British
multinational pharmaceutical firm GlaxoSmithKline's China division has been
under investigation by police as staff members are suspected of bribing and rewarding
healthcare workers or hospitals by cash payments or free trips to encourage
doctors to prescribe the firm's medicines, according to the China Business
Journal.
GSK China
has been under the spotlight recently since it sacked Zang Jingwu, the firm's vice
president and the president of its R&D center in China, for allegedly
publishing false data in his article published in medical journal Nature
Medicine in 2010. Four of the 16 people who are also staff members and co-wrote
the article have since resigned since. The future of the Chinese division's
R&D center has been unknown since Zang's departure in mid-June.
Police and
GSK did not elaborate on the purpose of their investigation, but
"commercial bribery" is widely considered the real reason. Doctors in
China reportedly between 2004 and 2010 often decided what medicines they would
prescribe according to the rewards they got from pharmaceutical companies
instead of their patients' needs.
Police in
Changsha, Shanghai, Henan and Zhengzhou are now investigating the Chinese
division which allegedly bribed or provided rewards to officials, medical
associations, hospitals and doctors in order to increase the distribution
channels for its drugs and raise their prices.
A former
senior manager of the division reportedly tipped off the police, leading to the
probe. The manager left the firm at the end of last year and was reportedly not
happy with the firm's compensation package. He submitted evidences of the
backhanders to GSK headquarters and the police.
Such practices
are illegal but nonetheless common in China's healthcare industry.
Pharmaceutical companies domestic and foreign alike must give doctors certain
kickbacks in order to do business in the country, said a person familiar with
the sector. It has been very difficult for firms to eliminate the practice
since their staff are under pressure to increase sales.
Some
salespersons working for pharmaceuticals offer doctors incentives in the form
of junkets. Since doctors in China are also required to publish articles in
international journals regularly in order to pass performance evaluations, some
sales personnel have also been known to pull strings to help doctors publishing
articles, thus different roles in the industry can scratch each other's back
very nicely.
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