GSK scandal should prompt China to reflect on wider pharma corruption

By William Hao Wei Yang

- Last updated on GMT

Related tags: Medicine

GSK scandal should prompt China to reflect on wider pharma corruption
As a new head of operations works out how best to guide GlaxoSmithKline’s China operation through a bribery scandal that has hit the world's headlines, industry watchers have have said the company is just the tip of the iceberg in a pharmaceutical industry plagued with inflated prices. 

Excessively high-prices have been the nature of Chinese pharmaceutical industry for years​,” said Feng-Lu Yang, director of the graduate school of industrial economy at Shandong University. “The only and best way to solve this problem is to strengthen professional ethics and launch the systematic reformation within the pharmaceutical industry​.” 

Consultants and agents

According to Yang, bribing doctors and health officials has become the norm in China’s pharmaceutical industry, with travel agents - stemming from the prevalence of pharma companies sponsoring doctors to attend international “events” - and consulting firms both being potential targets for investigation. 

Any consulting firms that provide market and medical research for pharmaceutical companies should be part of the investigation​,” said Dong-Sheng Chen, manager of a major consulting business in Shanghai. “Authorities should put any company that has a financial relationship with foreign pharmaceutical companies into consideration. There might be more players involved in the cycle​.” 

But some are hopeful that the scandal will give China an opportunity to reform its healthcare structure, including the pricing of some expensive medicines. According to Chen, competitiveness between Chinese and foreign pharmaceutical companies is still not on par, and although Chinese companies produce more medicines than their foreign counterparts, most of the more expensive medicines are still controlled and produced by pharmaceutical giants like GSK. 

Pharma bribery

Chinese companies use bribery to increase their sales numbers, while foreign companies use bribery to increase their market share​,” said Chen. “The main difference is because foreign companies produce original medicines while Chinese companies produce mock version of those medicines​.” 

To effectively solve the problem, both Yang and Chen agree that China needs to form a network that will specifically deal with pharmaceutical bribery. In other words, government officials need to reclaim control over market prices. 

The general public needs to be well-informed about current market price and choices of medicines​,” said Yang. “Government has the responsibility to create a transparent and uncorrupted environment for patients to enjoy a fair healthcare system​.”  

While GSK guarantees full cooperation with Chinese authorities’ investigation, the wider scandal should give the rest of China the chance to reflect on its own healthcare system. 

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