Â
>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<
Â
Â
China’s National Audit Office in May. – July sent an audit team to Guangdong province and the team conducted an audit investigation into the production, distribution and use of pharmaceuticals and high-value medical consumables in the province, reported Chinese news outlet Jiemian, citing an investigation report.
The investigation found issues including black box operations, detachment from reality and lack of management in policy execution, market player management and drug administration and required rectification, showed the report.
During the period, three pharmaceutical manufacturers, namely Livzon Pharmaceutical, Apichope and Efong Pharmaceutical, a subsidiary of Hong Kong-listed China Traditional Chinese Medicine Holdings Co. Ltd paid fees to 1,936 third-party business promotion companies for 4.077 billion yuan in the name of service fees, in order to increase the comprehensive cost of drug production and push up factory-gate prices, the report said.
Shares of Chinese healthcare and pharmaceutical companies are recently under pressure as the authorities stepped up anti-corruption efforts in the medical fields.
Since mid-July, Chinese authorities have repeatedly pledged to step up anti-graft efforts in the healthcare sector. As of July 26, at least 155 heads of hospitals have been placed under investigation this year, exceeding the figure for the full year of 2022, according to statistics by Saibailan, an healthcare industry consultancy.
Tebon Securities believes that the anti-corruption campaign in the sector will bring some uncertainties to the sector in the short term, though it’s a positive factor from a long-term perspectively.
Bocom International said that this round of anti-graft campaign is expected to focus on cracking down on Operational noncompliance and will have limited impact on leading drugmakers and medical equipment makers with strict compliance.