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At a press conference, officials from China's Ministry of Public Security alleged that the executive, U.K. national Mark Reilly, ordered his sales team and other employees to bribe hospital doctors and health care organizations to boost drug sales in China, that helped Glaxo reap billions of yuan in additional revenue between 2009 and 2012, they said. 

While other governments around the world have increased scrutiny on major pharmaceuticals’ marketing practices, China’s administration has gone further, singling out a foreign national, an action that could potentially prompt drug companies to rethink their strategy in the fast-growing market.

China’s medical industry is a breeding ground for widespread corruption. Reports show that doctors and hospitals accept illicit funds from patients and medical goods suppliers to cover budget gaps and pay for staff salaries. Hospitals also reportedly push certain drug prescriptions rather than others and  assign sales quotas to employees.

In Glaxo’s case, in some instances, bribes have been able to increase drug prices as much as seven times the price that the same drugs cost in the U.S. and other markets.

The accusations are a major setback for the big drug maker in a market long seen as promising by the pharmaceutical industry. China has been an important source of sales growth for the company and other pharmaceutical makers in recent years.

People warn about the high prices and low quality of care in many of China’s underfunded hospitals, because of the bad distribution of public funds, particularly in smaller cities.

The country represents a fast-growing market with an aging population and a government that is scurrying to strengthen a nascent social-safety net. But experts say that the country's underfunded medical system encourages widespread bribery and corruption among hospitals, staff and local governments.

The gLAWcal Team

Thursday, May 15, 2014

(Source: International Business Time)

This news has been realized by gLAWcal—Global Law Initiatives for Sustainable Development in collaboration with the University Institute of European Studies (IUSE) in Turin, Italy and the University of Piemonte Orientale, Novara, Italy which are both beneficiaries of the European Union Research Executive Agency IRSES Project “Liberalism in Between Europe And China” (LIBEAC) coordinated by Aix-Marseille University (CEPERC). This work has been realized in the framework of Workpackages 4, coordinated by University Institute of European Studies (IUSE) in Turin, Italy.