Pharmaceutical giants rethink rebate marketing

NANNING - Pharmaceutical multinationals operating in China are rethinking rebate marketing as the country presses reforms in the industry, experts said at a medical conference that concluded on Friday in South China.

Pharmaceutical industry needs shot of innovation

GSK's China sales may be down 30% on bribery scandal

Fu Bin, an agent for several pharmaceutical multinationals in Southwest China, said that many companies, in the face of stricter governmental supervision, have gradually abandoned the marketing gimmick following a spate of scandals that have tarnished their images.

Rebate marketing is a popular way of boosting product sales in the pharmaceutical sector, in which salespeople recommend new medical products to doctors and pharmacies using promotional funds from their companies.

The promotion efforts have resulted in bribery scandals, as some sales agents, under pressure to meet sales targets set by their companies, secretly offer lucrative kickbacks to doctors and pharmacies in a variety of forms, including refunds, overseas visits, conference expenses, and traveling opportunities, Fu said.

This often leads to doctors prescribing more drugs and abuse of antibiotics, added Fu, who was among scores of representatives of medicine manufacturers and pharmaceutical companies at the conference on pharmaceutical distribution in Nanning, capital of Guangxi Zhuang autonomous region.

China has seen a slew of cases of big pharmaceutical companies suspected of bribing doctors to ramp up benefits.

In July 2013, British pharmaceutical giant GlaxoSmithKline (GSK) was put under investigation for suspected bribery and tax-related offenses by Chinese authorities.

Just one month later, Beijing municipal authorities set up a joint investigation team to probe French drugmaker Sanofi after a Chinese newspaper published bribery allegations against the company.