China NMPA Inspection - Sichuan Hebang Xudong Pharmaceutical Co., Ltd. - August 07, 2017

An unannounced inspection of Sichuan Hebang Xudong Pharmaceutical Co., Ltd. was conducted from June 8-10, 2017, by the State Food and Drug Administration and Sichuan Provincial Food and Drug Administration. The inspection, prompted by concerns over price-cost inversion, uncovered severe regulatory non-compliance. The company was found to have actively refused and evaded inspection, destroying and fabricating critical evidence such as invoices and company seals. Specifically, they admitted to secretly producing licorice extract and patchouli oil to reduce production costs and then forging invoices from registered manufacturers to conceal this activity. When confronted, they destroyed original forged documents and seals. Furthermore, the company violated regulations concerning the filing of traditional Chinese medicine extracts. They illegally extracted significant quantities of licorice extract and patchouli oil from February 2016, using these self-produced materials in their Huoxiang Zhengqi Water while falsifying batch production records and material accounts to indicate registered external suppliers. Management, including the quality and production managers, was implicated in these fabrications. Finally, it was observed that the company consistently sold its Huoxiang Zhengqi Water below cost, suggesting unreliable production quality management data. These actions constituted violations of the "Drug Administration Law of the People's Republic of China" and relevant Good Manufacturing Practice (GMP) regulations. Consequently, the State Food and Drug Administration mandated stringent actions: the revocation of the company's GMP certificates, the immediate recall of all Huoxiang Zhengqi Water products sold, and the initiation of a thorough investigation into their illegal operations.