China's top health authority has vowed to severely punish malpractice in the purchase and sale of medicine, following a rise in the number of cases, which has led to some multinational company executives receiving prison sentences and senior government officials being investigated .
"Anti-corruption authorities related to health and family planning departments must intensify cooperation with law enforcement authorities to handle cases involving official corruption," Li Xi, head of the discipline inspection team at the National Health and Family Planning Commission, said in a statement on the Ministry of Supervision's website on Sunday.
Health officials must take responsibility and be punished for law violations committed by their subordinates, Li said. The announcement follows a series of cases involving corruption in the medical sector, including the downfall of several senior officials in charge of medical pricing and the scandal of GlaxoSmithKline China, the China branch of one of the world's largest drug companies.
In September, a court in China imposed a fine of 3 billion yuan (S$622 million), the biggest ever by a Chinese court, on the China branch of the British drugmaker for paying bribes to non-government personnel. Five senior executives actively organised and implemented sales with bribery, according to a verdict of the Changsha Intermediate People's Court in Hunan province.
They were given suspended prison sentences of between two and four years. "Such policies have been released now and then, but are never satisfactorily carried out," said Yu Mingde, chairman of the Chinese Pharmaceutical Enterprises Association and a former senior official at the State drugs administration, commenting on Sunday's statement.
Yu said corruption in the medical sector has been going on for many years, and it has become even more serious despite measures being issued to counter it. "A major reason for the corruption is that administration power has too much interference in the sector, which creates room for the abuse of power for profit," he said.
On Sept 28, three senior officials of the pricing department of the National Development and Reform Commission, China's top economic planner, including Liu Zhenqiu, head of the department, were detained for investigation. Liu was in charge of pricing for several industries, including drugs, while he served at the commission.
In August, his predecessor, Cao Changqing, had been detained for investigation.
To resolve the problems in the medical sector, authorities must reduce bureaucracy and relinquish some power, and the medical system should be reformed, Yu said. "Most hospitals rely on drug sales as a source of income," he said. "It encourages hospitals to sell expensive drugs." Wang Hongzhi, a medical adviser at Beijing-based advisory firm Allpku, said the price of many drugs in the market is too high, which encourages doctors to profit through illegal means such as brokerage.
"The fact that doctors receive brokerage from drug sales representatives has almost become an open secret in China," he said. A possible solution would be to limit total expenditure on drugs for a certain type of diseases, so hospitals can purchase and use drugs more rationally, he said.