They say that nature abhors a vacuum. Apparently, the pharma business in China does, too. In a detailed look at bribery allegations against GlaxoSmithKline ($GSK), The Wall Street Journal shows how doctors' unfulfilled desires made them perfect targets for pharma payments.
That Chinese doctors are poorly paid is obvious. But the Journal points out that some physicians earn only about as much as the average waiter. So they welcomed the chance to share the profits from drugs they prescribed--sometimes as much as 25%. Also welcome were the 100-yuan payments for prescriptions allegedly handed over by GSK.
The highest-prescribing doctors got "special rewards," according to documents obtained by the WSJ. And then there were other perks, which is where the vacuum comes in again. Travel isn't common in China, the newspaper points out; many people are only now venturing outside their hometowns for the first time. So "important experts" were invited on day trips. Others went on junkets to alluring destinations in China--and even abroad. The Journal has a lot more detail here.
If you've read the news about Big Pharma's marketing settlements with the Justice Department, a lot of this sounds familiar. Junkets and kickbacks were among the many allegations in those cases. And as the WSJ notes, back in the 1970s, junkets for doctors were an acceptable part of pharma marketing. Even now, allowing doctors to profit from their own prescribing habits continues, with oncologists collecting the spread between a drug's wholesale cost and payers' reimbursement rates.
Obviously, U.S. law enforcement has cracked down on the gifts and other inducements. The new Physician Payments Sunshine Act forces all drugmakers to collect and report their financial relationships with doctors. Some teaching hospitals and physician practices have stopped--or severely curtailed--visits from pharma sales reps. And to our knowledge, even at its most blatant, U.S. pharma marketing never approached the depth, scale and prevalence of the alleged corruption in China.
Still, one can see that these marketing tactics aren't original. As the China corruption scandal unfolds, we'll no doubt hear about plenty more of them.
- read the WSJ article (sub. req.)
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