Curing the drug market of its ills

China has ordered investigations into alleged corrupt practices of some multinational pharmaceutical companies following the bribery scandal of British pharmaceutical giant GlaxoSmithKline and detention of four of its senior executives last month. Infant formula makers are also part of the investigations.

Earlier this month, the National Development and Reform Commission, China's top economic planning body, imposed a record fine of 670 million yuan ($110 million) on six infant formula producers, including Mead Johnson and Abbott, for price fixing.

Despite being based on Chinese law, the crackdown on the corrupt practices has invited complaints from some foreign media outlets. A few conspiracy theorists even allege the crackdown, aimed at streamlining the pharmaceutical and infant formula market, is part of China's broader plan to tighten the grip on multinationals to benefit local brands. And some of them blame China's business environment for the medicine and infant formula scandals, claiming that the GSK case highlights the risks multinationals face in the Chinese market, where the "healthcare system is notoriously dogged by graft".