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Commercial Bribery in the Pharmaceutical Industry

2018-11-21 11:04 Wednesday

Commercial bribery, unfair practices that undermine competition in the private sector, has had a detrimental effect on certain industries.

commercial bribery

According to China's Ministry of Commerce, annual losses from commercial bribery in the pharmaceutical industry exceed 700 million RMB, accounting for 16% of the industry's tax revenue.

Drugs are special goods that ordinary consumers must buy under the guidance of a doctor. Therefore, doctors have absolute power, and are the primary target of commercial bribes. In addition, soaring profits and competition concentrated pharmaceutical market have incentivized companies to use commercial bribery to increase sales.

The main form of commercial bribery is for pharmaceutical companies or employees to use kickbacks and other means to sell high-priced drugs or even counterfeited or adulterated drugs to hospitals, which leads to high drug prices for patients.

Consequences of Commercial Bribery

­ -Increases health care costs. In pursuit of economic benefits, hospitals overprescribe drugs, and impose unnecessary treatments and tests for patients. This substantially increases the cost of medical insurance, and the financial burden on the general public.

­ -Causes losses in tax revenue.

­ -Imposes additional stress on patients. In addition to suffering from the disease, patients also bear high medical costs.

­ -Undermines fair market competition. Commercial bribery infringes on other operators' right to fair competition and interferes with normal market rules by excluding competitors.

­ -Damages normal resource allocation. The market can allocate social resources efficiently and reasonably by adjusting the price and supply of commodities. Commercial bribery interferes in transactions by improper means, resulting in an  unreasonable allocation of resources.

Only through vigilant government supervision can commercial bribery be combated in the pharmaceutical industry, and drug prices reduced.

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