtaining a separate license from the General Directorate of Drug and Narcotics Supervision.
According to Article 10, the necessary conditions for all members of the board of directors and the CEO are as follows:
- Iranian Citizenship
- Belief in one of the officially recognized religions listed in the Constitution.
- Submit a military service completion certificate, exemption from service, or a certificate of employment in the Armed Forces.
- A good service record, relevant activities, and essential skills in the pharmaceutical field, as confirmed by the legal commission.
- Submission of a certificate showing no criminal record and no addiction.
In addition to complying with the provisions of Article 10, the legal commission must approve specific regulations for obtaining initial approval, an operational license, and an establishment permit. The initial approval is valid for six months, and the establishment permit can be renewed every three years.
Regulations and Requirements for Obtaining an Operational License and Establishment Permit:
- Introduction of qualified technical managers for the company’s main office and warehouse, as well as for each provincial branch, according to regulations.
- The main warehouse will be introduced according to regulations.
- Introduce provincial branches to comply with regulations.
- Introduction and submission of a computer software system capable of generating the required electronic reports for the company, the Drug, and Narcotics Affairs Department, and the Food and Drug Administration of the province’s central university, with updated access levels for retrieving information related to pharmaceutical manufacturers, importers, and customers.
- Possessing proper distribution facilities and transportation fleet according to regulations.
If the above conditions are met, a one-year operational license for a nationwide distribution company will be issued.
How it Works
From the start of operations, the company is required to implement the following documentation process to renew its operating license:
- Adequate office facilities, as well as appropriate software and hardware services, in accordance with regulations.
- Instructions and checklists exist for all operations performed, including recalls, warehouse cleaning, receipt and delivery slips, and other documentation according to regulations.
Supervision of Performance and Handling Violations of Pharmaceutical Companies
The General Directorate of Drug and Narcotics Affairs typically supervises the operations of pharmaceutical companies at both the national and provincial levels. However, according to Article 3 of the Medical and Pharmaceutical Affairs Regulations, if a distribution company encounters any of the following situations after obtaining an operating license or establishment permit, the matter will be reviewed, and the legal commission will make a decision:
- Amendments to the distribution company’s bylaws conflict with drug distribution regulations.
- Failure to comply with any of the provisions and conditions in this regulation and its related rules as communicated by the Food and Drug Administration and the General Directorate of Drug and Narcotics Affairs.
- The technical manager may be absent or unable to perform duties due to actions by the company’s managers or other personnel, with appropriate documentation provided by the technical manager.
- Direct or indirect encouragement of medical or paramedical professionals by nationwide or provincial distribution companies to prescribe unnecessary medications.
- Causing financial, physical, or psychological harm to patients due to delays or improper conditions in recalls or inadequate storage and distribution practices, as confirmed by the competent authorities.
- Failure to adhere to the approved prices by the Drug Pricing Commission, as communicated by the General Directorate of Drug and Narcotics Affairs.
- Distribution of drugs outside the official pharmaceutical network of the country through unauthorized drug distribution centers and purchases from unofficial and illegal sources.
- Unconventional drug distribution leads to irrational drug use and distribution.
- Distribution of unauthorized drugs or drugs not included in the official national drug list.
- Failure to suspend the technical manager’s responsibilities when notified by the General Directorate of Drug and Narcotics Affairs due to non-performance of legal duties and responsibilities.
- Failure or negligence in notifying the manufacturer or importer about shortages of pharmaceutical items.
- Non-distribution of drugs in stock despite the needs of pharmacies.
- Neglect in the proper distribution of specialized and subsidized drugs and failure to notify promptly, resulting in reduced effectiveness or drug corruption.
In the event of any of the violations mentioned above, the matter will be reviewed by the legal commission as follows:
Stage One
A written warning will be issued, and the company will be granted a two-month deadline to rectify any deficiencies or violations.
Stage Two
The company’s operations will be suspended, and the case will be referred to the appropriate judicial authorities for possible temporary or permanent revocation of the company’s operating license or establishment permit.
If you need legal consultation regarding registering a pharmaceutical company or resolving related disputes, you can take advantage of the services offered by the Karimi & Associates Law Firm by visiting the “Contact Us” section.