At a national conference in April 2006, the SFDA announced the launch of a new anti-corruption campaign targeted at drug and device manufacturers and distributors in order to crack down on commercial bribery. The main objective of the campaign is to provide education on the importance of complying with the law and honest business activities. In addition, the SFDA will begin blacklisting any drug or medical device companies that engage in bribery in their business activities. Blacklisted companies that do not take immediate steps to rectify the situation will be penalized, and could ultimately lose their production license. The SFDA has also set up a hot line for whistleblowers to report any complaints or suspicious activity.
Corruption in the medical sector in China is rampant, as evidenced by the arrests of several SFDA officials on charges of bribery earlier this year. SFDA officials responsible for approving new drugs, including the director of the department of Drug Registration, have been accused of accepting bribes from drug companies wanting to push through approval of their drugs. Drug companies that sell drugs whose prices have been cut by the National Development and Reform Commission’s have also been known to register the same drug under a different name. In doing so, they are able to get around the price cuts, marketing the so-called “new” drug at a higher price. Corruption throughout the drug industry and the government resulted in the approval of some thousands of new drugs in 2004, compared to about 150 new drugs in the U.S. Drug companies also bribe doctors, hospital administrators, and health officials to ensure that their drugs are used or prescribed. Hospitals have the incentive to cooperate because they generate most of their income from drug sales.
The Chinese Minister of Health will lead the team responsible for overseeing the crackdown on commercial bribery in the medical sector. In addition to this new campaign, the SFDA has gotten tough on corruption in the past year, withdrawing over 60 licenses and destroying over 450 illegal drug factories.