By Michael Martina
BEIJING, July 24 (Reuters) - China's official news agencyhinted that more foreign pharmaceutical firms could soon beimplicated in a corruption scandal sweeping the industry, in thewake of bribery accusations against British drugmakerGlaxoSmithKline.
"It will not be surprising if more pharmaceutical companiesand hospitals, domestic or international, are to be involved inprobes in the days to come," the Xinhua news agency said onWednesday in an English-language commentary.
Xinhua did not name any firms or hospitals, but said thegovernment was trying to tackle "rampant" malpractice in thepharmaceutical sector, including corruption.
Underscoring the rot in China's health sector, state mediasaid more than 1,000 doctors, nurses and administrators at 73hospitals in Zhangzhou city in the southeastern province ofFujian had been found taking kickbacks.
State broadcaster CCTV said 90 percent of the city's doctorswere involved and that authorities had recovered 20.5 millionyuan ($3.34 million) in illicit funds after a six monthinvestigation.
A lot of the kickbacks revolved around the distribution ofmedicines, CCTV said. It said 57 people, called "drug reps" inthe report, had been detained. CCTV did not name any companies.
Chinese police have accused GlaxoSmithKline of funnelling upto 3 billion yuan ($488.81 million) to travel agencies tofacilitate bribes to doctors and officials to boost sales andthe price of its medicines in China.
GSK has called the accusations "shameful" and on Monday saidsome of its Chinese executives appeared to have broken the law.
Xinhua said multinational pharmaceutical companies shouldset a good example for local firms.
"Big international firms should shoulder (their) dueresponsibilities to bid farewell to malpractice," it said.
Such commentaries, while not official statements, provide awindow into the government's thinking. English-languagecommentaries are also often intended for internationalconsumption.
GOVERNMENT CRACKDOWN
Xinhua said the following government agencies were alltaking action: the ministries of public security and health, theNational Development and Reform Commission, which sets prices,and the State Administration for Industry and Commerce, aregulator.
"It is true that malpractice has (been) rampant in China'spharmaceutical industry and hospitals for years, but now China(is) determined to reform its health system and root outmalpractice, including taking kickbacks and price-fixing," thecommentary added.
Chinese police have questioned local employees from anotherBritish drugmaker, AstraZeneca. The company has saidpolice were treating this as an individual case and not relatedto other investigations.
Authorities have also visited the offices of Belgiandrugmaker UCB.
And the authorities have detained a British and a U.S.citizen, although it is not clear if those detentions weredirectly linked to the pharmaceutical probe sparked by the GSKallegations.
Corruption in China's pharmaceutical industry is fuelled inpart by the low base salaries for doctors at the country's13,500 public hospitals.
On Tuesday, Xinhua said 39 employees at a hospital insouthern Guangdong province would be punished for takingkickbacks totalling 2.82 million yuan from two local drugmakersbetween January 2010 and December 2012.
China has committed to making health care affordable for its1.37 billion people.
But ordinary Chinese cite the cost of medicine as a majorirritant. Many Chinese prefer foreign brands over local drugsbecause of the widespread circulation of fake medicine.
China's State Council, or cabinet, on Wednesday said in astatement posted on the government's website that it wouldreform drug pricing and procurement mechanisms, guarantee drugquality and "fairly reduce drug costs ... and resolutelyinvestigate illicit kickback behaviour".
Astrazeneca (AZN)
Glaxosmithkline (GSK)
