This month, as part of China's ongoing anti-corruption campaign in the healthcare sector, the State Administration for Market Regulation (SAMR) issued the Compliance Guidelines for Pharmaceutical Corporations on Prevention of Commercial Bribery1 (Compliance Guidelines) to provide pharmaceutical and medical device companies in China with guidance on the management of anti-corruption risk. We set out some key points to note.
1. High expectations of compliance programs
Through the Compliance Guidelines, SAMR places the primary responsibility for managing anti-corruption risk on corporations, which are expected to develop compliance programs capable of detecting, mitigating, and addressing such risks in line with international best practices. The Compliance Guidelines may help to narrow the perceived gap between the compliance requirements that multinational corporations (MNCs) operating in China face under the laws of their home countries and the often-cited inadequate compliance infrastructure in domestic companies.
2. Areas of elevated corruption risk and enforcement priorities
SAMR points to elevated corruption risks in nine types of activities that companies may engage in within China, which are:
- visits to healthcare professionals (HCPs)
- hospitality
- consulting services involving HCPs
- outsourced activities
- rebates
- donations and sponsorships
- free provision of medical equipment
- clinical trials and research
- retail sales.
How, and how quickly, authorities will take action against companies that fall short of the Compliance Guidelines remains to be seen.
3. An evolving anti-corruption regulatory landscape
MNCs in China should view the Compliance Guidelines in the context of an evolving regulatory landscape. On December 25, 2024, China's National People's Congress published draft revisions to the Anti-Unfair Competition Law,2 proposing to penalize bribe receivers, to raise maximum fines on corporations found liable for commercial bribery, and to introduce a new penalty that fines legal representatives and other individuals responsible for a corporation's commercial bribery.
All of the above points to a tightening environment aimed at combating corruption. Indeed, with regulatory scrutiny on healthcare gathering momentum—particularly in areas such as medical insurance fraud and improper value transfers to HCPs—corporations in China should continue to closely monitor regulatory developments and enforcement priorities in 2025.
Footnotes
1. In Chinese characters: 医药企业防范商业贿赂风险合规指引
2. In Chinese characters: 中华人民共和国反不正当竞争法（修订草案）
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