News / Economy

More Foreign Pharmaceutical Firms Could be Probed in China

A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai, July 12, 2013.
A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai, July 12, 2013.
TEXT SIZE - +
Reuters
— China's official news agency hinted that more foreign pharmaceutical firms could soon be implicated in a corruption scandal sweeping the industry, in the wake of bribery accusations against British drugmaker GlaxoSmithKline.

"It will not be surprising if more pharmaceutical companies and hospitals, domestic or international, are to be involved in probes in the days to come,'' the Xinhua news agency said on Wednesday in an English-language commentary.

Xinhua did not name any firms or hospitals, but said the government was trying to tackle "rampant'' malpractice in the pharmaceutical sector, including corruption.
    
Underscoring the rot in China's health sector, state media said more than 1,000 doctors, nurses and administrators at 73 hospitals in Zhangzhou city in the southeastern province of Fujian had been found taking kickbacks.

State broadcaster CCTV said 90 percent of the city's doctors were involved and that authorities had recovered 20.5 million yuan ($3.34 million) in illicit funds after a six month investigation.
   
A lot of the kickbacks revolved around the distribution of medicines, CCTV said. It said 57 people, called "drug reps" in the report, had been detained. CCTV did not name any companies.

Chinese police have accused GlaxoSmithKline of funneling up to 3 billion yuan ($488.81 million) to travel agencies to facilitate bribes to doctors and officials to boost sales and the price of its medicines in China.

GSK has called the accusations "shameful" and on Monday said some of its Chinese executives appeared to have broken the law.

Xinhua said multinational pharmaceutical companies should set a good example for local firms.

"Big international firms should shoulder [their] due responsibilities to bid farewell to malpractice," it said.

Such commentaries, while not official statements, provide a window into the government's thinking. English-language commentaries are also often intended for international consumption.

Government crackdown

Xinhua said the following government agencies were all taking action: the ministries of public security and health, the National Development and Reform Commission, which sets prices, and the State Administration for Industry and Commerce, a regulator.

"It is true that malpractice has [been] rampant in China's pharmaceutical industry and hospitals for years, but now China [is] determined to reform its health system and root out malpractice, including taking kickbacks and price-fixing," the commentary added.

Chinese police have questioned local employees from another British drugmaker, AstraZeneca. The company has said police were treating this as an individual case and not related to other investigations.

Authorities have also visited the offices of Belgian drugmaker UCB. And the authorities have detained a British and a U.S. citizen, although it is not clear if those detentions were directly linked to the pharmaceutical probe sparked by the GSK allegations.

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.

On Tuesday, Xinhua said 39 employees at a hospital in southern Guangdong province would be punished for taking kickbacks totaling 2.82 million yuan from two local drugmakers between January 2010 and December 2012.

China has committed to making health care affordable for its 1.37 billion people. But ordinary Chinese cite the cost of medicine as a major irritant. Many Chinese prefer foreign brands over local drugs because of the widespread circulation of fake medicine.

China's State Council, or cabinet, on Wednesday said in a statement posted on the government's website that it would reform drug pricing and procurement mechanisms, guarantee drug quality and "fairly reduce drug costs... and resolutely investigate illicit kickback behavior."

You May Like

Russia-Ukraine Crisis Could Trigger Cyber War

As tensions between Kyiv and Moscow escalate, so too has frequency of online attacks targeting government, news and financial sites More

Egyptian Court Jails 23 Pro-Morsi Supporters

Meanwhile, Egyptian officials say gunmen have killed two members of the country's security forces More

Pakistani Journalists Protest Shooting of Colleague

Hamid Mir, a host for private television channel Geo, was wounded after being shot three times Saturday, but is expected to survive More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.