China’s pharma blacklist could be weakened by inconsistent enforcement

Though Chinese regulators are pushing ahead with a blacklisting system to combat bribery in pharmaceutical procurement, enforcement problems have undermined similar initiatives in the past, according to Policy and Regulatory Report (PaRR).

The National Health and Family Planning Commission of China (NHFPC) recently announced plans to bring new guidelines into force by March 1, which would blacklist pharmaceutical companies, agents and distributors found to have bribed staff at medical and health institutions. But simply putting a drug company or distributor on a blacklist is not a magic bullet to solve corruption, it claims.

An official from the Shanghai Food and Drug Administration (SFDA) told PaRR that in the past, similar blacklists were usually enforced differently at a local level, adding that some provinces in China did not faithfully comply with such blacklists. An NHFPC official also confirmed to PaRR that in the past, enforcement has varied across China. “It is true [that] for the same regulation different provinces follow it differently in practice. Some follow it strictly, but some of [the] local provinces have their own considerations,” the NHFPC official said.

Multinationals

When it comes to blacklisting a large multinational drug maker – UK pharma major GlaxoSmithKline (LSE: GSK) is currently facing an extensive bribery probe – there is no guarantee that all hospitals in China would hold fast to a blanket ban. “One or two regions” might adhere to a blacklist but some hospitals could still buy a drug regardless of a government directive, especially if access to an important drug still under patent without an obvious generic replacement was cut off, Andrew Henderson, a vice president with the compliance advisory firm the Red Flag Group, told PaRR.

However, pharma companies should not overestimate the importance of one particular drug, the SFDA official said. “When we say some medicine is irreplaceable we are actually talking about the ‘best treatment effect’ it will bring about. If a certain company is put in the blacklist, the message is clear that their medicine is not deemed as irreplaceable,” the official said.