Product quality and safety_Joincare Pharmaceutical Group Industry Co., Ltd.

Product Quality and Safety

Adhering to the basic principles of "risk management, whole-process control, and social co-governance”, Joincare has established and refined, on a sustained basis, the quality management system, which covers the entire lifecycle of medicines, including R&D, production, sale and use to improve product quality and ensure safe and effective medicines.

Quality Management System

We have continuously improved the quality management system, integrating quality and safety into every stage of the lifecycle of products.

Certification of the Quality Management System

Name

Certification

Joincare

GB/T19001-2016/ISO 9001:2015

Taitai Pharmaceutical

GB/T19001-2016/ISO 9001:2015

Joincare Haibin

ISO 9001:2015

Jiaozuo Joincare

GB/T19001-2016/ISO 9001:2015

Fuzhou Fuxing

GB/T19001-2016/ISO 9001:2015

Ningxia Pharmaceutica

ISO 9001:2015/ISO 22000:2018

Livzon Diagnostics

ISO 13485:2016

Quality Culture Cultivation

Joincare attaches great importance to product quality training and publicity, and conducts training, quality month activities and quality culture promotion every year to enhance staff awareness of product quality and their product quality management capability, thus creating a corporate culture centred on product quality and safety.

100 %

quality training coverage

400 +

quality-related training sessions during 2022

2,700 +

hours of quality-related training during 2022

Product Quality and Safety Objectives

Joincare continuously improved the quality management system and operation mechanism to enhance the quality control performance. We have set the overall quality goals, and continue to monitor the achievement of the goals every year. The goals include:

100 %

market sampling pass rate

1%

customer complaint rate is less than 1%

90%

customer satisfaction rate is greater than 90%

Supply Chain Management

Supply chain quality management is one of the priorities of Joincare to guarantee product quality, and we will strive to further control the quality of the supply chain.

Supplier Risk Assessment

Our Group comprehensively identify, evaluate and control the supply chain risks of key suppliers. The dimensions of risk assessment include environmental, social and governance impact and business relevance. Environmental, social and governance impacts will be assessed at three level: country-specific risk, industry-specific risk and commodity-specific risk.

Enterprise qualification

Enterprise financial status

Enterprise business environment

Enterprise product quality and service

Impact of environment and other EHS

Impact of national environmental protection regulations and policies

Impact of unusual climate

International trade environment and impact

Impact of international finance and exchange rate

Impact of major unexpected events

Impact of social events

Impact of festivals

Impact of business ethics

Impact of workers’ human rights

Dimension of supply chain risk assessment

Supply Chain Risk Mitigation System

To systematically cope with risks posing to supply chain stability, maintain production stability and ensure product quality safety, Joincare, taking into account its supply chain and businesses, has formulated comprehensive mitigation and emergency plans in response to the supply risks.

General response measures:

· Establish and improve dual sourcing plans, and build back-up manufacturing sites;

· Strengthen communication and sign long-term agreements with suppliers, and ensure priority in the delivery of material; urge suppliers’ performance of procurement agreements, and, when necessary, assign personnel to their plants for this purpose;

· Actively develop new suppliers to avoid exclusive supply, optimize supply chain distribution, and reasonably allocate the proportion of imported materials;

· Accelerate work related to sourcing, testing, certification, registration, etc. of domestic materials as replacements for imported materials;

· Regularly investigate the price trend of bulk key materials;

· Carry our regular visits to supplier to understand the production and operation of suppliers;

· Develop and deploy suppliers for key varieties in advance, and promote the quality improvement of alternative suppliers;

· Ensure the availability of 2-3 qualified suppliers in different regions for each type of material.

Specific response measures:

· For the key materials involved in key products, formulate supplier supplement plans, and develop and deploy suppliers in advance

· For materials supplied by high-risk suppliers, adopt a safety inventory strategy by establishing a reasonable inventory (to meet production needs of six months or up to one year), and carrying out dynamic management;

· For exclusively supplied materials that cannot be replaced temporarily, increase the frequency of on-site audit or jointly build bases to urge the supply and ensure product quality, so as to reduce supply risks;

· For suppliers of materials with long order cycle (such as imported materials), sign annual long-term agreements with them to ensure annual supply;

· Develop futures hedging business to hedge the risk of price fluctuations of bulk materials such as soybean oil, and to stabilize procurement costs.

Case: Active response to risks posing to supply chain stability at Joincare Haibin

To ensure stable production and product quality and safety, Joincare Haibin takes various measures to address supply risks. In addition, Joincare Haibin has formulated a plan for selecting new suppliers for major raw materials and excipents as well as packaging consumables in drug production. For some raw materials that cannot be produced in-house, such as terbutaline and salbutamol sulfate, Joincare Haibin promptly switch to alternative suppliers to ensure stable supply. For the excipents such as sodium chloride, hydrochloric acid, sulfuric acid, disodium edetate and Tween-80, Joincare Haibin has two suppliers to ensure material supplies. In addition, Joincare Haibin has several suppliers for packaging consumables.

For the key consumables from exclusive suppliers, such as liquid filter elements, Joincare Haibin actively seeks for domestic and overseas resources, in a bid to mitigate potential production risks resulted from the exclusive supply of key materials. So far, Joincare Haibin already has three suppliers for the filter elements.

Case: Jiaozuo Joincare ensures supply chain stability

To guard against risks posing to supply chain stability such as lack of products and supply shortage from cooperative suppliers, Jiaozuo Joincare actively find solutions to mitigate the supply risks in an all-round way. Following the market dynamics, Jiaozuo Joincare will increase inventories in case of tight supply and other abnormalities. To avoid the supply failure of suppliers, Jiaozuo Joincare continues to tap into cooperation opportunities with new suppliers in various regions to diversify supply channels. To address product shortages, Jiaozuo Joincare attempts to find alternatives to ensure stable supply.

Supplier training on quality assurance

We pay attention to the quality capacity building of suppliers and carry out training for suppliers on an annual basis to help them improve product quality. We also actively assist suppliers in improving their management, and provides guidance in various aspects.

Case: Supplier training on quality assurance

Joincare’s holding subsidiary Livzon Group, together with its supply partners, is actively exploring ways for quality improvement. In December 2022, Sichuan Guangda held a quality control training for suppliers, which was actively attended by 30 suppliers of production materials, including suppliers of bulk medicinal materials, raw materials/auxiliary materials, and packaging materials. During the training process, Sichuan Guangda emphasized the contents such as acceptance criteria and usage requirements of commonly used traditional Chinese medicinal materials, supplier quality requirements, quality audit management procedures, quality agreement requirements, supplier rating schemes, EHS audit requirements, target management requirements of energy conservation and emission reduction, etc. Discussions were held on the summary of material quality issues. This training further improved the communication between the two parties and strengthened the suppliers’ understanding of the Company’s quality requirements, thereby helping improve the quality of the supply chain.