China Squeezes Kickbacks in its Pharma Sector

While bribery has been significantly reduced in China’s medical market over the last five years, it still exists. For example, there have been significant reductions of payments to NMPA officials for drug approvals. However, in other areas of the Chinese medical system, crackdowns have been less prevalent. This has now changed, and in late July, the National Health Commission (NHC) and ten other state agencies gave notice to the China pharmaceutical industry of additional oversight on corruption.

As a result, many domestic and foreign drug companies are now canceling academic promotional meetings with doctors and hospitals. The NHC is also cracking down on drug supply chain issues and increasing penalties for sales reps, doctors, and hospitals using kickbacks as a way to do their pharma business. In addition, while Volume Based Procurement (VBP) has been initiated to trade off low drug prices for large volume sales, some drug participants have “gamed” the system to their advantage with kickbacks. Crackdowns on VBP will also be increased.

Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.

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