Medicinal product distribution in the Czech Republic

Summary in Points

The distribution of pharmaceuticals in the Czech Republic is a highly regulated activity that requires a permit from the State Institute for Drug Control (SÚKL), compliance with Good Distribution Practice rules, and a sophisticated risk management system. At the same time, the boundary between medicinal products and food supplements is increasingly being addressed in practice, as supplements fall under food law and have a different approval regime, but are often manufactured, packaged, and distributed through similar channels as pharmaceuticals. 

For entrepreneurs and investors, obtaining the actual permit to distribute pharmaceuticals is not the only decisive factor, but rather the comprehensive setup of the entire commercial, operational, and regulatory framework, including the correct classification of products, contractual liability arrangements, and readiness for inspections by SÚKL, food surveillance authorities, and other regulators.

In the following summary, you will find three key conclusions that are typically decisive for business owners, investors, and management.

The first point is that the distribution of pharmaceuticals in the Czech Republic is only possible on the basis of a SÚKL permit, without which any distribution is legally illegal, and violations carry fines of up to twenty million CZK and the virtual liquidation of the business.

The second point is that a pharmaceutical distributor must demonstrably meet the requirements of Good Distribution Practice (GDP), particularly in the areas of storage, transport, documentation, pharmacovigilance, and reporting, with inspections focusing not only on the status at the time the permit is granted but also on ongoing compliance with standards.

The third key point is that food supplements are, from a legal perspective, "just" food, subject to different regulations and a notification regime with the Ministry of Health, but their incorrect presentation or composition can lead to reclassification as a medicinal product with retrospective impacts, sales bans, and sanctions. Our text How to tell if your product falls under SÚKL, SZPI, or ČOI also covers the practical impacts of reclassification and market surveillance in more detail.

In practice, for entrepreneurs, this means that the strategic decision of whether to enter the pharmaceutical distribution segment, the food supplement segment, or both, has a fundamental impact on capital requirements, compliance, contractual documentation, and reputational risks, and it is worth preparing this with the Czech legal team at the Prague-based ARROWS law firm so that the entire model stands up before SÚKL, food inspections, and business partners.

Distribution of Pharmaceuticals under Czech Legislation: Basic Framework and Difference from Food Supplements

The basic starting point for the entire issue is the legal definition of a medicinal product.  Act No. 378/2007 Coll., on Pharmaceuticals and on Amendments to Certain Related Acts (the Act on Pharmaceuticals), stipulates that a medicinal product is a substance or combination of substances presented as having therapeutic or preventive properties in human beings, or a substance that may be used in or administered to human beings either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis.

This definition is relatively broad, which is why borderline situations often arise in practice where a manufacturer or distributor presents a product as a food supplement, but supervisory authorities may assess it as a medicinal product due to its active ingredient content, form, or marketing claims. When setting up internal processes and contractual liability in a regulated healthcare environment, it can also be useful to draw on our experience in medical law.

Conversely, a food supplement is explicitly defined under Czech legislation in Act No. 110/1997 Coll., on Foodstuffs and Tobacco Products and on Amendments to Certain Related Acts, as a foodstuff the purpose of which is to supplement the normal diet and which is a concentrated source of vitamins, minerals, or other substances with a nutritional or physiological effect, marketed in dose form, such as tablets, capsules, or drops.

Food supplements therefore fall under the Act on Foodstuffs and Tobacco Products, not under the Act on Pharmaceuticals, and are subject to both the general requirements of food law and the special Decree No. 58/2018 Coll., on Food Supplements and Food Composition, which, among other things, regulates mandatory labeling and the conditions of use of certain plants and other substances. 

The difference in legal classification has fundamental impacts not only on the requirements for placing products on the market, but also on subsequent distribution and marketing. Specifically, the risks of presenting "therapeutic effects" and potential sanctions are addressed in the article What do you risk when claiming "therapeutic effects" without registering a medicine. The differences are also significantly reflected in the approval process prior to marketing. 

Medicinal products undergo a registration procedure in which SÚKL assesses their quality, safety, and efficacy for specific indications; this includes clinical trials meeting strict criteria under special legal regulations.

Without a final decision on registration, a medicinal product cannot be placed on the market in the Czech Republic, even to a very limited extent, with the exception of specific therapeutic programs and special regimes, which are themselves regulated in detail. In practice, these requirements are reflected in the setup of supplier-customer relationships and liability, where legal support in the area of contracts and negotiations can help. 

On the other hand, placing a food supplement on the market in the Czech Republic is subject to a notification procedure with the Ministry of Health, in which the health safety of the product is assessed; however, this is not a full-fledged registration of efficacy in the sense of a medicinal product.

A fundamental difference also lies in what claims can be used on the product and in marketing. Food supplements must not declare properties of preventing, treating, or curing a disease, nor refer to such properties, otherwise they risk being considered an unregistered medicinal product. 

Furthermore, for food, including food supplements, a regime of nutrition and health claims applies, which can only be used if they have been approved at the EU level based on a scientific assessment by the European Food Safety Authority (EFSA) under Regulation (EC) No 1924/2006 of the European Parliament and of the Council on nutrition and health claims made on foods.

Conversely, for medicinal products, marketing and informational communications must be based on the Summary of Product Characteristics (SmPC) approved during registration, and advertising of pharmaceuticals is regulated by Act No. 40/1995 Coll., on the Regulation of Advertising.

For entrepreneurs, it is crucial to realize that the boundary between a food supplement and a medicine is not determined solely by the form of the product (tablet vs. capsule) or its placement on a pharmacy shelf, but by a combination of composition, dosage, and, above all, the method of presentation to customers. 

In practice, we see marketing departments preparing communication essentially as if for a medicinal product, while the product is formally registered as a food supplement – this significantly increases the risk of regulatory intervention and reclassification with a retrospective ban on distribution, an obligation to recall the product from the market, and potentially fines. 

Lawyers from the Prague-based ARROWS law firm therefore commonly recommend that clients address not only the composition and legislative limits but also the intended communication concept as early as the product development phase, so that the entire strategy is consistent and sustainable.

What is "Pharmaceutical Distribution" and When Do You Need a SÚKL Permit

The Act on Pharmaceuticals defines the distribution of medicinal products very broadly as all activities consisting of obtaining, holding, supplying medicinal products, including supplying within the EU and exporting to third countries, and related commercial transfers, regardless of whether the activity is carried out for consideration or free of charge. 

Distribution therefore typically includes wholesale purchasing from manufacturers or other distributors, storage in a distribution warehouse, supply to pharmacies and healthcare facilities, but also logistics associated with exporting medicines abroad or special models of direct distribution between the manufacturer and selected pharmacies. However, this does not include dispensing to patients, which is reserved for pharmacies and is subject to a different regime, nor the regular sale of food, including food supplements.

A key practical point is that a decision on a permit to distribute medicinal products issued by SÚKL is a necessary condition without which the distribution of pharmaceuticals in the Czech Republic cannot be carried out at all. The permit is mandatory for both Czech and foreign entities wishing to distribute medicines from the Czech Republic, and applies to both human medicinal products and veterinary medicines (although for the latter, the Institute for State Control of Veterinary Biologicals and Medicines decides).

Without a valid permit, it is not possible to legally purchase medicines from manufacturers and other distributors, nor to supply them to pharmacies or hospitals, even in the case of limited volumes or free-of-charge deliveries.

From the perspective of sanctions, it must be kept in mind that unauthorized distribution of pharmaceuticals represents a serious violation of the Act on Pharmaceuticals, carrying fines of up to twenty million CZK for legal entities and self-employed individuals. In addition to financial penalties, SÚKL may impose measures consisting of suspending or revoking the distribution permit, which in practice means stopping the distributor's activities and often wasting the entire investment in warehouse and logistics capacities. 

Furthermore, for certain offenses, the law assumes the liability of specific individuals (for example, the distributor's qualified person), and the penalty can have a significant personal impact on management, including a ban on activity or personal fines of up to CZK 500,000.

In contrast, the distribution of food supplements is significantly less demanding in terms of licensing. Since food supplements are foodstuffs, entrepreneurs only need to meet the requirements of food law, including registering as a food business operator, implementing a HACCP system, and fulfilling the notification obligation to the State Agricultural and Food Inspection Authority (SZPI) or the State Veterinary Administration (SVS), if relevant. 

A SÚKL permit for the distribution of food supplements is not required; however, when distributing them through the pharmacy channel, it is necessary to respect the internal rules of business partners and potentially specific quality and safety requirements.  It follows that an entrepreneur wishing to operate in the healthcare products market must very carefully consider which segment and what level of regulation they are willing to accept.

How to Obtain a Permit to Distribute Medicinal Products

The process of obtaining a permit to distribute medicinal products in the Czech Republic is regulated primarily under Czech legislation by the Act on Pharmaceuticals and implementing Decree No. 229/2008 Coll., on the Manufacture and Distribution of Pharmaceuticals. These regulations transpose the requirements of European Union law, in particular Directive 2001/83/EC on the Community code relating to medicinal products for human use, and supplement them with national regulation of certain procedural details and supervisory mechanisms.

The area of distribution is regulated in the Act on Pharmaceuticals mainly in the provisions on the obligations of distributors, including the obligation to comply with Good Distribution Practice, report distribution data, and ensure a system for recalling medicines from circulation.

The State Institute for Drug Control (SÚKL) is the administrative authority that decides on permits for the distribution of human medicinal products, monitors compliance with conditions, and imposes sanctions in the event of violations. 

Before starting distribution activities, it is necessary to apply to SÚKL in advance for a permit, and without this permit, distribution cannot be legally performed. SÚKL also issues guidelines and methodologies that specify practical requirements for distributors and often go beyond the actual wording of the law, for example, in the area of temperature monitoring during the storage and transport of medicines. For entrepreneurs, it is important to follow not only statutory regulations but also these sub-statutory guidelines, as they are decisive in practice during inspections.

In recent years, the legal regulation of pharmaceutical distribution has been continuously changing, particularly in response to issues with re-exports, shortages of certain medicines, and EU requirements to strengthen pharmacovigilance. Amendments to the Act on Pharmaceuticals, for example, have tightened distributors' reporting obligations to SÚKL, especially in connection with the distribution of medicines abroad and for products with limited availability status.

The changes also affect the amount of fines for failing to keep or retain records, which can reach up to twenty million CZK for healthcare providers (including pharmacies). From the perspective of strategic company management, it is therefore necessary to continuously monitor legislative developments and not take a once-established compliance system as definitive.

Prerequisites Before Submitting an Application: Business and Operational Readiness

Before an entrepreneur even applies for a permit to distribute medicinal products, they must ensure the basic prerequisites for performing the activity. First and foremost, this involves authorization to do business in the relevant field, typically in the form of a trade license in the wholesale area; however, a trade license alone is not sufficient for the distribution of medicines and is only of a general nature.

Obtaining a business identification number (IČO) is therefore only the first step, and pharmaceutical distribution cannot be started solely on the basis of a trade license, as this would be an illegal activity in violation of the Act on Pharmaceuticals. The readiness of storage and operational premises in accordance with Good Distribution Practice requirements is also crucial. The distributor must ensure that the premises, installations, and equipment used for storing and distributing medicines correspond to the type and volume of distributed products, including ensuring the temperature regime, protection against contamination, and security against theft and unauthorized access. 

In practice, this means investments in storage technology, temperature monitoring, security systems, and IT infrastructure for recording and traceability of batches. During inspections, SÚKL assesses not only formal descriptions but also the actual technical condition and operational procedures.

An important personnel prerequisite is securing a qualified person for the distributor, who is responsible for compliance with Good Distribution Practice rules and for ensuring that distribution activities are carried out in accordance with the law and internal regulations. The requirements for a qualified person are based on the European framework and require appropriate professional education and experience in the field of pharmacy or related disciplines, with at least two years of experience in the field of pharmaceutical distribution. 

From the perspective of risks, it is essential that the qualified person has independent liability for serious breaches of their duties and can be fined up to CZK 500,000, while the distributor as a legal entity is responsible for ensuring the services of the qualified person and that they meet the required professional prerequisites.

Submitting the Application for a Permit and Its Requirements

The application for a permit to distribute medicinal products is submitted to SÚKL on the prescribed form, which is specified in guideline DIS-8 and is based on the requirements defined in the Decree on the Manufacture and Distribution of Pharmaceuticals. The form is usually available in electronic format, and the application can be submitted via data box, by mail, or in person to SÚKL's designated address.

In addition to the completed form itself, the application must contain a number of mandatory attachments, such as documentation of storage premises (floor plans, technical reports), proof of the right to use the premises (lease agreement or title deed), internal directives and standard operating procedures (SOPs), and documents proving the qualifications of key personnel.

The submission also includes proof of payment of the administrative fee, which is paid cashless based on a variable symbol generated using SÚKL's interactive form; the payment is documented by a printed form indicating the date of payment. 

As of 2024, administrative fees can no longer be paid with revenue stamps. The administrative fee is relatively marginal in terms of total investment in the distribution business; however, errors in its payment or documentation can lead to unnecessary delays in the proceedings, because if the application is incomplete, SÚKL will request the applicant to supplement it, and the decision-making period only begins to run once the defects are resolved.

In well-prepared projects, it is therefore worth paying attention to these "procedural details," which can ultimately determine whether you obtain the permit within months or a longer period. After the application is submitted, SÚKL confirms its receipt and checks the completeness of the documents. 

In case of deficiencies, it will request the applicant in writing to supplement them, which in practice means that if the documentation is not prepared carefully, the process can be extended by several weeks or months. 

The statutory period for processing a complete application is 90 days; however, in practice, it is necessary to expect that the total time from the first submission to the decision becoming final can be around three to six months, depending on the applicant's readiness and the workload of the inspectors. 

Lawyers from the Prague-based ARROWS law firm help clients in these cases as early as the project planning phase so that the documentation and processes meet SÚKL's expectations and the proceedings run without unnecessary delays.

On-Site Inspection and Issuance of the Decision

Before issuing a permit to distribute medicinal products, SÚKL conducts an on-site investigation, during which inspectors verify whether the applicant meets the legal conditions in practice, including the requirements of Good Distribution Practice. The inspection typically focuses on the physical condition of storage and operational premises, the setup of temperature regimes and monitoring, security against unauthorized access, documentation including SOPs, records of the movement of medicines, and readiness of systems for recalling medicines from circulation (recall).

Inspectors also assess the provision of a qualified person, their actual participation in managing the distribution system, and documentation of employee training. If the inspection proves compliance with the requirements, SÚKL issues a decision on the permit to distribute medicinal products, in which it may also set specific conditions, such as restrictions to certain types of medicines or requirements to supplement certain procedural measures. 

Once the decision becomes final, the distributor is registered in the national registry and the European EudraGMDP database, and is assigned a distributor code used in communication with business partners and supervisory authorities. Only from this moment is it possible to legally start purchasing and selling medicinal products; any distribution activity prior to this point is highly risky.

If the inspection reveals serious deficiencies, SÚKL may refuse to issue the permit or condition it on a repeat inspection after the identified errors are corrected. Such a scenario means not only a delay in starting the business but also additional costs for modifying premises, systems, and documentation. 

The experience of lawyers from the Prague-based ARROWS law firm shows that some problems arise from underestimating details – for example, incompletely described and impractical SOPs, insufficiently documented temperature mapping of warehouses, or unclear definitions of responsibilities between the distributor and an external logistics partner. This is precisely why it is advantageous to have an independent "pre-audit" conducted before the inspection, simulating the procedure of SÚKL inspectors.

Good Distribution Practice (GDP) and Operational Requirements

Good Distribution Practice (GDP) is a set of rules and guidelines aimed at ensuring that medicinal products are protected from deterioration, falsification, and other risks during distribution, and that they reach patients in the declared quality, safety, and efficacy. 

GDP builds on Good Manufacturing Practice (GMP) and creates a continuous quality management system from the manufacturer to the healthcare provider or pharmacy, and in some cases beyond, such as when supplying research facilities or specific therapeutic programs.

From a legal perspective, this is a binding standard, compliance with which is mandatory for distributors, and violations can lead to sanctions, including the restriction or revocation of the permit.

GDP covers, in particular, the areas of quality control, storage, transport, documentation and traceability, staff training, handling complaints and recalling medicines from the market, and preventing the falsification of medicinal products. In practice, this is reflected in detailed standard operating procedures (SOPs), technical equipment of warehouses and transport vehicles, and IT systems that allow tracking the movement of individual batches and verifying their authenticity. 

For company management, this means that pharmaceutical distribution is not just a matter of logistics and trade, but a fully-fledged area of risk management that requires the active participation of leadership, the compliance department, and the qualified person.

Storage, Temperature, and Technical Requirements

For the storage of medicinal products, the Decree on the Manufacture and Distribution of Pharmaceuticals and subsequent SÚKL guidelines stipulate specific requirements for premises, equipment, and monitoring of conditions. Medicines must be stored under the conditions specified in the registration decision and in the package leaflet, particularly regarding temperature, humidity, protection from light, and contamination.

Storage temperatures are typically divided into storage at room temperature (15–25 °C), cool (8–15 °C), refrigerator (2–8 °C), and freezer box (−15 °C and below), with continuous temperature monitoring using suitable equipment required for thermolabile medicines.

SÚKL guideline DIS-15 sets out basic requirements for ensuring, controlling, and documenting temperature during the storage and transport of medicines, including the use of calibrated thermometers, temperature maps, and alarm systems. For cooling and freezing equipment, it is necessary to regularly verify the temperature distribution in the space through temperature mapping, especially after renovations or interventions in cooling units that may affect the temperature profile.

Temperature records must be retained and, in the case of electronic formats, also backed up; during SÚKL inspections, inspectors focus not only on the existence of records but also on the method of responding to any deviations and evaluating the impact on the quality of the medicines.

In a hospital environment, where medicines are further stored in departments, similar rules apply, including regular temperature monitoring, suitable arrangement of storage spaces, protection from moisture, and locking systems for medicine cabinets to prevent unauthorized access. 

For distributors, it is essential that their liability ends only upon handing over the medicine to the authorized entity (pharmacy, healthcare provider, another distributor), and they must be able to prove that until then, the storage and transport conditions complied with registration and GDP requirements. Any deterioration of goods due to incorrect temperature can have significant financial impacts, including the need to destroy stock and claims from manufacturers or customers.

Documentation, Traceability, and Reporting

GDP places great emphasis on documentation and traceability, which is one of the pillars of the fight against falsified medicines and a tool to ensure the possibility of rapidly recalling a product from the market. A distributor must maintain records of all movements of medicinal products to a sufficient extent for at least five years, including details of suppliers, customers, quantities, batch numbers, and delivery dates.

Each delivery of a medicinal product must be accompanied by documentation that allows tracking the path of the medicine, including the identification of the customer and supplier; if the customer is simultaneously a pharmacy and a distributor, the documentation must distinguish whether they accepted the delivery in the role of a pharmacy or a distributor, which is important for the subsequent distribution chain and liability.

In addition to internal records, the Act on Pharmaceuticals obliges distributors to regularly provide SÚKL with complete and correct data on deliveries of human medicinal products through electronic reporting in accordance with the implementing decree. This concerns, in particular, data on the volume of distributed medicines, the structure of customers, and other parameters that SÚKL uses to monitor the availability of medicines on the market and to identify potential problems with re-exports. 

Furthermore, the distributor is obliged to electronically notify in advance the intention to distribute abroad a medicinal product that is on the list of products with limited availability, and to provide data on the quantity, target country, and planned date of distribution.

Breach of reporting obligations is classified by law as an administrative offense and can lead to fines, with the amendment to the Act on Pharmaceuticals strengthening the importance of these obligations in connection with protecting the availability of medicines for patients in the Czech Republic. 

In practice, it turns out that setting up internal IT systems and processes for timely and correct reporting is often a weak point, especially for rapidly growing distributors or when a company transitions to a new ERP system. 

Lawyers from the Prague-based ARROWS law firm therefore recommend linking legal requirements with IT and process design at the very beginning of the project to prevent additional costly modifications and the risk of sanctions.

Medicine Recall System, Complaints, and Falsification

Part of the distributor's obligations is to ensure an effective system for recalling medicinal products from circulation (recall) in the event of quality defects, safety signals, or suspected counterfeits. The distributor must have established procedures for rapidly identifying affected batches, informing customers, organizing the logistical return of products, and communicating with the marketing authorization holder and SÚKL.

In situations where patient safety is threatened, the speed and reliability of these systems play a crucial role, and SÚKL during inspections assesses not only formalized guidelines but also actual testing and experience with real or mock recall actions.

The issue of counterfeit medicines has a global dimension and affects legal distribution channels, although data shows that counterfeits are still relatively rare on the legal market in the Czech Republic. Nevertheless, distribution is one of the critical links where the infiltration of counterfeits can occur, especially if the distributor insufficiently verifies its suppliers or customers and does not have effective processes in place to check safety features on the outer packaging of medicines under Commission Delegated Regulation (EU) 2016/161 supplementing Directive 2001/83/EC. 

The distributor is obliged to verify whether the medicinal products received by them are not falsified, including by checking these safety features, and at the same time must obtain medicines only from manufacturers or other authorized distributors.

A correctly set up system for handling complaints and communicating with manufacturers and pharmacies is important not only from a compliance perspective but also in terms of business relationships and the distributor's reputation. Insufficient or slow response to complaints and suspected quality defects can damage relationships with key partners and redirect business flows to other distributors. 

The Prague-based ARROWS law firm helps clients in these situations not only with setting up internal guidelines but also with negotiating contractual terms with manufacturers and customers so that liability and processes during recalls and complaints are clearly divided.

Legal Regime of Food Supplements and Notification

As already mentioned, food supplements are classified as food under Czech legislation and are subject to the Act on Foodstuffs and Tobacco Products and related European regulations. 

Specific national regulation is contained in Decree No. 58/2018 Coll., on Food Supplements and Food Composition, which transposes Directive 2002/46/EC of the European Parliament and of the Council on the approximation of the laws of the Member States relating to food supplements, and regulates in more detail the composition of supplements, mandatory labeling, and the use of certain plants and substances.

Food supplements in the Czech Republic are assessed and approved by the Ministry of Health, which verifies the health safety of the product during the notification procedure, particularly in terms of composition, purity, and recommended daily dose. To place a food supplement on the market, it is necessary to send the text of the Czech label to the Ministry of Health, and the product is subsequently entered into the registry of decisions of the Chief Hygienist. 

From the perspective of the manufacturer and distributor, the responsibility for meeting the requirements of food law lies fully with the food business operator, who must ensure that the product contains only approved bioavailable forms of vitamins and minerals, health-promoting rather than risky plant extracts, and that it does not contain chemical or microbiological contaminants. The safety assessment is carried out by the National Institute of Public Health based on the submitted documentation and laboratory analyses.

The Decree on Food Supplements contains annexes with a list of plants and other substances that can or cannot be used in the manufacture of supplements, and also stipulates the conditions of their use; however, these lists are not exhaustive, and when developing new products, it is often necessary to combine various food law regulations. 

From January 1, 2026, an amendment to this decree takes effect (Decree No. 200/2023 Coll., specifically the part concerning Annex No. 5), which, among other things, updates the lists of permitted and prohibited substances and specifies certain labeling requirements, which is significant for manufacturers and distributors in terms of product portfolio planning. The Prague-based ARROWS law firm therefore recommends that clients already take the future wording of the decree into account when designing compositions and labels to avoid the need for subsequent changes.

Nutrition and Health Claims and Marketing of Food Supplements

Food supplements are subject to the regime of health and nutrition claims under Regulation (EC) No 1924/2006 of the European Parliament and of the Council on nutrition and health claims made on foods, which aims to ensure that claims made on labels or in advertising are truthful, scientifically substantiated, and understandable to the average consumer.

Health claims link a food or one of its components to a specific health benefit, for example, "vitamin C contributes to the normal function of the immune system," and can only be used if they have been approved and listed in the Union list of permitted claims. Nutrition claims, such as "source of fiber" or "low fat," refer to the composition of the food and are also subject to regulation.

Food supplements must not declare that they treat or prevent diseases; they must not contain claims that could lead consumers to believe that the product replaces medical care or treatment, or that it is comparable to a medicinal product. 

In practice, however, we often see advertisements that balance on the edge of permitted claims and use formulations that, while formally in compliance with the law, in combination with visuals and context, create the impression of a therapeutic effect. From the regulator's perspective, the overall tone of the communication is decisive, not just the text of the labels or advertising in isolation.

The regulation of advertising for food supplements falls primarily under the general regulation of food advertising and misleading commercial practices, but at the same time, it must not violate the rules of Act No. 40/1995 Coll., on the Regulation of Advertising, in the part concerning references to state administration authorities or abusing the authority of healthcare professionals. 

A fundamental difference compared to medicines is that advertising for food supplements can be targeted directly at consumers without restriction, whereas for prescription-only medicines, advertising is intended only for the professional public and is prohibited for general consumers. This asymmetry creates significant marketing space for food supplements, but at the same time increases the risk of regulatory intervention if product communication crosses the boundary between food and medicine.

Borderline Situations and the Risk of Reclassification as a Medicine

In business practice, a very common problem is borderline situations where a product formally declared as a food supplement contains substances or uses marketing claims that are close to medicines. 

The Act on Pharmaceuticals and related case law are based on the principle that if a product meets the definition of a medicinal product, it is subject to the regime of medicines, regardless of how the manufacturer or distributor has labeled it. The regulator can therefore, and in some cases must, intervene and reclassify the product as a medicinal product, which has dramatic consequences for the possibility of its further distribution.

Typically, the problem appears in products with high doses of vitamins, minerals, or plant extracts, for which there are studies on therapeutic effects, and which are marketed as solutions to specific health problems. If a product declares, for example, "treatment of joint pain" or "normalization of blood pressure" and contains high doses of pharmacologically active substances, it is likely to be assessed as a medicinal product by supervisory authorities.

The consequence can be a ban on placing the product on the market as a food supplement, an obligation to recall the product from distribution, destruction of stock, and, in extreme cases, the initiation of administrative proceedings for illegally placing a medicinal product on the market without registration, with fines of up to 20 million CZK.

Another risk factor is non-compliance with legislative requirements for the composition of food supplements, especially if the product contains substances listed in the annexes to the decree as prohibited or restricted, or substances whose use in food is not generally permitted. 

In such a case, the food surveillance authority may order the recall of the product from the market, impose a fine, and potentially inform other authorities, including SÚKL, if it believes the product meets the characteristics of a medicine. Here too, the responsibility for the composition and safety of the product lies with the food business operator.

Commercial and Contractual Setup of Distribution: Relations with Manufacturers, 3PL, and Pharmacies

In the pharmaceutical distribution market, several business models are applied, which have different impacts on contractual relationships, liability, and regulatory risks. In addition to the classic wholesale distribution model, where the distributor purchases medicines from manufacturers and sells them to pharmacies or hospitals, there are also DTP (direct-to-pharmacy) and DTH (direct-to-hospital) models, in which the manufacturer supplies medicines directly to selected pharmacies or hospitals, while the distributor performs more of a logistical function.

The Office for the Protection of Competition stated in its sector inquiry that DTP/DTH models do not a priori have a negative impact on competition and can contribute to more effective control of medicine circulation and a reduction in re-exports, however, care must be taken to ensure they are set up in a non-discriminatory and transparent manner.

For distributors and manufacturers, it is important to keep in mind that the way business models are set up can affect the position of individual types of pharmacies, especially independent versus chain pharmacies, and that the regulator monitors potential market distortions, for example, through disproportionate rebates or selective supply. 

In considerations regarding the pricing of reimbursed medicines, recommendations also appear to cap the trade margin of individual entities to prevent worsening the position of pharmacies and hospitals when purchasing these medicines. When preparing distribution agreements and bonus schemes, it is therefore advisable to assess not only contractual and regulatory but also competition aspects, ideally in cooperation with competition law experts.

Contractual Relations with Manufacturers, Logistics Partners, and Customers

The contractual framework between the distributor, manufacturer, logistics partners, and customers (pharmacies, hospitals, other distributors) is crucial for dividing liability, setting prices, bonuses, delivery terms, and managing risks such as recalls, damage to goods, or counterfeits.

Contracts should reflect the specifics of the pharmaceutical market, including the distributor's obligation to obtain medicines only from authorized persons and supply them only to authorized customers, which may require a process of verifying partners' authorizations and a contractual commitment of partners to provide related documents and information.

When using 3PL or other logistics partners, it is necessary to contractually address compliance with GDP requirements, including a detailed definition of liability for temperature monitoring, record keeping, responding to deviations, securing warehouses and transport vehicles, or enabling SÚKL inspections on the partner's premises. 

The distributor, as the permit holder, cannot transfer regulatory liability to the 3PL, and must therefore have rights to audit, reporting, compensation for damages, and clear procedures for crisis situations embedded in the contracts. The experience of ARROWS shows that unclear or formally set up contracts with logistics partners are often a weak link during SÚKL inspections.

Relations with pharmacies and hospitals must also reflect the distributor's obligation to ensure deliveries of medicines in quantities and at time intervals corresponding to the needs of patients in the Czech Republic, especially for reimbursed products and products with limited availability status.

Amendments to the Act on Pharmaceuticals emphasize the obligation of distributors to supply pharmacies with certain products within a short period, typically within two business days of receiving the order, which affects logistical planning and stock levels. Failure to meet these obligations can lead not only to sanctions but also to reputational damage and the loss of business partners.

Commercial and Regulatory Problems in Pharmaceutical Distribution

If you want to be sure that your contractual setup for the distribution of medicines and food supplements reflects all regulatory, commercial, and competition aspects, it is advisable to involve lawyers from the Prague-based ARROWS law firm as early as the preparation of the business model.

Risks, Sanctions, Inspections, and Specifics of Narcotics and International Elements

As already indicated, the Act on Pharmaceuticals stipulates high sanctions for legal entities and self-employed individuals for violating obligations in the manufacture and distribution of medicinal products. For unauthorized distribution without a permit, supplying medicines to unauthorized persons, non-compliance with Good Distribution Practice rules, or failing to meet reporting obligations, SÚKL can impose a fine of up to twenty million CZK.

For specific qualified persons, such as the manufacturer's qualified person or the distributor's qualified person, personal fines of up to CZK 500,000 can be imposed for serious breaches of their duties.

Draft laws and amendments in recent years aim to further tighten sanctions, especially in connection with re-exports and insufficient record-keeping of medicines. For example, an amendment to the Act on Pharmaceuticals (effective from January 1, 2022) strengthened the importance of these obligations and increased the fine for failing to keep or retain records in pharmacies and with healthcare providers up to twenty million CZK, as failing to keep records can serve to mask illegal re-exports of medicines. 

In practice, fines in the range of hundreds of thousands to one and a half million CZK have already been imposed for failing to record medicines, and after the legislation is tightened, sanctions are expected to be even stricter. In addition to administrative sanctions, distributors also face significant private law liability for damages to manufacturers, customers, or patients if, as a result of a breach of duty, medicines are damaged, become unavailable, or injury to health occurs. 

In some cases, misconduct can also have criminal law impacts, for example, if it involves intentional falsification of medicines or conscious circumvention of measures against re-export. 

For this reason, it is essential to have adequate liability insurance in addition to legal and compliance setups, with the Prague-based ARROWS law firm itself possessing professional liability insurance coverage of up to CZK 350,000,000, which gives clients peace of mind when entrusting complex cases.

Inspections by SÚKL and Other Authorities: How They Work and What They Focus On

Pharmaceutical distributors can expect regular inspections by SÚKL, which are aimed both at verifying compliance with permit conditions and at ongoing monitoring of compliance with GDP, reporting obligations, and other aspects. Inspections can be planned or random, or triggered by a specific impulse, such as in connection with a quality defect, the unavailability of a certain medicine, or suspicion of unauthorized re-export. 

During inspections, SÚKL has the right to enter the distributor's premises, request documents, temperature records, delivery records, contracts with partners, and other materials, and the distributor's employees are obliged to cooperate.

In addition to SÚKL, other authorities can also inspect distributors, such as food surveillance authorities (SZPI, SVS) in the case of food supplements, the Office for the Protection of Competition in connection with distribution models and price agreements, or the labor inspection in connection with OHS and labor law aspects if the distributor operates large warehouses. 

In the case of the distribution of narcotic and psychotropic substances, the Inspectorate of Narcotic and Psychotropic Substances of the Ministry of Health comes into play, supervising compliance with specific obligations in the handling of addictive substances. For management, it is important to understand inspections not just as a one-off "test," but as an ongoing mechanism that must be actively worked with, for example, through internal audits and regular training.

The Prague-based ARROWS law firm often helps clients both with preparing for an inspection, for example in the form of a simulated inspection, and with representation during the inspection itself and in any subsequent administrative proceedings. 

Lawyers can be present during negotiations with SÚKL, help structure communication, argue on disputed issues, and, if necessary, prepare an appeal against a decision or a lawsuit in court. It is advantageous for the distributor to have this "Plan B" prepared in advance, rather than only when the first report with negative findings appears.

Distribution of Narcotic, Psychotropic, and Psychomodulatory Substances

If a distributor plans to also distribute medicines containing narcotic and psychotropic substances, special requirements of Act No. 167/1998 Coll., on Addictive Substances and on Amendments to Certain Other Acts (the Act on Addictive Substances), apply to them in addition to the general regime of the Act on Pharmaceuticals.

The distribution of such medicines additionally requires a permit to handle addictive substances issued by the Ministry of Health, which assesses compliance with strict safety and recording standards, including securing warehouses, restricting access to authorized persons, and more detailed recording obligations. Non-compliance with these regulations can have criminal law impacts in addition to administrative sanctions, as the handling of addictive substances is strictly penalized.

From January 1, 2025, Act No. 17/2024 Coll., on Psychomodulatory Substances and on Amendments to Certain Other Acts, takes effect, bringing a new framework for handling a wider spectrum of psychomodulatory substances. 

Part of the changes is, among other things, a new setup for administrative fees, which can no longer be paid with revenue stamps, but only by transfer to a bank account, which is a practical detail affecting every entity applying for licenses in this area.

For distributors planning to deal with this type of product as well, it is essential to assess the impacts of the new legislation on their business model and set up the compliance system to reflect both the Act on Pharmaceuticals and the regulations on addictive and psychomodulatory substances. 

In this specific area, interaction with the police, customs administration, and international authorities is more intense, and errors in records or security can have fundamental consequences. Lawyers from the Prague-based ARROWS law firm, thanks to their experience with the regulation of addictive substances and international overlaps, help clients set up processes so that they stand up not only before Czech but also foreign authorities, which is particularly important in cross-border distribution.

International Elements and Cross-Border Pharmaceutical Distribution

The distribution of medicines within the European Union is largely harmonized, especially regarding GDP requirements and mutual recognition of registrations; however, each Member State has its own regulation of certain procedural aspects and its own supervisory authorities.

A distributor based in the Czech Republic can distribute medicines to other Member States under its permit, but must respect both Czech and target legal regulations, and in the case of medicines with limited availability status, notify SÚKL in advance of the intention to distribute abroad.

In some cases, it is advisable to consider cooperation with local partners in the target countries or use a network of international legal advisors. When exporting medicines to so-called third countries outside the EU, requirements vary by specific market, and it is often necessary to meet additional registration, customs, and import requirements, including submitting certificates of compliance with GDP or issuing specific export certificates.

At the same time, it is necessary to expect potential export restrictions for medicines considered critically important in the Czech Republic, where the law and subsequent regulations stipulate restrictions on re-export to protect availability for Czech patients. 

The distributor's business strategy must thus combine knowledge of local regulation with international requirements, which is a typical example of a complex problem where it pays to use the experience of lawyers with an international reach.

Final Summary

The distribution of pharmaceuticals in the Czech Republic is a complex regulated activity that requires not only a formal permit from SÚKL but also long-term and systematic compliance with Good Distribution Practice requirements, reporting obligations, and other legislative and regulatory rules. 

Tightening sanctions, a growing emphasis on transparent record-keeping and reporting, and pressure to ensure the availability of medicines for patients in the Czech Republic increase the demands on distributors and their management, and errors that would mean only an administrative complication in other fields can lead to fines in the millions of CZK or even the revocation of the distribution permit here.

At the same time, food supplements, although often commercially attractive and marketing-wise more flexible, represent their own world of regulation as food, with the obligation of notification to the Ministry of Health, compliance with food law, and strict rules for health and nutrition claims; their incorrect presentation or composition can lead to reclassification as a medicinal product and retrospective impacts on distribution.

For entrepreneurs, investors, and top management, it is therefore crucial to understand that the decision to enter the pharmaceutical or food supplement distribution segment is not just a question of commercial potential, but also of choosing the level of regulatory burden, investment in infrastructure, IT, and compliance, and the willingness to bear the associated risks. 

In practice, moreover, both worlds often intertwine, for example, when one entity distributes both registered medicines and food supplements, or when it uses the same logistics and sales channels for both types of products, which brings additional layers of complexity. The legal reality is usually more complex than it appears at first glance – a seemingly simple step, such as choosing a product label or setting up a contract with a logistics partner, can have overlaps into liability, criminal, tax, and competition law and affect the entire business model.

If you do not want to risk errors, damages, delays, or fines, it is safer to address pharmaceutical and food supplement distribution issues with experts who understand pharmaceutical, food, and commercial law and can link the legal framework with real market practice. 

Lawyers from the Prague-based ARROWS law firm have practical experience with this issue, can prepare and review licensing documentation, set up contractual relationships with manufacturers, pharmacies, and 3PL partners, help with the classification and marketing of food supplements, represent you during inspections by SÚKL and other authorities, and provide expert opinions even in cross-border transactions thanks to a network of international legal advisors. 

If you are considering entering pharmaceutical distribution in the Czech Republic or want to review your existing model, you can safely contact the Prague-based ARROWS law firm via email: consultation@arws.cz.