The Shanghai market regulation bureau has released a document aimed at cracking down on unfair competition activities, with a particular focus on commercial bribery in pharmaceutical purchasing and sales, as well as medical equipment procurement.
Case 1: Shanghai Fumei Dongjia Pharmacy Bribery Incident
The bureau has handled a case involving Shanghai Fumei Dongjia Pharmacy, which primarily engages in drug retailing. Between March and July 2022, the pharmacy allegedly bribed several physicians in a Shanghai hospital based on sales volume for various drugs, including Thioctic Acid and Cefixime. This action violated Article 7, Item 3 of the Anti-unfair Competition Law, and the case has been transferred to the public security department for further processing, highlighting the severity of penalties for direct bribery in the pharmaceutical sector.
Case 2: Shanghai Yongsui Medical Equipment Co., Ltd Bribery Incident
In another case, Shanghai Yongsui Medical Equipment Co., Ltd, which sells orthopedic devices, paid over RMB 50,000 in “disinfection fees” to a hospital from January 2020 to December 2021, which were recorded as management fees. This violated Article 7, Item 2 of the Anti-unfair Competition Law. The Fengxian District Market Supervision Bureau ordered corrections, confiscation of illegal income, and imposed a fine in line with Article 19 of the same law.
Focus on Out-of-Hospital Prescriptions and Compliance
The regulatory authorities are imposing heavier penalties on pharmacies that engage in direct bribery and are transferring such cases to public security for handling. Industry insiders speculate that out-of-hospital prescriptions may become a key focus of this inspection. As prescription outflow and outpatient coordination policies continue to be implemented, the competition in the out-of-hospital market is intensifying, and some pharmaceutical companies are using bribery as a market development “shortcut.”
National and Local Compliance Measures
In November 2021, the National Health Commission issued the Nine Guidelines for Clean Employment of Medical Institution Staff, strictly prohibiting the arrangement of patient purchases at designated locations outside of the hospital, except for medical consortiums and “dual channel” management under medical insurance. Local healthcare security administration bureaus and healthcare commissions in various provinces have also issued documents and notices prohibiting medical personnel from guiding patients to purchase drugs and consumables at designated pharmacies or companies.
The Growing Out-of-Hospital Market and Compliance Challenges
Statistics indicate that in 2020, prescription drug sales through retail channels accounted for approximately 47.9% of China’s out-of-hospital markets, a proportion that has been on the rise. As the out-of-hospital market grows, so does the scrutiny of medical insurance compliance. The pharmaceutical industry must navigate the out-of-hospital market while adhering to strict compliance standards.-Fineline Info & Tech
