Is paperwork no longer needed? Audits and less paperwork in the health sector

Some administrative simplification rules have been issued to remove a number of requirements, like the need to provide a copy of the National ID document and Taxpayer’s Registration Card (RUC), but it’s only the tip of the iceberg as there’s still a lot to be done as we are devoted to paperwork and bureaucracy.

If we take a look at bureaucracy in the health sector, specifically at DIGEMID, the entity in charge of the sanitary registration of pharmaceutical and similar products and issuing the authorizations needed by importers and distributors of these products, we will see that things could become hilarious.

People seem to like paperwork and dislike audits. The solution doesn’t lie in asking for more and more documents and making requirements more stringent, but rather in auditing companies to check whether or not they are declaring what they are actually selling. Even more so if we speak of products as sensitive as pharmaceutical drugs.

Following are some areas where administrative simplification measures could be taken to allow more Peruvians to gain access to state-of-the-art pharmaceutical drugs and preventing these drugs from getting stuck at DIGEMID for years.

i)     Fast registration.- Many pharmaceutical products and medical devices are already registered in countries that maintain a high level of sanitary vigilance, with agencies like FDA (Food and Drug Administration) or EMA (European Medicines Agency); however, in Peru, the process involved in the registration of pharmaceutical and similar products is not only lengthy but also complex because Peru requires the filing of documents and other information not required in countries that maintain a high level of sanitary vigilance. Again, public servants are devoted to paperwork.

Solution: Implement a quick sanitary registration procedure, with less paperwork, for products which have proven to be safe and efficient in countries that maintain a high level of sanitary vigilance.

ii)     Automatic renewal.- Sanitary Registrations should be renewed automatically, instead of making applicants go through the ordeal of filing all the required documents over and over again every five years, as if they were applying for sanitary registration for the first time.

Solution: Automatically renew sanitary registrations which have not been modified and/or when the case file documents have been brought up-to-date before the renewal application is filed.

iii)     Certifications and Authorizations, one after the other and all of them for the same warehouse.- Did you know that DIGEMID can inspect the same warehouse area at least four (04) times, with the same Inspection Certificate? That is, like the worst nightmare that repeats over and over again, DIGEMID inspects the same warehouse area four different times just because it is required to do so by its regulations. Let it explain ourselves:

Company “A” enters into a service agreement with Company “B” in order for the latter to provide storage services to the former. Company “B” has already obtained all the required sanitary authorizations and certifications of good practice issued by DIGEMID.

Company “A” is planning to import goods which must be stored in refrigerated chambers, for which reason Company “B”, which is the one that is to provide the required storage services, files an application with DIGEMID asking for authorization to expand its facilities to install refrigerated chambers.

So far, everything seems fine. However, the endless nightmare begins right here. Company “B”, in addition to the warehouse expansion procedure that it must follow with DIGEMID, needs to apply for the certification of the same warehouse area where the new facility and the same documents will be inspected again.

But everything does not finish there. Company “A” will have to follow the same two (02) procedures already followed by Company “B” with DIGEMID in order for DIGEMID to inspect again the same infrastructure and the same documents. Crazy, right?

Solution: There should be only one procedure in place for the expansion of the warehouse and the certification of good practices. DIGEMID should not ask both companies to follow the same procedures. It should be enough if it asks only one company to do it.

iv)     Opening a pharmacy.- This is the worst nightmare that a company must go through if it is planning to come to Peru, incorporate a company here, and obtain the health authorization and sanitary registration that it needs to operate in Peru.

The process involved in the issuance of the sanitary authorization required by a pharmacy takes 3 months and the applicant must wait until the issuance of this authorization to apply for the sanitary registration of pharmaceutical drugs, a procedure that will last another 12 months. This means that, in the best case scenario, the applicant will not be able to sell any products until after a period of 15 months counted as from the start of the corresponding procedure with DIGEMID.

Meanwhile, during this period of 15 months, the company must pay rent for a warehouse that it is not using; the fee charged by a pharmaceutical chemist, only to comply with the requirement of having a Technical Director; the overhead expenses of an office that it is not using; the fee charged by an accountant to prepare the tax returns that the company is obliged to file because it already has a Taxpayer’s ID card (RUC), as required by DIGEMID, although it is not selling any products yet, etc.

Solution: Allow the filing of sanitary registrations without the requirement of having the pharmacy incorporated first.

And we could continue making recommendations to simplify paperwork at DIGEMID. However, we would like to stress that it has nothing to do with DIGEMID’S employees. In fact, what we actually need to do is to modify the existing legal framework which obliges DIGEMID’S employees to follow cumbersome and unreasonable procedures.