Scandal hits China drug sales
Crackdown badly affects foreign and local pharmaceutical suppliers as hospital doctors refuse to meet company reps
A crackdown on corruption in the mainland's pharmaceutical sector has hurt the sales of international and local firms, with many doctors at hospitals refusing to see drug company representatives for fear of being caught up in the widening scandal.
Britain's GlaxoSmithKline, which is at the centre of the furore, has suffered the most. Industry insiders expect its mainland drug sales growth to slow sharply or even reverse in the third quarter of the year after a 14 per cent year-on-year rise in the second quarter.
But GSK - accused of using travel agencies as intermediaries to make illegal payments to doctors - is not alone, and a number of companies say their mainland sales may take a substantial hit in the second half of the year.
With its health-care spending forecast to nearly triple to US$1 trillion by 2020 from US$357 billion in 2011, according to consulting firm McKinsey, the mainland is a magnet for makers of medicines and medical equipment.
However, a string of investigations and visits by the authorities to the mainland offices of global firms has sent a chill through the industry, prompting businesses to step up internal compliance and rein in sales teams.
Corruption in the mainland's health-care industry is fuelled in part by low salaries for doctors at the country's 13,500 public hospitals, the main buyers of drugs.