The right prescription

By Xu Peixi
0 Comment(s)Print E-mail, August 4, 2013
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Chinese regulators are taking action against the Chinese operation of the UK pharmaceutical company GlaxoSmithKline (GSK) for alleged systematic bribery. The charge mainly rests upon the company's use of hundreds of Chinese travel agencies to channel huge bribes to doctors, hospitals, state officials and medical associations. It is alleged that this has been going on for as long as six years to the tune of up to 3 billion yuan.

Chinese regulators are taking action against the Chinese operation of the UK pharmaceutical company GlaxoSmithKline (GSK) for alleged systematic bribery. [File photo]

In spite of the long duration and huge amount, the case should have been straightforward. After all, the Chinese state clearly does not discriminate against foreign businesses because they mostly enjoy equal, if not favorable, conditions with Chinese enterprises. Neither does it present a moral dilemma as in the case of Beijing Children's Hospital, where the hospital planned to expand its in-patients department so that it could accommodate and treat more patients but was delayed in its attempt by a few residents in the neighborhood who refused to move. The logic behind the probe of GSK should be very simple: If the success of a Chinese or foreign business derives from innovation and the respect of customers, the business should be encouraged to thrive; when foul play and misconduct is found, it should be punished and future instances should be prevented.

But the probe of GSK has provoked some rather negative domestic and foreign press reaction which has revolved around peculiar or misplaced threads of reasoning. A recent opinion piece in Hong Kong's South China Morning Post newspaper opined that the Chinese Communist Party, though inspired by Marxist ideology, has become "adept at making money and ensuring profits stay at home." Speculating as to the reason for the probe, the headline of the piece posed the question, "Was GlaxoSmithKline doing just too well in China?"

The British newspaper the Guardian framed the case as a targeted action against "multinationals in China." This kind of media coverage neglects the fact that the new administration's investigations cover an array of industries and sectors, regardless of who actually owns the enterprises. It is in fact a national level "physical examination," with inspection teams visiting provinces and state-owned enterprises to probe corruption and investigative groups probing higher education institutions for any evidence of malpractice.

To keep the case in perspective, one has to take into consideration that China's health care system has become a growing source of social instability, which is manifested in the rising number of disputes between doctors and patients. The National Health and Family Planning Commission recorded roughly 44,000 medical dispute cases between 2006 and 2010; and every year, more than 10,000 doctors and nurses are physically assaulted. The root of the problem is multi-faceted: Ineffective communication, lack of treatment transparency and weakness in the mechanism of regulation and supervision are just a few. But the fact that patients are burdened with the heavy costs of medicine and equipment also contributes to this social disease. This has driven many patients' families to the point of desperation and in many cases, having a family member hospitalized means bankruptcy. The role played by pharmaceutical companies is evident. When more than 10 percent of their sales go to bribery, how much are patients overpaying for prescriptions from doctors? These hidden practices hurt even more at a time when China is setting up a national level insurance system to protect both urban and rural citizens. "Cooperation" between doctors and pharmaceutical companies has the potential to strain the financial resources of the nation and the cost would still be paid by the patients.

It is against this backdrop that China's investigation into GSK sends a positive message to society at large. It reveals the new Xi-Li administration is addressing a real source of social instability, and they have heard or been made aware of the complaints of those patients who have been stuck in hospital corridors. It shows that the Chinese state is not plotting with transnational companies to push for even greater industrial growth to showcase the achievement of development. It also strips away big businesses' veneer of benevolence to reveal their true, greedy nature. Separating the operation of GSK from that of the state also sends a positive message to the Chinese people and is, to a large degree, a case of the state redeeming itself, as is the case for any anti-corruption probe. GSK has responded by acknowledging that it "fully supports the efforts of the Chinese authorities in their reforms of the medical sector and stands ready to work with them to make the necessary changes for the benefit of patients in China." This is a reasonable postscript to the current situation.

Thus, both the state and the company are trying to cure themselves. Each plays a dual role as "curer and patient". As for the commercial or market-oriented media which often claims to support freedom and democracy while tending to succumb to narrow interests or insights, their outpourings bring to mind the Chinese fable about Ye Gong. In the fable, Ye Gong claimed that he loved dragons and he decorated his doors, windows and some of his possessions with dragon designs. But when a real dragon, impressed with the designs, visited Ye Gong, he was frightened and ran away. This fable satirizes those who claim to like or support something while failing to support their claims with their actions. The reaction of some Chinese and foreign media to the GSK case illustrates this fable perfectly. When the state takes action to improve a situation for the cause of democracy, some self-proclaimed democracy lovers become as frightened as Ye Gong and betray the very things they claim to love and support.

The author is a columnist with For more information please visit:

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