Feature Corruption

End of the gold rush for China’s drugs market?

BMJ 2015; 350 doi: https://doi.org/10.1136/bmj.h2756 (Published 21 May 2015) Cite this as: BMJ 2015;350:h2756
  1. Susie Lunt, freelance journalist and editor, Chichester, UK,
  2. Jane Parry, freelance journalist, Hong Kong
  1. Correspondence to: S Lunt susie_lunt{at}yahoo.com

Since GlaxoSmithKline was fined almost £300m for corruption in 2014, China has become a much harder place for foreign drug companies to do business in. Susie Lunt and Jane Parry report

In February, Huang Fengping, a Shanghai health official, was jailed for 19 years for pocketing over 4.4 million yuan (£466 000; €640 000; $710 000) by embezzling funds he controlled and accepting bribes. One of the latest casualties of China’s anticorruption drive, the former deputy director of the Shanghai Municipal Commission of Health and Family Planning was caught with more than 400 envelopes of cash in his home and gold bars in his car.

His case symbolises both the scale of the endemic corruption in China’s health system and the newfound determination of the Chinese authorities to stop it.

China’s new era of apparent zero tolerance of corruption began in 2013, and the health sector has proved to be particularly riddled. But for many, the wake-up call really came only last September when GlaxoSmithKline (GSK) was fined £297m for corrupt practices in its Chinese subsidiary.

GSK’s local subsidiary was found guilty of channelling millions of dollars in bribes to doctors, hospitals, and health officials through travel agencies. GSK says it had been unaware of the problems and puts them down to individual “bad apples” in its Chinese subsidiary.

But the company has had its fingers severely burnt. The British pharmaceutical giant’s sales of drugs and vaccines in China slumped 61% in the months after the investigation began in July 2013 and were down 20% in 2014. Chinese state news agency Xinhua reported that the case may have done “irreparable damage” to GSK in the Chinese market and should be seen as a …

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