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Thursday
May262016

Jerry Fang: China authorities investigating bribery in vaccine scandal

In early 2016, a vaccine scandal shocked China as millions of improperly stored vaccines were widely distributed and used.

The affected vaccines had a total market value of RMB 570 million ($88 million).

Right after the vaccine scandal, Chinese authorities began to investigate and arrest many suspects.

On May 20, 2016, the Supreme People’s Procuratorate (SPP) announced that the local procuratorates (prosecutors) in various provinces had approved the arrests of 125 suspects involved in the scandal. 

Among those suspects, 37 individuals were investigated for crimes related to their occupational responsibilities, including 17 individuals for bribery and others for abuse of powers.

The officials caught in bribery cases include responsible officials of township health centers and county centers for disease control and prevention. They allegedly accepted bribes from medical representatives and vaccine sellers for purchasing the affected vaccines.

According to the investigation, all the vaccines involved were produced by qualified and licensed manufactures in China. The problem was the storage and transporting of the vaccines.

The Chinese Food and Drug Administration (CFDA) is investigating companies involved in distributing the vaccines. The CFDA has already revoked the business licenses of some companies because they tranported and stored the vaccines in illegal ways. Any administrative penalties imposed by the FCDA will not preclude criminal charges for bribery.

The healthcare and pharmaceutical sector in China has earned a reputation of substantial bribery risks.The recent arrests in the vaccine scandal are further evidence that Chinese authorities are still cracking down on corruption and bribery in the sector.

Both Chinese pharmas and international players will need to enhance their internal controls to avoid being involved in a bribery scandal. 

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Jianwei (Jerry) Fang is a partner with the China-based Global Law Office in the firm's Shanghai and Beijing offices. He was a judge in China and studied law at Columbia. He can be reached here.