Avoid ‘academic promotion commercial bribery’ in medicine marketing

Medicine marketing has long had a high risk of being prone to commercial bribery. As such, it is not surprising this has been a business that China strictly regulates and has cracked down on in recent years. It is important to uncover, as well as prevent, commercial bribery in medicine marketing, be it in daily operations, in mergers and acquisitions or capital operations of pharmaceutical enterprises.

The Supreme People’s Court and the Supreme People’s Procuratorate jointly issued in 2016 further clarifications on the interpretations concerning some issues on the application of the law in handling cases of corruption and bribery. The clarifications cover “property interests” in bribery crimes, including material benefits, such as house decoration and debt relief, which can be converted into money and other benefits like membership services and travel. The newly revised law against unfair competition also enumerates the specific types of commercial bribery, where the “kickback” clause is deleted and the provision, “where the employee of a business operator offers bribes, such act should be found to be an act of the operator”, is added.

The promulgation and implementation of these new regulations pose new challenges to the compliance work of pharmaceutical enterprises in medicine sales, especially their widespread use of “medicine promotion in the name of academics”, including cases of “property interests” being tunnelled to doctors and academic staff and, thus, deemed to be commercial bribery. This is also a common concern of pharmaceutical enterprises.

Based on the understanding and practical experience of relevant applicable laws and regulations, this article discusses and analyses the identification and prevention of legal risks related to “academic promotion commercial bribery” in medicine marketing.

Cindy Hu is a partner at East & Concord Partners