Image: China Stringer Network/Reuters
As they say, it’s only a tip of the iceberg for China businesses. The problems with GSK in China is they are not the only company that does ‘shady’ business practices in China. It’s done to survive and to prosper but only does one thing, increases prices for the consumer. We all lose out.
China business is like to the Wild West in many ways and anything goes, as long as you don’t get caught! But if you do you’re in big trouble.
My recent experience in researching into the medical & hospital market for a well-known French sterilisation brand outlined just this. It’s also common knowledge in the population that doctor’s take bribes for whatever reason. There is also a certain amount of sophistication in the bribery that highlights that money generally never changes hands or through a third party leaving the doctor’s somewhat ‘clean’ of any involvement. Bribery, over prescription of drugs and unnecessary tests to drive up bills.
I’ve been there and walked out with a plastic bag full of pills, lotions, herbs and other things which I didn’t really need and hardly used. But you something have to sympathise with Chinese doctors which only earn about 3,000 RMB for fresh graduate to 10,000 RMB for a senior doctor. They are grossly underpaid for their expertise and professional standards.
This is more relevant when the Drug Sales Representatives from GSK are earning 2-3 times more than the doctors and Purchasing Managers they call on.
On the other side drug companies just don’t get a foot in the door unless you offer these ‘incentives’ to do business. When companies spend billions on drug clinical trials, approvals in business registrations, setting up offices and staff only to be stopped at the sales end by not providing the right ‘incentives’ for doctor’s to use your drugs. Some drastic things need to happen to move forward and become profitable.
Bribery is the lubricant that helps keep China’s public hospitals running, and the health system would struggle to function without illegal payments to poorly paid doctors and administrators. As the SCMP article I have posted outlines,
‘A former doctor at a major heart hospital in Beijing said eradicating corruption would be nearly impossible.
“It would be easy to find out who was taking money if the government wanted to,” said the cardiologist, who has been working in the United States since 2009.
“But everyone would be found guilty. How could the hospitals survive?”’