China’s pharmaceuticals probe cracks down on largest distributer

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Sinopharm, China’s largest drug distributor, is the latest target in China’s crackdown on corruption within the pharmaceuticals industry.

Shi Jinming, a former vice president who handed in his resignation on the 29th of December for “personal reasons” was detained by Shanghai police on Friday night.

The state-owned pharmaceuticals group confirmed in a statement the case was “for an investigation in relation to an allegation of corruption against him.”

Released on Sunday, the statement also confirmed that in total, two former senior figures were under investigation; the other individual being a previous general manager for a company subsidiary.

In light of the probe, Sinopharm stated it had formed a senior-level committee to review internal controls.

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By making the probe public, the company has become the most prominent domestic target in the corruption scandal.

Context

China’s pharmaceutical industry has been placed under global scrutiny for the promotional methods of both domestic and foreign pharmaceutical companies.

Doctors had been offered holidays, free meals for their clinics, expensive gifts and opportunities to publish blue papers commissioned by the pharmaceutical companies, to promote a company’s products.

Whilst most industry analysts believe that the practices were performed most often and more doggedly by domestic companies, the controversy surrounding the debacle was unearthed in July when UK-based GlaxoSmithKline was accused of paying bribes totaling USD 500 million to promote drug sales.

GSK stated it will be stopping the practice of paying salespeople based on their sales, eliminating individual sales targets and removing prescription-linked bonuses.

It has also stated it will stop paying doctors to talk about its products, and cease payments to doctors for attending conferences.

The company’s resolutions have unearthed fraught feelings within the medical community.

As Toronto physician Dr. Nav Persaud notes, “[it is] somewhat embarrassing for the pharmaceutical industry that a company has made the move to stop paying doctors before the medical profession has decided to stop accepting money from pharmaceutical companies to promote medications.”

The move has been internationally viewed as a response to the scandal in China, with commentators around the world calling it a “wake up call” for the industry.

Yet Andrew Witty, the company’s chief executive, stated that these reforms had been in the pipeline long before the China story broke.

Fake drug crackdown

In a related story, Chinese authorities have arrested over 1,300 individuals and seized over GBP 220 million of drugs in a nationwide fake medicine crackdown.

Police have also closed down 140 illegal drug websites.

These developments are part of a six-month attack on the production and selling of fake medicines within China – a longtime thorn in the country’s side – and spurred by the contaminated supply of blood-thinner heparin in 2008 which killed 149 Americans.

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