Pharmaceutical firms remain under scrutiny after GSK scandal
Staff Reporter 2013-08-14 08:50
The official website of Tianjin Zhongxin Pharmaceuticals. (Internet photo)
New details have emerged regarding the GlaxoSmithKline (GSK) scandal in China, where sales representatives from the company were heavily fined for offering bribes and other incentives to doctors to buy their drugs, reports Guangzhou's Southern Weekly.
According to police authorities, the British drug manufacturer had been transferring considerable funds to hundreds of travel consultants from 2007 and had used them to bribe doctors, hospital authorities and government officials.
The GSK scandal has also led to a wave of investigations into bribery and backhanders in China's pharmaceutical industry, with several domestic companies said to have pushed their products by sponsoring conference lunches, meetings and educational conferences.
Tianjin Zhongxin Pharmaceuticals, a well-known publicly listed company, reported a jump in conference sponsorship expenses after the company stepped up its marketing efforts. Last year, Zhongxin reported 47 billion yuan (US$7.6 billion) in conference sponsorship expenses, a jump of 49% from 2011. It was the largest sum spent on a sponsorship deal among all of the publicly listed pharmaceutical companies in China that year, the paper said.
The Chinese pharmaceutical firm said that it had begun marketing its latest drug from the retail end to the user end, with the help of doctors and physicians. Zhongxin's promotional efforts resulted in its revenue surging from 3.4 billion yuan (US$560 million) in 2011 to 5.1 billion yuan (US$837 million) last year.
However, an insider revealed that Yangtze River Pharmaceutical Group and Jiangsu Jeng Rui Medicine Co have spent a far more staggering amount on conference sponsorships than Zhongxin. Sponsorship expenses accounted for 8% of Zhongxin's overall expenses, while it accounted for 9.7% of Jeng Rui's promotional costs, the source said.
The new details have generated widespread public concern about the potential impact of pharmaceutical companies on physicians' behavior, as studies showed that interactions between physicians and pharmaceutical companies clearly affected physician requests to add certain medications to hospital pharmacies, as well as influencing them when prescribing drugs.
