China's government issued new guidelines to centralize hospital procurements of all medicines by requiring them to obtain them only through provincial governments. The aim of the change was to reduce unnecessary expenses and safeguard against physician kickbacks.
The guideline issued by the China cabinet, its State Council, excluded traditional Chinese medicine from the new requirements. It comes as National Committee of the Chinese People's Political Consultative Conference or CPPCC opened on Tuesday, March 3, for a two-week session that will focus on legislative tools to weed out corrupt officials. More than 5,000 national lawmakers and political advisers will be gathering in Beijing to discuss policies and come up with proposals to steer the world's largest economy forward.
The meeting will set the tone as well for enforcement efforts against companies with the pharmaceutical and medical device industries watching closely in the wake of the GlaxoSmithKline ($GSK) bribery conviction last year for any more crackdowns.
In the past year, several senior CPPCC members were implicated in corruption investigations, including former presidential aide Ling Jihua and former spy boss Ma Jian who were expelled from a high-profile advisory body.
"Over the past year, the party leadership made an all-out effort and adopted a zero tolerance attitude and left no stones untouched in seriously investigating and punishing corrupt officials," said Lv Xinhua, spokesman for the CPPCC. "In fighting corruption, it is important to deal with any and all corruption cases that is brought to our attention. There should be no limit or ceiling, and there is no prince with an iron hat."
On the drive to consolidate drug purchases, the State Council had earlier said the new procedure would help reforms of public hospitals, bring pharmaceutical policies up to date and make medicine supplying more efficient.
Although the drugs are to be supplied via provincial-level platforms, hospitals still would pay drug makers and distributors directly as part of an effort to reduce the supply chain and cut out unnecessary middlemen.
The council guidelines also called for greater effort to ensure access to drugs in the nation's outlying regions, and advised that any violations be "harshly dealt with," according to the state-owned news agency, Xinhua.
- read the State Council's release
- here's Xinhua 's take