News / Asia

China Intensifies Pharmaceutical Bribery Investigation

A woman enters an office of GlaxoSimthKline in Beijing, China, July 11, 2013.
A woman enters an office of GlaxoSimthKline in Beijing, China, July 11, 2013.
Reuters
China is intensifying its investigation into rampant bribery in the pharmaceutical and medical services sector with a fresh three-month probe slated to begin on Thursday, the official Xinhua news agency reported.
 
The investigation by the State Administration for Industry and Commerce (SAIC), a regulator in charge of market supervision, is aimed at stamping out bribery, fraud and other anti-competitive practices in various sectors, Xinhua said.
 
It comes as other Chinese regulators such as the National Development and Reform Commission (NDRC) and the police conduct multiple investigations into how foreign and domestic companies do business in the world's second-biggest economy.
 
Much of the focus has been on the pricing of items from medicine to milk powder and whether companies are violating a 2008 anti-monopoly law.
 
“It seems that the NDRC and SAIC have learned from their recent experience that they have the power to force companies to change their practices and bring prices down,” said Sebastien Evrard, Beijing-based partner at law firm Jones Day, which specializes in anti-trust law.
 
“They seem to be willing to exercise their powers in even more sectors that directly concern consumers.”
 
The SAIC would hand down severe punishment for bribery found in the bidding process for drugs and medical services as that hurt the interests of the Chinese people, Xinhua said.

Low salaries feed problem
 
Corruption in China's pharmaceutical industry is fueled in part by the low base salaries for doctors at the country's 13,500 public hospitals.
 
“Commercial bribery not only leads to artificially high prices, it undermines market order in terms of fair competition and corrupts social morals and professionalism,” Xinhua said.
 
The NDRC, which oversees pricing, is already investigating 60 foreign and domestic pharmaceutical firms over their pricing practices. This investigation has yet to conclude.
 
Separately, the SAIC said it wanted to prevent China's industry associations from being the “driving force”, or organizers, of monopolistic behavior, an official at the SAIC, Cao Hongying, was quoted by Xinhua as saying.
 
Among the 12 monopoly cases that China has announced, nine of them were organized by industry associations, Xinhua said.
 
The investigations underline China's toughening stance on corruption and high prices in the pharmaceutical industry, as the government seeks to make healthcare access universal and faces an estimated $1 trillion healthcare bill by 2020.
 
Many Chinese prefer foreign brands over local drugs because of the widespread circulation of fake medicine.
 
Novartis in spotlight
 
The latest foreign drugmaker in the spotlight is Switzerland's Novartis AG, after a Chinese newspaper reported that it bribed doctors to boost sales in June and July of this year.
 
The 21st Century Business Herald quoted an unidentified former employee, who had supervised sales at large Beijing hospitals, as saying her manager told her to give 50,000 yuan ($8,200) in kickbacks to doctors to guarantee 640,000 yuan in cancer drug sales over the period.
 
It said the employee, identified by the pseudonym Li Li, asked the company for 5 million yuan or she would take unspecified action.
 
Novartis said it could confirm that a former employee had filed a complaint with the local Chinese labor authority and  also made a claim to the drugmaker for compensation. It said it had launched an internal investigation through its business practice office.
 
“Novartis takes allegations of misconduct seriously and will take appropriate actions depending on the findings once the investigation is concluded,” the company said in a statement.
 
Police have detained four Chinese executives of GlaxoSmithKline and questioned at least 18 other staff after allegations the British drugmaker funneled up to 3 billion yuan to travel agencies to facilitate bribes to doctors and officials.
 
The British firm has said some of its senior Chinese executives appear to have broken the law.
 
Health Ministry officials are also investigating drugmaker Sanofi SA over bribery allegations, something the French company has said it was taking “very seriously”.
 
Chinese authorities have also visited sites operated by Danish drugmaker Novo Nordisk A/S ; another Danish firm H.Lundbeck A/S ; Britain's AstraZeneca Plc ; Eli Lilly & Co and Belgium's UCB SA.
 
China is increasingly important for big drugmakers, which rely on growth in emerging markets to offset slower sales in Western markets. IMS Health, which tracks pharmaceutical industry trends, expects China to overtake Japan as the world's second-biggest drugs market behind the United States by 2016.
 
The SAIC investigation will also look into misleading or deceptive marketing practices used by car dealers, placement agencies and real estate agents among others, Xinhua said.

You May Like

Will Cuba Follow the Southeast Asia Model?

Decision to restore ties between US and Cuba has some debating whether it will lead to enhancement or regression of democracy for Communist island nation More

Kenyan Designer Finds Her Niche in Fashion Industry

‘Made in China’ fabrics underlie her success More

Report: CIA, Israel's Mossad Killed Senior Hezbollah Commander

The Washington Post story says Imad Mughniyah was killed instantly by a bomb "triggered remotely" from Tel Aviv by Mossad agents More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Jefferson's Library Continues to Impress, 200 Years Lateri
X
Deborah Block
January 31, 2015 12:12 AM
Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Jefferson's Library Continues to Impress, 200 Years Later

Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid