In Cleanup of Graft, China will Publish Healthcare Corruption Blacklist

Healthcare corruption in China was a big news item in 2013, with investigations conducted into milk powder firms as well as both domestic and international drug companies, such as GlaxoSmithKline (GSK).  Chinese authorities have vowed to increase food product safety checks and clamp down on the production and sale of poor quality pharmaceuticals, the illegal manufacturing and sale of medical instruments and the illegal usage of prohibited drugs in cosmetics.

As part of the crackdown on corruption, China’s National Health and Family Planning Commission announced on December 27, 2013 that a national blacklist will be published online starting in March 2014.  Regional healthcare departments will compose lists of corrupt individuals, agents, and manufacturers.  The lists will be reported to the central healthcare commission, and those included will have the right to question their inclusion.  The published list will also show the offender’s name, business address, legal representative and details on the alleged corruption.

Healthcare institutes that accept public financial subsidies would be prohibited from buying medical devices, consumptions or drugs for two years from blacklisted companies in the region(s) in which the companies were implicated.  Concurrently, if these companies make bids on public tenders, public healthcare institutes must assign a lower grade to the bid.  If a firm is blacklisted twice, it will not be allowed to sell its products for two years to public healthcare institutes anywhere in China that are in provinces with any history of bribery influencing drug sales.  Punishment will also be given to medical practitioners who accept bribes — in extreme cases, they could lose their medical licenses.

According to McKinsey, spending on healthcare in China is forecast to increase from $350 billion in 2011 to $1 trillion by 2020, making the market particularly enticing.  However, the low salaries paid to nurses and doctors at China’s 13,000 public hospitals are one reason corruption in the healthcare sector has been so prevalent.