Plans for online pharmacies hit a roadblock in China

by MICHAEL WOODHEAD

It was pitched as the great disrupter of the Chinese healthcare system: online sales of prescription drugs would reduce distribution costs, improve efficiency of the supply chain of medicines and be great for consumer choice, convenience and affordability. Unfortunately, despite a lot of official hot air, nothing has actually happened.

In May 2014 the Ministry of Commerce released a draft plan to 'open up' the pharmaceutical market to allow online sales. But since then there has been nothing heard from official sources about when and how online sales of prescription drugs will be permitted. While some of the big players such as Alibaba are positioning themselves to be online pharmaceutical vendors, it is still just talk: selling drug online is still illegal and insiders say the government is now dragging its feet on plan to open up the market. The pressure is coming from vested interests in the pharmaceutical industry and also from the powerful hospital lobby.

According to the Commerce Department, online sales of drugs are growing at a phenomenal rate. They say revenue has increased 50% in the last year and there are now 425 companies competing to sell pharmaceuticals online in a 4 billion yuan market. However, at present only non-prescription drugs can be sold online - that market is worth 200 billion yuan and only 2% of it is online. The much bigger market - the 800 million yuan prescription drug market - is still out of bounds. Analysts predict that up to 30% of drugs sales could move online - so there are huge stakes involved for those who win and lose on online pharmaceuticals.

According to Caixin magazine, plans for online sales of pharmaceutical are being opposed by those who say government-run hospitals will lose one of their main sources of revenue if this goes ahead. The China Pharmaceutical Association warns that prescription drugs must be dispensed under the supervision of a pharmacist to ensure quality of the product and also to ensure that it is going i the right for to the right patient.There is no guarantee that this will happen online, they say. They also point to the fact that online purchases of drugs will not qualify for heath insurance rebates - a crucial factor for most patients, who expect to get some or all of the cost of their medications reimbursed by their health insurance.

Hospital-based pharmacists have also attacked the proposals for having little real-world benefit. They say there is no clear evidence for the benefit of online sales of drugs from a clinical perspective. Are online sales of drugs being promoted to improve patient's health, or just as a trend or a money-making venture, they ask. They have called for a responsible "opening up" policy towards online pharmaceuticals from the government.

In the meantime, it seems China has stalled on the issue of online pharmacies.

High Noon for dodgy drug trials: China cracks down (again) on pharmaceutical data fraud

by MICHAEL WOODHEAD
Eight years ago, the Chinese government took a rather drastic step to clean up fraud and corruption in its drug regulator - it shot the director of the State Food and Drug Administration. However, this has  now been shown to be just another example of the uselessness of capital punishment as a deterrent, because the Chinese government has now announced ANOTHER crackdown on pharmaceutical drug registration fraud.

Although not spelling it out as such, the Chinese ministry of health has basically admitted that there has been ongoing and widespread clinical trial fraud since 2008. Not exactly a ringing endorsement for the succesors to the hapless Zheng Xiaoyu (above).

Despite efforts to correct the situation, the new director of the China FDA, Bi Jingquan (in office since 2015) has announced that the problems of clinical trial fraud have not been fixed. On 22 July he issued proclamation 117, which states that the China FDA is to review the registration applications for more than 1600 drugs, to verify the data as genuine. In a sign of how bad things are, the China FDA has described this as a "last chance amnesty" for all the naughty companies who have submitted false data to come clean. Leniency for those who confess ... and for those who don't - three years exiled in the wilderness. Yes, the China FDA is going to blacklist the drugs and companies that are found to have acted fraudulently - if they don't put their hands up and admit to it. They will be banned from re-submitting any drug registration applications for at least three years.

Not surprisingly, the pharmaceutical industry is not happy with this situation. In fact, they are shitting bricks and calling it "7-22" - the industry's play on 9-11. They know the government means business this time because of what happened to GSK - the Anglo-US company was fined a whopping 3 billion yuan ($489 million) for dodgy goings on within its sales force.

But to be fair on Big Pharma, it's not all their fault. The real villains are the so-called Clinical Research Organisations (CROs), which are agencies that actually do most of the local clinical trial work on behalf of the pharma companies. According to Caixin magazine, industry insiders acknowledge that the CRO sector in China is riven by fraud and corruption. Pharma companies pay the CROs to obtain the clinical trial data for China and submit it to the regulators. However, it's an open secret that the trials allegedly run in China's hospitals have been fixed or faked,  and the regulators bribed or blindsided.

To use the words of a regulatory agency insider, "the chaos has not been effectively curbed" since 2008 and therefore the CROs are being invited to undergo a period of "self examination" and verification of their results. The China FDA is tearing up its 2001 guidelines for drug registration and is starting afresh with more rigorous rules. The CROs have a chance to correct their irregularities or will be banished for three years. It is hope the shake-up will clean out what it currently a rotten and severely compromised sector - but this remains to be seen.

The last word goes to an insider at a reputable company - he says the short term effect may well be a kick up the arse for the CROs and the pharma industry, but old habits die hard. He says the only way to achieve positive long term change is to overhaul the management of CROs and pharma companies - and build expertise based on technical and scientific ability, not an ability to bend the rules

Drug sale reforms; Autistic children abused; Tibetan monks don't get hypertension; Guangzhou's first private clinic; Doctors stabbed in Fuzhou; Tax breaks for private health insurance

by MICHAEL WOODHEAD
The move to stop county-level hospitals from deriving their income from 15% markups on pharmaceuticals will severely dent their revenue stream and threaten services, health economists have warned. China has already trialled  drug commission bans in 300 county hospitals and now plans to extend the system to 1000 hospitals nationally, Caixin reports. However, the plan could leave hospitals short of funds and thus reduce the level of services and hurt the morale of medical workers,  academics and doctors say. The State Council has said local governments should help hospitals to make up for the lost income from drug sales. However,Wang Zhen, a research fellow at the Chinese Academy of Social Sciences, said local governments were already strained financially and they don't have extra money for hospitals.Wang said that without government subsidies and other measures in place, scrapping the markup practice might wind up creating other problems because hospitals will find alternative ways to make money.

Children with autism in China face experience high rates of physical abuse from their parents and family members, a study from Henan shows. In a survey of 180 children with autism, Zhengzhou researchers found that 36% had recently experienced severe physical maltreatment such as slapping on the face, being beaten with objects or kicked. Less severe physical maltreatment such as being slapped, or shaken was experienced by 86% of autistic children.

Tibetan monks have low rates of hypertension, according to a study carried out in Gansu. The survey of 984 monks found that 19% had hypertension, compared to 34% of the local population. However, despite having low rates of high blood pressure, there were also low rates of awareness, treatment and control of hypertension among monks, the researchers found.

Encouraged by new government policy a surgical oncologist has opened Guangzhou's first major private clinic. The clinic set up by Dr Lin Feng will offer speedy diagnosis and high quality treatment by a well known surgeon previously practicing at the renowned 3rd Hospital of Guangzhou. The clinic charges about 2-3000 yuan fees, and offers high quality diagnosis and surgery without the long waits and rushed consultations of public hospitals, its operators say.

Two doctors at a Fuzhou hospital were stabbed in an attack by a 66-year old male patient, local media report. One male and one female doctor were seriously injured by the man armed with a 40cm knife who had been attending the Fuzhou hospital to have his haemorrhoids treated. A hospital spokesman said the man was unhappy with the treatment he received for his haemorrhoids and stabbed a female doctor in the hip. The male doctor who tried to restrain him was also stabbed in the arm.

Tax breaks are to be introduced for Chinese consumers who take out private health insurance, the government has announced. People who spend more than 2,400 yuan on commercial health insurance policies per year will now only pay individual taxes on income above 3,700 yuan per month, instead of 3,500 yuan, CCTV has reported. The move is part of a government campaign to encourage Chinese people to  purchase private health policies in addition to their standard government benefits.

When it comes to health, for China the numbers are staggering

by Michael Woodhead
In western countries hardly a week goes by without some disease condition being put in the spotlight in a press release saying "Condition X affects Y million people a year and costs Z million dollars". 
If industry has a stake in the matter then this is usually followed by a statement saying that the Condition X is underdiagnosed and undertreated and if only we used Drug A or Test B then we would avoid prevent much suffering and save the health budget in the the long run.
This sort of thing is now happening with health conditions in China, except the numbers are bigger by a factor of ten or even a hundred. Take osteoporosis, for example. An analysis published this week shows that there are about 2.3 million osteoporotic fractures a year in China, costing $10 billion in health costs. And if you think that's bad, wait until you see their projection for 2050 - the researchers estimate that with the ageing population there will be 6 million fractures a year costing $25 billion. And as predicted, the report's authors say that "screening and intervention policies must urgently be identified in an attempt to minimize the impact of fractures on the health of the burgeoning population as well as the healthcare budget."

A similar dire warning was made this week for hypertension and diabetes in China. An article in the Journal of the American College of Cardiology said that China was facing a cardiovascular disease epidemic as three out of four Chinese people are in poor cardiovascular shape due unhealthy eating, smoking and obesity. On a similar note, a study from Shenyang showed that 50% of older adults had hypertension and poor cholesterol levels. And a report in The Lancet this week shows that China has 300 million smokers and that tobacco causes 1 million premature deaths a year. The numbers are so big they are incomprehensible. And yet at least the Lancet offers a workable solution: cigarette taxes. It says that if cigarette taxes were raised by 50% this would result in 231 million years of life gained over 50 years and also produce an additional US$703 billion in extra tax revenues from the excise tax. The overall effect would be to relieve financial burden on the poor by avoiding diseases such as lung cancer and the consequent medical bills and time off work. But does Xi Jinping have the gumption to increase cigarette taxes?

For yet another set of mind boggling numbers turn to the example of cervical cancer. With no Pap test screening program, tens of thousands of Chinese women develop this disease and die of it each year, even though it is preventable. Western countries have long had screening programs and are now tackling cervical cancer with the HPV vaccine for young women. Some health economists have crunched the numbers for China and estimated that a national vaccination program of HPV vaccine for 9-15 year old girls, between 2006 and 2012 would have prevented 381,000 cervical cancer cases and 212,000 related deaths. They say that a HPV vaccination program could be implemented in China at a cost of about $50 per girl for the whole set of vaccinations and program costs. In total this would cost China about $160 million, but would ultimately prevent hundreds of thousands of deaths from cervical cancer - and also be cost effective.

A final example: stomach cancer. This causes  hundreds of thousands of deaths in China every year. And yet researchers have found that regular use of low dose aspirin could reduce the risk of stomach cancer (and other common cancers such as colorectal cancer) by as much as 40%. In other words, if Chinese people took a regular dose of aspirin they could avoid many fatal cancers, not to mention the protective cardiovascular benefits against stroke and heart attack. Whether these would be outweihed by increased bleeding risk remains to be seen.

I think what I am trying to say here is that when it comes to ill health in China, the numbers are often too large to be imagined. But that also means that measures that produce only modest reductions in rates of disease can also have major impacts on the absolute numbers of illness.

And while talking of high rates, let's return to my favourite bugbear about healthcare in China - the infusion. I have been guilty in the past of blaming backward thinking among the Chinese masses for insisting on having an infusion for every ailment. I hope I haven't hurt the feelings of the Chinese people and perhaps I owe them an apology. A study from a bog standard Hubei hospital shows that a staggering 96% of antibiotics used in the hospital wee given parenterally (ie by injection or infusion rather than orally). The authors of the report contrast this with the rates of about 30% of IV antibiotic use seen in European hospitals.

However, they blame the profit motive among hospital managers for the widespread use of antibiotic infusions - noting that hospitals depend on drug sales for a major part of their income. Therefore it will be interesting to see what happens when the Chinese government tries to eliminate this source of income for hospital by introducing cost price pharmaceutical billing this year (ie not charging a markup).  How will hospitals  fund their services? The government only covers about 20% of their running costs. There are already predictions that costs will be shifted to medical procedures - and trigger even more overservicing.

At least there is some discussion taking place of these kinds of problems and some in the government are acknowledging that there is still a long way to go in health reform. This week a very frank and bleak account of the ills of rural Chinese health system was published. Doctors and hospital managers said quite bluntly that the rural healthcare system in China is being hollowed out - older doctors are retiring, and nobody is taking their place. Young doctors do not want to work in rural hospitals, partly because the ban on commissions from pharmaceuticals means they can make only a tiny income. And patients do not want to be treated in them. And so the county and township hospitals are becoming ghost hospitals - deserted compared to the overcrowded city hospitals, where rural Chinese flock when they have a serious health problem.

Fact of the week: Chinese primary care (community health centre) doctors earn only 3000-4000 yuan a month. Primary care doctors account for only 4% of doctors in China.

CPPCC - what they're saying about health

It's that time of the year again - the Chinese People’s Political Consultative Conference (CPPCC). The toothless talking shop cum fancy dress parade as deputies from around China meet to chinwag and talk up the government's policies. It's an occasionally interesting forum - some grievances are allowed to be aired, but usually only to justify measures that are already being taken.
There has been quite a bit of talk about healthcare this year. Most of the problems discussed are ones that have been given a regular airing on this blog: doctors' income linked to overservicing, excessive workload of doctors and the issue of publish for promotion. On the last point, Prime minister Li Keqiang attended one meeting that heard about the problem of junior doctors having to publish academic papers in order to qualify for promotion. He was told that more than a quarter of doctors had their articles written for them by ghostwriters and agencies. The PM said this was a bad situation and doctor's should be rated on their practical skills, not writing skills.

Our old friend Professor Zhong Nanshan made an appearance at one People's Conference, at which he re-stated his concerns about doctors' pay being linked to sales of drugs and number of procedures and devices provided. He cited the case of one cardiologist who implanted several expensive cardiac stents for a patients who was not even seriously ill. Zhong Nanshan said the problem of doctors' ethic arose because up to 80% of their income was tied to hospital profits. This meant doctors were given quotas to meet and the 'profit-driven' mentality meant that hospitals were more like department stores than public health facilities, he said. Zhong Nanshan said that to end the problem of overservicing there was a need to de-link doctors' incomes from prescribing and servicing levels. Doctors should be paid a higher basic salary that reflected their worth, he said - and he stressed this did not mean a return to the 'iron rice bowl' mentality.

The problems caused by pharmaceutical commission were highlighted this week by the news that GSK is to sack 110 of its employees in China in the wake of last year's massive bribery scandal that resulted in the company being fined  $450 million. The widespread use of bribes, commissions and backhanders caused a lot of pain for the multinational pharma company when exposed. The staff who have lost their jobs may well be scapegoats. The man at the top, CEO Andrew Whitty, kept his job but had his salary package halved to a measly $6 million. Whitty said  “substantial changes” had been made at GSK China, including training for managers in anti-bribery and corruption practices.

Other 'unhealthy tendencies' raised at the CPPCC include the hospital VIP suites reserved for officials and local bigwigs. Professor Huang Zemin of East China Normal University said hospitals had two different worlds, with the VIP outpatient wards reserved for officials being quiet and luxurious whereas the outpatient room for the general public was crowded and noisy. A fair point, but the VIP suites have already been slated for abolition, so he's hardly breaking new ground there.

And also from the CPPCC, a cry for help from the paediatricians.  One of the country's top paediatricians, Professor Shu Xiaomei, told the CPPCC that there was a crisis in paediatrics as very few doctors go into this branch of medicine in China. The reasons are that paediatricians earn very little compared to other doctors, again because they don't prescribe so many drugs or do many procedures). Another reason for the unpopularity of paediatrics is the high workload and the huge pressure from pushy parents - often leading to violence when things go wrong. Professor Shu said there was also no formal training program for paediatrics, unlike other specialties and therefore the speciality was a 'tree without roots'.

The workforce theme was raised by another delegate at the CPPCC, who said that China simply does not have enough qualified doctors to do everything that the public expected of them. His succinct appraisal was that "without more doctors, all discussion about health reforms is empty talk. "
Other CPPCC delegates said that the push to create a primary care system based around community clinics was commendable but facing the major problem of neither doctors nor patients wanting to go anywhere near primary health clinics. Dr Zhao Ping, of the Chinese Academy of Medical Sciences, said patients did not go to local clinics because they had poor equipment and poorly trained staff and could not refer to the best specialists.
"People don't trust these clinics and hospitals. The thing is, people want to go to better and larger hospitals, and so do healthcare workers. We don't have a mechanism in-place to keep our best healthcare workers at community clinics," he said.

But it's not just the CPPCC, here are some other major medical news stories from China this week:

• Two doctors in their 20s have died suddenly of 'overwork' in the last few weeks, prompting some doctors to say that the pressure of work is too high.

• Baidu's CEO Robin Li says Baidu is looking at online appointment systems.

• China's first new advertising law in 20 years is expected to tighten up regulations around advertising of medical products and healthcare services .

• A Fuzhou doctor became a social media viral sensation when he was photographed working while hooked up to an IV infusion. Weibo users praised him for his dedication for working while sick. 

• International medical experts have expressed concern at China's crackdown on ketamine. While the drug is sometimes abused, it is also a very important and safe anaesthetic, and any restriction would be a major blow for safe surgery in poor countries, they say.

My January news blog ...

Regrettably, I am cutting back on my blogging about China medical news this year. I've been doing this for more than a year now, out of enthusiasm and my own personal interest in the area, but it's becoming too much of a burden on my time. And of course it is all unpaid. Unless there is a sponsor out there who wishes a regular stream of China medical news? After my day job doing much the same thing about Australian medical news I find it hard to sit down at home and do the writing for this blog. So from now on I shall probably only update the site about once a week. That is not enough to cover the many things happening in healthcare in China, but that's your lot. As they say in Yorkshire, you don't get owt for nowt.

This week I have been reading about how patients in Shanghai with chronic diseases will now be able to pick up their repeat prescriptions from community clinics instead of the big hospitals. It's a move intended to relieve the overcrowding at the tertiary hospitals and sounds like an obvious and sensible idea. Whether it will work or not depends on whether China's hospital-obsessed patients can be persuaded to show up at the low-status community clinics.

There are also moves to try curb China's high levels (approaching 50%) of caesarean section intervention in pregnancy. A feature article by Yang Wanli describes how some obstetricians in China are trying to persuade women to opt for natural birth. However, the barriers are a lack of available analgesia for women in labour and the industrial production-line mentality of China's hospitals.

Rural health is a major issue in China this month, with the State Council approving a plan to boost the rural medical workforce. The Council wants to see rural areas of China have qualified doctors replace the current 'barefoot' practitioners. However, well-meaning intentions will not fix the huge rural medical workforce problem in China. The simple problem is that university qualified doctors do not want to work in rural villages. The pay is pathetic, there is no status and the workload is high. As this article shows, the current rural medical workforce is mostly unqualified and often dangerously lacking in skills.

That's not to say that rural health is completely hopeless in China. There have been great achievements in some areas of public health such as immunisation and basic child health. However, as a major article by Chinese paediatricians the Archives of Diseases in Childhood shows, the next step for China is to try reduce the incidence of more complex diseases in children. China has done well in tackling the easily preventable causes of child disease, now it must turn its attention to the difficult stuff - the consequences of preterm birth, and the many congenital and metabolic diseases.

One problem with monitoring China's progress in child health is knowing whether or not the official  figures are true. Take measles vaccination for example. According to official reports, China has 95% measles vaccine coverage of infants. But when researchers analysed the causes of measles outbreaks in Hunan and Jiangsu that affected hundreds of children they found that the actual rates of measles immunisation more like 80%.

And finally, for those who put their faith in western healthcare companies helping improve the health of China, take a cautionary look at the sorry tale of GSK. A well regarded company in the west, GSK was the subject of high profile bribery allegations and a court case that jailed one of its British executives for  his role in the bribes to doctors and hospitals. Now the company is reported to be cutting the jobs of 1000 employees in China following the downturn in its business there (including a 60% drop in revenue).

Statin therapy has disappointing results in Chinese patients

by Michael Woodhead
Only about one in four Chinese patients taking a statin have their cholesterol levels under control, according to a new study.

A review of the effects of statin therapy in 8965 outpatients with cardiovascular disease from 200 clinical departments of 122 hospitals across China found that about 75% of patients still had poorly controlled lipid levels.

The findings, published in the International Journal of Cardiology showed that despite taking long term statin therapy in medium to high doses, about 75% of patients had an above-target LDL-cholesterol level. In a similar manner elevated levels of total cholesterol and triglycerides as well as low HDL-cholesterol persisted in 34–43% of patients despite statin therapy, according to Professor Wei Yidong and colleagues at the Department of Cardiology, Shanghai Tenth People’s Hospital and Tongji University School of Medicine.

Only about 10% of patients overall had optimal levels of all lipid measures (LDL, HDL and triglycerides) despite taking statins. Patients with diabetes had slightly better control of lipid levels (43%) compared to those without diabetes (39%).

The study authors said it was not clear why patients taking statins did not have good control of their lipid levels. Oddly, there appeared to be no relationship between the potency of the statin doses and the degree of lipid level control.

About 77% of patients taking low doses of statins had LDL-C not at goal, compared to 72% of patients taking medium potency regimens and 74% of patients taking high potency courses of statins.
Chinese patients may need more intensive lipid-lowering therapy with additional agents other than statins, to improve their lipid levels. Patients may also need more attention on lifestyle factors such as diet and exercise before starting statin therapy, they added.

However, they could not rule out poor adherence to treatment a a possible cause of the poor lipid control.

Cancer treatment unaffordable | Drug pricing corruption | Premier tackles HIV stigma | Rare diseases not reimbursed | US medical exams popular in China

Public punchbag to pay son's cancer fees
In Beijing a man who cannot afford the Y700,000 ($114,000) medical bills for his son with leukaemia has offered himself as a public punchbag to raise money. The man called Xia Jun stands outside Guomao station and asks for 10 Yuan to be thumped. He says he has collected 10,000 yuan in one day without anyone taking up the opportunity to hit him.

Corruption on drug price setting cited as reason for abolition
The recent move to abolish price caps for prescription medicines was triggered by corruption in the agency charged with setting drug prices. Critics said officials in the National Development and Reform Commission (NDRC) were under investigation by the anti-corruption and bribery bureau under the Supreme People's Procurate for taking bribes. Pharma company executives said the current pricing system forced them to pay bribes to regulators to set higher procurement prices.

Premier lends support to ending HIV stigma
Premier Li Keqiang has shown public support for people with HIV and aimed to dispel prejudice and ignorance about the infection by visiting  a HIV clinic at the inspected Beijing You'an Hospital.
 For World AIDS Day, the Premier met HIV patients and healthcare workers and said the old attitudes of fear surrounding the topic of HIV must be abandoned and HIV patients need more care.

Rare diseases slip through the health insurance cracks
China's health system is not working for children with rare diseases, as their families face high treatment costs and no access to medical fee reimbursement, according to an article in the SCMP. One mother of a 3-year old boy with Langerhans cell histiocytosis (LCH) said his bills for diagnosis and treatment had reached nearly 200,000 yuan ($33,000), of which just 4,800 yuan ($780) had been reimbursed by the rural medical insurance scheme.

US medical exams popular in China
Thousands of China's medical students and young doctors are studying for the US Medical Licensing Examination (USMLE) that will allow them to practice medicine in the US. However, despite studying for up to 1500 hours for the exam, many of them say they are taking it to improve their medical skill rather than just to get a better paying job. Many Chinese students said the US medical exams taught them a more patient-centred approach and put more emphasis on communication and empathy rather than just rote-learning of medical facts. The test is also taken by many of the 60,000 foreign students studying medicine in China.

Doctors refuse red envelope pledge | Online pharmacies to be allowed | Chinese diabetes patients don't adjust diet

Famous doctor won't sign bribe pledge
One of China's leading doctors has refused to sign the government's anti-bribery pledge against accepting red envelopes, saying it is an ineffective and damaging document. SARS hero Professor Zhong Nanshan said the no red envelopes pledge was not a legally-binding document and its ethical pledges were already contained in the Hippocratic Oath that doctors already swore when they graduated from medical school. He said that if doctors signed the pledge it would be a tacit admission of guilt that all doctors were accepting bribes for preferential treatment, which was not the case. He added that signing the pledge also sent the wrong signal that doctors were to blame for the high costs of medical bills, which he said were actually driven by systemic problems such as the linking of hospital doctors incomes to overservicing and the lack of government funding for government hospitals.

Online pharmacies permitted from 2015
Online sales of prescription medicines in China may begin within months, according to the China Food and Drug Administration. The regulatory agency is expected to announce new policies that will allow  online prescription medicine sales as early as January 2015. Pharmaceutical retailers have said the opening up of online medicine sales will open up a potential 10 billion yuan market for drugs. However, the expected increase in  online pharmacies will have a major impact on bricks and mortar pharmacies, they have warned.

Diabetes patients don't adjust diet
Chinese people with diabetes have little idea how to manage their diet so as to better control their condition, a new study shows. A survey of 100 people with type 1 diabetes by researchers at Peking University People's Hospital found that less than half had ever seen a dietician and few monitored or adjusted their diet to help control their blood glucose levels. The study found that while 64% were aware of carbohydrate counting', only 12% ever used the technique

How GSK bribed doctors in China: the gory details

GSK's Mark Reilly, given a suspended prison sentence by Chinese court for bribery.

by Michael Woodhead
The main points of GSK's record 3 billion yuan ($500 million) fine for bribery in China have been reported elsewhere - I won't go over the same ground.

Suffice to say that several senior executives (including one from the UK) have been implicated in the giving of massive levels of bribes/kickbacks to institutions and hospitals in China to promote the  use of GSK's drugs. The company was also found guilty of transfer pricing - dodgy accounting to transfer profits out of China via pricing mechanisms that favoured the revenues of the parent company over the China subsidiary.

Most of the western reports have focused on the implications for GSK and for the prospects of western businesses in China. Surprisingly few have questioned the ethics of what GSK was doing - except to suggest that "Chinese companies were all doing it, it's the way of doing business in China."
I have been reading some of the Chinese language media reports, and they give a lot more detail of the practices GSK was found guilty of. Very few western media reports have focused on the actual bribery methods used by GSK or the specifics of the transfer pricing arrangements (which I presume are not confined to China).

Here are a few examples reported in the Chinese media:

1. According to Chinese prosecutors the bribery was systematic and on a huge scale. Drug reps bribed doctors. Area managers bribed hospitals and 'VIP clients'. Country managers bribed officials in charge of distribution and purchasing. Bribery was done via travel agencies, gifts, sponsorship and through entertainment budgets and PR agencies. There were separate promotional teams for different product groups - the cold chain (vaccine) group is said to have spent 130 million yuan bribing officials in the regional Communicable Diseases Centres with everything from cameras and electronic equipment to cars.

2. How were individual doctors bribed? One liver specialist physician in Hunan called Dr Lee told the court how it worked. For every lamivudine prescription he wrote he was paid 20 yuan by GSK rep. For every new patient he got a bonus of 100 yuan. Dr Lee said every month he wrote about 150-200 prescriptions for lamivudine and started 5-8 new patients on the drug. Do the maths - that 12,000 yuan ($2000) a month, or 144,000 yuan ($23,400) a year.  Dr Lee said the GSK rep arranged to pay him his commission every month at a special meeting when he would be paid for 'lecture fees' and travel expenses for the company. He received these fees 12 time a year but only did 3-4 lectures for GSK each year.

3. It wasn't just individual doctors who were bribed - the court heard how professional 'medical associations' also had huge sums of money transferred to their accounts from GSK to promote the endorsement and use of their products. Medical groups also received millions of yuan in material bribes such as non-medical items like fridges, cars and TVs. Hospital managers were also bribed millions to influence their purchasing policies - sales reps were given a 'Great Wall Plan' and a 'Dragon Plan' of incentives to persuade hospitals to abolish their 'Chinese-made generic drugs only' policies.

The end result was that Chinese consumers paid more for their medicines. Drugs such as Contac, Fenbid and lamivudine were overpriced up to seven-fold compared to other countries. The unit cost of lamivudine was said to be 142 yuan in China compared to 18 yuan in South Korea and 30 yuan in the EU, Japan and Hong Kong. Drug prices were padded to pay for kickbacks. About a third of the cost of GSK pharmaceuticals was said to have been to cover 'commissions', according to a financial controller. This meant Chinese consumers paid 30% extra for drugs  just to cover the cost of bribes.

GSK was driven by high pressure sales tactics for pharmaceuticals: GSK's revenue in China rose from 3.9 billion to 7 billion yuan between 2009 and 2012. The sales workforce increased from 1000 to 5500 people over that period, and each rep was given a budget of 3000-5000 yuan per month to influence prescribing - presumably though officials, doctors and health institutions. Sales reps were promised unlimited bonuses and membership of an 'Elite Club' with foreign travel if they met their targets

Cooking the books: from 2009-2013 GSK had almost 22 billion in revenue from drug sales in China and yet recorded a profits of only 100 million yuan. Investigators found this was due to a 'Five Step' transfer pricing system, by which the costs of products such as the antibiotic Zinacef were inflated at various stages of production in Italy and Cyprus until eventually 'sold' to the China subsidiary. This was a way of repatriating profits back to the US, but again meant that Chinese patients paid far more than they needed to for drugs.

The overall picture is not pretty - call it what you want - commissions, kickbacks, bribes, - GSK was guilty of them but they were by no means the only pharma company in China  doing it. Commissions and kickbacks are obviously widespread in the Chinese health system, and others have been caught out - such as in the Zhangzhou, Fujian case last year where 73 hospitals were found to be guilty of accepting bribes.

In Chinese media reports on the GSK case, most commentators have concluded that the massive fine and the jail sentences will be a lesson to the pharma industry - and the stamping out of bribes will result in lower medicine prices for Chinese consumers.

However, one leading financial commentator has said the GSK case is a prime example of China's tactic of "killing the rooster to scare the monkey"  - but it would not work. Cai Shen Kun says corrupt practices are so entrenched in China's pharmaceutical industry and are so much a part of the healthcare system that even a major case like the GSK one will not put a stop to them. He says kickbacks have become an unwritten rule in the industry that all insiders believe that nobody can ignore if they want to make sales - even a major international company like GSK.

Cai Shen Kun says the long term solution is to reform the health and pharmaceutical system to make it transparent and remove the incentives for commissions. He also says nothing will change until those who accept the bribes are brought to justice - and that means prosecuting the  government officials and senior doctors who accept the 'crazy money'.

Doctors lose, retail pharmacies win as government cuts the hospital monopoly on dispensing

by Michael Woodhead
The Chinese government appears to have side-stepped the influential doctors' lobby and the tame health ministry by using the Ministry of Commerce to tackle the perennial problem of drug sales commissions and the inflated cost of medicines.

Doctors in China rely for much of their income on commissions and bonuses from sales of pharmaceuticals, and previous efforts to curtail the profits have been stymied by medical lobby groups. The Ministry of Health, previously led by a medic Dr Chen Zhu (who now heads the Chinese Medical Association), has managed to block or delay previous efforts to tackle the drug commissions problem.

Now the government has turned to the Ministry of Commerce to introduce new rules that separate medical services and drug sales in 34 pilot cities across the country, in an attempt to lower the high cost of medicines. The National Health and Family Planning Commission (which absorbed the Ministry of Health last year) has been sidelined by the move, a sign that its own efforts at reform have failed.

Under the new Ministry of Commerce plan, major city pharmacies will replace hospital pharmacies as the source of prescription drug dispensing, putting an end to the lucrative 'gold mine' of revenue for hospitals. In theory, this will mean that hospitals should no longer pressure their doctors to prescribe more and reach quotas to boost revenue via the hospital pharmacies. And by breaking the hospital pharmacy monopoly, the new plan will lower drug prices by encouraging competition between pharmacies.

According to Caixin, previous efforts to break the drug sales-hospital income link have failed because of entrenched opposition from the former Ministry of Health. The ministry pushed a plan under which local governments purchased pharmaceuticals on behalf of local hospitals, but this scheme was ineffective in breaking the stranglehold of hospitals on drug demand and also proved to be yet another channel for corruption.

 The new scheme will also permit more pharmacies to become eligible for reimbursement under the various medical insurance system. These moves will further increase diversity and competition and give pharmacies a boost in business, commentators say. However there has been no analysis of how public hospitals will make up for the huge gap in revenue when their lucrative pharmaceutical monopoly is snatched from them.

Medical accidents kill more people than traffic accidents

by Michael Woodhead
In China there are about 8 million unnatural deaths every years and of these about 400,000 are said to be due to medical accidents - often due to unsafe use of medicines. To try and remedy this poor situation, September has been nominated as national medication safety month by the China State Food and Drug Administration.

According to pharmacist Zhang Jichun of the Chinese Pharmaceutical Association, this high rate of accidents and adverse reactions with medications is due to widespread ignorance in the population about appropriate use of medical drugs. A recent survey of more than one million Chinese found that only about one in ten could answer correctly questions about basic drug safe use.

The higher error rate with drug misuse included allergic reactions to antibiotics in babies and infants, misuse of drugs by pregnant women causing birth defects and adverse birth outcomes, accidental drug overdoses, misuse of sleeping tablets causing accidents, using drugs past their shelf life, taking multiple drugs and causing interactions, abuse of weight loss drugs causing cardiac problems and deaths and failing to use cardiac drugs in sufficient doses leading to heart attacks and strokes.

The survey found that there were many problems with the way Chinese people used medications. About 90% bought prescription drugs from pharmacies and self-treated without getting advice or a diagnosis from a doctor. Almost 70% did not read the package insert and a third made major mistakes in dosing while 25% did not take the medicine correctly and failed o get the expected benefit.

 Zhang Jichun said many of the problems with drugs occurred in children and the elderly, who were more susceptible to their effects. A typical and common avoidable serious problem was deafness seen in 300,000 children due to overuse of some classes of antibiotics. This side effect occurred due to parental medication without being aware of the risks.

In the elderly one of the main problems was excessive medication, he added. Many elderly people take several different drugs for various ailments without understanding that they can interact to cause severe side effects, he said. Elderly people also made the mistake of taking western medicines with Chinese traditional medications, and this could also cause problems he said.

To try address this problem the China Pharmaceutical Association has set up a "medication safety expert advice hotline” and invites all Chinese to seek advice before using medications.

The previous head of the China FDA was shot for corruption - now his replacement is also in trouble

Former FDA chief Zheng Xiaoyu sentenced to death in 2007

by Michael Woodhead
Strange goings on at the China Food and Drug Administration. The top leaders past and present are facing public criticism for alleged corruption around the national pharmacopeia. 
There is a possibility that this bizarre case is a veiled way for the Xi Jinping administration to remove a senior official. There again, it might all be true.

The allegations relate to changes made to the official classification of the herbal remedy honeysuckle to favour producers in the Shandong hometown region of Shao Mingli, who recently stood down as FDA director. The claims are being made by an obscure provincial Party official from Hunan, who posted on his Weibo account that former FDA director amended the Chinese Pharmacopoeia to favour the use honeysuckle from his hometown area of north China, which resulted in south China producers losing business.

According to Shanghai Daily, the minor official, who is a member of the local disciplinary committee, says he has gone public because his private complaints were ignored. He claims the Pharmacopoeia Commission under the control of Shao Mingli changed the official terminology so that only plants from Shandong Province, where Shao comes from, could be used in herbal remedies.

The 'whistleblower' says he simply wants to see southern honeysuckle restored to official status so that southern China growers could resume their business. However, as well as calling Shao Mingli 'the major culprit', the official has also implicated other senior FDA officials and has called for the current director of the FDA, Zhang Yong, to step down as he has been obstructive and failed to act on the concerns of officials in southern Chinese provinces.

This might all be taken as a minor business dispute but for the fact that reports of the claims are being reportedly prominently in official media. If the whistleblower's claims are accepted as true this would lead to a major purge of the FDA leadership. And as you may know, this isn't the first time that the leadership of the China FDA have been in serious trouble. The accused Shao Mingli's predecessor Zheng Xiaoyu was executed in 2007 after being found guilty of accepting bribes in return for listing medicines.

According to the official FDA website, the current director Zhang Yong has addressed the claims and made a report to the Party Central Commission for Discipline Inspection. Is this a sign of China's greater openness and accountability? Or is it a Machiavellian way for the new Xi Jinping leadership to take out the leadership of the national drug regulator and replace them with their own people? I doubt that anyone will face the firing squad this time. Some powerful FDA figures may lose their positions, or this may simply be a way of putting them on notice and showing them who is the boss. It may all come to nothing.

Whichever is true, it seem that being head of the FDA in China is a very dangerous career move.

HPV vaccine delay | Baidu medical fraud | Malaria system success | Gassers in short supply | GSK case won't stop bribery

1. China may be delaying approval of HPV vaccines made by foreign companies until the country has a homegrown competitor, according to Global Times. The HPV vaccines Gardasil and Cervarix are still not available in China despite 30,000 women dying in China every year of HPV-related cervical cancer. Some Chinese doctors and officials claim there are ethnic differences in vaccine responses between Chinese and Europeans, and clinical trials that in Chinese people are needed to ensure of the vaccines' safety and efficiency on Chinese.

2.  Baidu earns its fortune by promoting fraudulent medical information at the cost of health and even lives, critics say. The search engine site is the main avenue used by illegal drug manufacturers and illegal hospitals to advertise in China, they claim. Many drugs that are explicitly banned by the China Food and Drug Administration (CFDA) are still on promotion on Baidu, an article in Daily Kos says.

3. A '1-3-7' system of dealing with malaria cases that is very successful and could be a model for other countries, researchers from the Jiangsu Institute of Parasitic Diseases claim. The system is based on case reporting within one day, case investigation within three days. and focus investigation and action within seven days.Since the system was implemented in 2012 the proportion of cases investigated in 3 days has reached 100%, and seven-day action rates are 50% and rising.

4. China has a shortage of 200,000 anesthesiologists as doctors avoid the speciality due to low salaries, heavy workloads and lack of a strong training system, experts say. A conference was told that China has only 100,000 anesthesiologists but needs 300,000. Eight anesthesiologists died of overwork last year, according to Yu Weifeng, head of the anaesthesiologist branch of the Chinese Medical Doctors Association.

5. A cure for the endemic corruption in China's healthcare system is still far away despite the scare campaign against executives of British pharma company GSK, the online magazine Caixin says. While the crackdown makes the authorities look like they are being tough on bribery for prescribing, the reality is that doctors still accept commissions and there is no fix for the 'demand side' of the bribery equation, the magazine says. The health ministry cannot afford to alienate doctors, who are central to the problem, it concludes.

Are China's health reforms stalling? Health ministry denies rumours

by Michael Woodhead
In an unusual move, a spokesman for the National Health and Family Planning Commission (NHFPC) this week spent much of a press conference trying to refute rumours that the health reforms were proving "too difficult" for the NHFPC to implement.
The spokesman for  health minister Li Bin specifically rejected media speculation that the State Council had decided  that implementation of health reforms should be transferred back the the National Reform and Development Commission.
The move comes after media reports noted that plans to merge China's urban and rural  health insurance schemes had stalled. A financial article re-published widely on social media site WeChat had also questioned whether the health ministry had the clout to push through necessary reforms of hospital finances to remove the dependence on income from pharmaceuticals. This was a tough task as the reforms face strong opposition from the medical profession, whose income is based on sales on drugs. Some have also questioned the ability of the health ministry to be a reformer "reforming itself"
and say it has shown weakness in co-ordinating reforms.
Spokesman Mao Qunan said the article was just a rumour and there were no plans to return the reforms to the National Reform and development Commission. He said health reforms were progressing steadily and it was expected hat there would be difficulties along the way. He noted that Premier Li Keqiang had put special emphasis on deepening the health reforms and implementing them in public hospitals, and this was now being extended to more than 1000 country level hospitals.
Health economists such as Professor Hu Suanlian of Fudan University, Shanghai have commented that health reforms are difficult to implement and co-ordinate because they involve many departments with different aims and responsibilities - such as finance, social security and health. There is also the problem of different provinces and cities having different health insurance arrangements and different priorities.
[Editor's note: This unusual admission of a rumour - and the concerted effort to quash it suggests  there is real opposition within the health system - and perhaps the political establishment - to China's health reforms. The health ministry spokesman made specific reference to doctors' income and the pharmaceutical procurement system as sensitive areas of the reforms. This suggests that those with financial vested interests in the status quo - the medical profession, hospitals and the pharma industry - may be trying to stall the reforms or turn them to their advantage.]

Doctor's income must not be linked to drug sales or patient quotas, health ministry says

by Michael Woodhead
Doctor's income must not be linked to sales of drugs or other profit-linked activities such as the numbers of tests done or patients seen, the National Health and Family Planning Commission has decreed.
Under the new health reforms for county-level hospitals, any bonus schemes for doctors must be 'scientific' and related to appropriate performance measures such as efficiency and patient satisfaction, the NHFPC has decreed.
It is forbidden for hospitals to set up schemes in which doctors are given quotas or rewards for use of drugs, tests or patients treated, and appraisal must be based on public good and work efficiency.
The rules apply to country-level hospitals, and are an extension of the reforms that were initiated in a trial basis in a 311 hospitals, now extended to more than 1000 hospitals. From now on, county hospitals that serve populations of more than 30,000 people will be graded as second level hospitals.
The new proclamation "Concerning the reform of County Level Hospitals" is made on behalf of the NHFPC in conjunction with the Ministry of Finance, Ministry of Social Security and the State Council.
The aim of the new rules is to break the dependence of hospitals on income from drug sales, the so-called "drug dependence" system. The aim is to establish a new and sustainable model of hospital funding.
The new 'white paper' also contains new guidelines for hospital drug purchasing mechanisms: country level hospitals will now be expected to rely on the provincial level purchasing systems for the drug supplies. Quality will take precedence over price in purchasing, but prices are still expected to be reasonable and fair, based on tendering systems.  Suppliers will be expected to guarantee drug supply and will manage logistics, to cut out the 'middleman' wholesalers role in drug delivery to hospitals.

New non-interferon antivirals will not eliminate hepatitis C overnight, say Chinese experts

by Michael Woodhead
New antiviral drugs offer the chance to eliminate hepatitis C from China, but over-optimistic predictions need a reality check, says a leading Chinese virologist.
In an article in Gastroenterology, Dr Lai Wei of the Peking University People’s Hospital and the Beijing Key Laboratory for Hepatitis C and Liver Disease Immunotherapy says there has been a lot of hype about new pipeline drugs bringing about a "hepatitis C revolution". It is claimed that a whole new range of drugs soon to be released will be able to treat the intractable blood-borne viral disease much more effectively and quickly than current treatments - and most importantly without the debilitating side effects of current drug regimens based on interferon. It is said that drugs such as simeprevir and sofosbuvir will be able to cure hepatitis C infection in 95% of people after a single 12-week course of treatment. If this is true then these drugs could potentially have a major impact in China, which has one of the highest rates of hepatitis C in the world.
It is estimated at least 2% of the Chinese population - about 30 million people - have chronic hepatitis C infection. The disease burden for China in terms of hepatitis C-related cirrhosis, liver failure and liver cancer is huge.
Hepatitis C is a chronic disease, and many of those with the infection remain undiagnosed and untreated until it progresses and the severe consequences such as cirrhosis and liver cancer become apparent. In China fewer than 3% of people with the infection are diagnosed, and only half of those diagnosed get any treatment. And the treatment itself is not very effective or tolerable. The best available agents are peg-interferon and ribavarin, which can produce a 'sustained viral response' in about 70% of patients with a 24-week course - but only in people with certain types of HCV (genotypes 2 or 3). Treatment success rates are much lower for people who have HCY type 1, even with much longer treatment courses. The side effects of treatment resemble a very bad case of flu, and many patients simply cannot or will not tolerate these effects and stop treatment.
The appeal of the new anti-hepatitis C drugs is therefore obvious. They are more effective and bettwr tolerated. Within five years it is theoretically possible for all types of hepatitis C to be cured with a single course of treatment lasting as little as eight weeks.
The reality for China, however, is not so simple. There are three major barriers to eliminating hepatitis C from China.

1. First and foremost is the problem of identifying the 97% of people in China who have hepatitis C infection but are not diagnosed. This will require some kind of screening program - and this may be very expensive unless there is an accurate and affordable test available. Identification of hepatitis C also requires the public to be aware of the disease and that it can be treated.

2.If patients with hepatitis C are identified they then need to be able and willing to access treatment. Many people with hepatitis C live in rural areas. Even in cities, China does not have a sufficiently large medical workforce with the skills to accurately diagnose hepatitis C and provide appropriate tailored treatment and follow up. A major medical workforce expansion and education program would be needed.

3. The new hepatitis C treatments are not affordable for a developing country like China . The costs of the new anti-hepatitis treatments are enormous. In the US a single course of sofosbuvir costs $84,000. Some countries such as India and Egypt have planned low cost programs for antiviral drugs for hepatitis C. But even if low cost versions of these new drugs are produced generically, the costs of treating 30 million people will still be huge. There is also a question of whether the new drug treatments can be used in sub-groups of patients with hepatitis C such as those with co-morbidities, cirrhosis the elderly and most importantly, in children

In summary, China has potentially much to gain from the new era of hepatitis C treatment - but huge practical problems lay ahead in identifying people with the infection and getting them into treatment.

Seven doctors jailed for accepting drug company commissions

by Michael Woodhead
Seven doctors from Baotou in Inner Mongolia have been found guilty and jailed for accepting sales commissions from pharmaceutical companies and other bribes.
The seven doctors are  heads of various medical departments at the Baotou No 6 Hospital and also include the chief physician for the hospital. They are accused of accepting commissions from pharmaceutical company representatives for amounts between 80,000 yuan and 710,000 yuan. The commissions were illegal and constituted bribes according to the law, the court heard.
Five of the doctors are also accused of accepting bribes for providing favourable medical and psychiatric reports in legal cases to help people get lighter sentences or avoid financial penalties in court cases.
The doctors were found guilty and sentenced to terms of imprisonment ranging from  18 months to seven and a half years, suspended for two years.
The doctors have appealed the severity of their sentences, disputing the amount of prescribing that was claimed in court.
A representative from Jiangsu Enhua pharmaceuticals was also tried for giving bribes of more than 240,000 yuan to doctors at the hospital in return for writing prescriptions. He was sentenced to three years in prison, suspended for four years, and fined 10,000 yuan.

Essential medicines for children not available in China

by Michael Woodhead
Essential paediatric medicines such as amoxicillin and salbutamol are often not available in Chinese hospitals or private sector pharmacies, and those that are stocked come with hefty markups, a survey from Shaanxi has found.
When researchers from Xi'an Jiaotong University surveyed a sample of pharmacies and hospital dispensaries to check the availability of 28 common paediatric medicines they found that less than 30% of the drugs on their list were available. The list included basic medicines such as antibiotics, analgesics, antihistamines and vitamins. Drugs that were not available included amoxycillin-clavulanic acid, ibuprofen, morphine and vitamin B6.
Writing in PLOS One, the researchers said this was a concern because when paediatric drugs are not available, doctors   may try adapt adult versions of the drug by using lower doses, which is dangerous. Or if the recommended drug is not available, doctors may substitute a less appropriate drug, they added.
They also found that the paediatric drugs that were available often had huge markup over and above the manufacturers selling price. Amxoycillin, for example, had a manufacturer's price of 6.20 yuan but was sold to the patient for 11 yuan,  a markup of 77%. Salbutamol had a manufacturer's list rice of 13 yuan but sold for 37 yuan to the public. The recommended treatment for chronic asthma,  beclomethasone, cost about 1.6 days’ wages, which made it unaffordable in the public sector hospitals especially as it is needed for ongoing treatment of a chronic condition.
Most of the high markups was due to  public hospital pharmacy profit margins.
The researchers concluded: "We recommend that relevant measures should be taken to enable children to obtain sufficient medicines and effective treatment at affordable prices. The government should adjust the prices of originator brands and lowest-priced generics and improve the efficiency of centralised medicine purchasing systems.
"We recommend urgently that the government should substantially improve public drug procurement and price management, making the procurement system more efficient and the pricing system more scientific, rational and transparent."

Medical sales bribery: offenders to be named and shamed

by Michael Woodhead

Companies and individuals found to be involved in bribery related to the sales or purchasing of medical and pharmaceutical supplies will be banned for two years and their details added to a public blacklist, the National Health and Family Planning Commission has announced.

From this year, all provincial health departments will be required to investigate and take strong action against bribery in the purchasing and sales of medical products the NHFPC says. Offenders must be listed publicly on a 'blacklist' that is made available for the public on the website of the provincial health department. Details must be added within 5 days of  being found guilty, and the offenders will be banned from buying or selling medical goods to public hospitals and clinics for a period of two years, the NHFPC statement says. The national office of the NHFPC must also be notified of any bribery cases within one month, and it will compile a summary at the end of the year.