An audit has shed light on the use of third-party business promotion companies as a core method for illicit payments within the pharmaceutical sector. From 2021 to May 2023, three provincial pharmaceutical companies paid fees to 1,936 third-party business promotion companies, generating fake service fees and names to withdraw funds exceeding RMB 4 billion. This behavior is linked to increased ex-factory prices. Additionally, from 2020 to May 2023, a hospital in the province designated an affiliated enterprise to supply medical consumables worth over RMB 100 million, with the affiliated enterprise making a profit of nearly RMB 7.5 million, indicating an average markup rate of 6.6% for consumables.<\/p>\n\n\n\n
Focus on Fees and Expenses Paid to Medical Experts<\/strong>
The audit report also highlighted the fees and expenses paid by pharmaceutical and device companies to medical experts, a long-accepted market practice. Domestic distributors were required to allocate 2% of their annual sales budget for expert accommodation, transportation, and other expenses. In 2022, a brand distributor paid nearly RMB 16 million for transportation, accommodation, and catering expenses for medical experts and related personnel through nine travel agencies.<\/p>\n\n\n\n