Here’s a story that illustrates why this is important: Last year, China has fined the British pharmaceuticals giant GlaxoSmithKline (GSK) $488.8 million (3 billion Yuan) for a “massive bribery network” to get doctors and hospitals to use its products. Five former employees were sentenced to two to four years in jail, but ordered deported instead of imprisoned, according to state news agency Xinhua. The fine was the biggest ever imposed by a Chinese court.
Mark Reilly, former head of GSK Chinese operations, was accused of operating a “massive bribery network.” He authorized his salespeople to pay doctors, hospital officials and health institutions to use GSK’s products since 2009.
Taking bribery from drug companies and over prescribing medicine to patients is a common hidden rule among doctors in China. It is not uncommon for patients give doctors red envelopes with cash as a blunt plea for them to do a good job on surgeries.But in case you think this doesn’t happen in the U.S., think again. Drug and medical device manufacturers routinely pay doctors and hospitals in the form of meals, travel reimbursements, gifts, entertainment, compensation for speaking engagements, and more. The details of these financial relationships, which often suggest conflicts of interest, have long been clouded in mystery, but that is beginning to change, according to this report.
At the end of September 2014, the Centers for Medicare and Medicaid Services (CMS) launched the Open Payments website, a database designed to publicly display the payments and other transfers of value pharmaceutical companies and medical device manufacturers have made to physicians and teaching hospitals. According to the Pew Charitable Trusts, more than $27 billion was spent on marketing to physicians by the pharmaceutical industry in the year 2012.