China to launch fresh pharmaceutical bribery probe - Xinhua

Wed Aug 14, 2013 9:44am EDT
 
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By Kazunori Takada

SHANGHAI (Reuters) - China is intensifying its investigation into rampant bribery in the pharmaceutical and medical services sector with a fresh three-month probe slated to begin on Thursday, the official Xinhua news agency reported.

The investigation by the State Administration for Industry and Commerce (SAIC), a regulator in charge of market supervision, is aimed at stamping out bribery, fraud and other anti-competitive practices in various sectors, Xinhua said.

It comes as other Chinese regulators such as the National Development and Reform Commission (NDRC) and the police conduct multiple investigations into how foreign and domestic companies do business in the world's second-biggest economy.

Much of the focus has been on the pricing of items from medicine to milk powder and whether companies are violating a 2008 anti-monopoly law.

"It seems that the NDRC and SAIC have learned from their recent experience that they have the power to force companies to change their practices and bring prices down," said Sebastien Evrard, Beijing-based partner at law firm Jones Day, which specializes in anti-trust law.

"They seem to be willing to exercise their powers in even more sectors that directly concern consumers."

The SAIC would hand down severe punishment for bribery found in the bidding process for drugs and medical services as that hurt the interests of the Chinese people, Xinhua said.

Corruption in China's pharmaceutical industry is fuelled in part by the low base salaries for doctors at the country's 13,500 public hospitals.   Continued...

 
A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai July 12, 2013. REUTERS/Aly Song