Attorney Thomas Fox cannot believe how history is repeating itself with new bribery and corruption charges in China’s healthcare industry. Fox breaks down what happened, identifies the different types of bribery schemes that occurred, and provides red flags organizations should be looking for to prevent Foreign Corrupt Practices Act (FCPA) violations in a multi-part blog series.
Fox’s series focuses on the information brought to light in the New York Times piece entitled “Selling CT Scanners with Bricks of Bills in China.” Fox’s blogs also outline the two main types of bribery schemes in the Chinese healthcare industry illustrated in the Financial Times article “Bribery Built into the Fabric of Chinese Healthcare System.”
With the direct incentive method, a company representative provides cash, gift cards, vouchers, or opens a bank account with a debit card, and gives one of the above directly to a hospital executive or physician for purchasing or recommending usage of one of the company’s medical devices.
The indirect incentive method tends “to be used by larger pharmaceutical groups with stricter governance procedures.” An example is a company representative making a cash payment to a third-party such as a travel agency who then provides rewards directly to a hospital executive or physician. Or, the company representative may provide cash to the hospital, who in turns pays it out to physicians as monthly or annual bonuses.
To find out more about what happened in China and how your organization can learn from it by identifying related red flags, consider reading Thomas Fox’s blog series.
MCO can help with your Anti-corruption and Bribery efforts.