China to Punish Hospital Staff for Kickbacks as Crackdown Widens

China to Punish Hospital Staff for Kickbacks as Crackdown Widens

China will punish 39 hospital employees for taking illegal kickbacks from drugmakers, reflecting widening efforts to root out medical corruption that includes an investigation of GlaxoSmithKline Plc. (GSK)

The hospital staff received inducements totaling 2.82 million yuan ($460,000) from two pharmaceutical companies between January 2010 and December 2012, China’s official Xinhua news agency reported yesterday, citing the National Health and Family Planning Commission.China’s efforts to clean up its $350 billion health-care industry have gained prominence since police said last month that they were investigating Glaxo, the U.K.’s biggest drugmaker, for suspected economic crimes. The China Food and Drug Administration said last week it will “severely crack down” on fake medications, forged documents and bribery.

The judicial branch is handling the cases of vice chairman of the hospital’s trade union, along with two people in charge of the two pharmaceutical companies involved, according to Xinhua. Nine doctors who directly received kickbacks were dismissed, suspended or had their licenses revoked, Xinhua said.

Glaxo faces allegations of economic crimes involving 3 billion yuan of spurious travel and meeting expenses and trade in sexual favors, the ministry said last week.

AstraZeneca Plc (AZN), the U.K.’s biggest drugmaker after Glaxo, said July 22 that an employee was the focus of a “local police matter” in Shanghai. There’s “no reason” to believe the individual case is related to any other investigations, the London-based drugmaker said.

To contact the reporter on this story: Natasha Khan in Hong Kong at

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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