API Importer Bankruptcy Story by Fake GMP
In pharmaceutical and chemical trading, Chemical Suppliers In China are often required to provide Factory GMP (Good Manufacturing Practice) along with the manufacturer’s original CoA (Certificate Of Analysis)), either for registration or evaluation purposes.
It is not a problem for factories with Chinese GMP or ISO or audited by foreign authorities such as EDQM, US FDA, TGA, COFEPRIS, etc.
We all know that GMP and ISO certificate is only issued to factories for producing certain products (Though there are ISO certificates for sales).
What should those chemical suppliers without any certificates do?
If the chemical suppliers are honest and they would submit the original GMP Certificates along with the CoA to the customer and when there is no GMP, I mean no factory in China has GMP for it, they would tell importers the truth.
But imagine once the importers have the original certificates with manufacturer names on them, what will importers do?
Maybe the importers just want to make sure that the relevant APIs they need to import are GMP certified, suitable for their MOH registration, and allowed for human consumption when made into formulations.
But some importers may skip the traders and contact the pharmaceutical manufacturers right after they know the factory names, so they can get a lower price and kick the traders away.
The least the importers can get is a discount from the manufacturer, which is the margin currently enjoyed by the traders.
So, some suppliers may say they can only provide Original GMP and CoA after buyers confirm the order.
Will the buyers agree and proceed to confirm the order?
Without those certificates, most of the importers will not validate the suppliers’ offer in the first place, not to mention confirm the order.
So original GMP became a headache for many Chinese suppliers.
As a result, there come those suppliers fabricating GMP or ISO certificates to get orders from the importers.
With those fake certificates, those suppliers got one order after another without customers knowing the real manufacturers.
What is even worse: the chemical exporters are selling APIs from non-GMP manufacturers in the name of GMP factories.
Once those suppliers got a taste of the fake certificates, they began to fabricate fake certificates whenever it is needed.
Many chemical suppliers are doing it and more traders are about to do it.
But here we say it loudly: it is NOT OK.
On one hand, those importers who skipped the suppliers and contacted the manufacturers directly were unethical. On the other hand, GMP fabrication is not only a great danger to human health but also a SERIOUS CRIME.
They may bankrupt their importers for buying fake pharmaceutical ingredients, even dragging both importers and exporters into prison for the crime.
To avoid such tragedies, importers have to verify the GMP in the first place. (For importers who don’t know how, please check our post: How to Verify Chinese GMP Online).
We are not being over-dramatic here and we will share some similar stories in our future posts.
We also want your ideas on how suppliers and customers can have each other’s trust in international chemical trading.