China to introduce healthcare corruption "blacklist" in 2014

SHANGHAI (REUTERS) - China will introduce a blacklist of drugmakers and medical device manufacturers found to have paid bribes as it extends a crackdown on graft in the healthcare sector.

Healthcare departments will compile lists of offending manufacturers, agents and individuals, which will be published online, the National Health and Family Planning Commission said on Friday.

The list will come into effect from the beginning of March.

Firms on the list once will be banned for two years from selling within the region where they were implicated.

Those appearing on the list twice in five years will be banned nationally, also for two years.

Corruption in the healthcare sector has been in the spotlight this year with regulators investigating international and domestic drugs firms and milk powder companies for suspected graft.

The most high-profile investigation involved British drugmaker GlaxoSmithKline, significantly denting the firm's China sales and spooking doctors more widely to reduce interaction with sales teams.

GSK has said some of its senior Chinese executives appear to have broken the law.

It has also said it has zero tolerance for bribery, calling the allegations in China "shameful".

With the country's healthcare spending forecast to nearly triple to $1 trillion by 2020 from $357 billion in 2011, according to consulting firm McKinsey, China is a magnet for makers of medicines and medical equipment.

The blacklists will include those found guilty of relatively minor bribery but who may not have been punished by China's courts, as well as those who have received administrative punishments from sector and financial watchdogs.

The blacklists will display the name of the manufacturer or agent, its business address and legal representative, as well as details of the alleged crime, the commission said.

Under the amended rules, regional healthcare departments will be required to report their lists to the central healthcare commission within a month. They will also need to give those it plans to list the right to query the ruling.

Any medical practitioners who receive bribes will also be punished, and in severe cases have their medical licenses revoked.

Corruption in China's medical sector is fuelled in part by low base salaries for doctors and nurses at the country's 13,500 public hospitals.

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