Bribery, collection and cut-off of Yichang people’s welfare, and Baiao Pharmaceutical’s “blacklist” of dishonesty face heavy penalties

On September 18, the official website of Henan Provincial Public Resources Trading Center issued a notice on the evaluation results of the province's medical prices and credit untrustworthiness in recruitment and procurement

According to the previous “blacklist” of dishonesty established by the National Medical Insurance Bureau, in the future, if companies engage in commercial bribery, collect procurement and cut off confessions, they will be regularly exposed and will be punished accordingly

1.

In May of this year, China Procuratorate published three indictments on bribery cases issued by the People’s Procuratorate of Erqi District, Zhengzhou City, Henan Province.

Among them, Fu is a medical representative of "Yichang Pharmaceutical Co.

According to an enterprise search, Renfu Pharmaceutical Group Co.

On September 22, in response to the fact that Yichang Renfu Pharmaceutical was included in the untrustworthy blacklist due to commercial bribery, Renfu Pharmaceutical responded to the media that the relevant commercial bribery was the personal behavior of former employees of the subsidiary, which seriously violated company management.

Affected by this negative news, on the first day after the Mid-Autumn Festival, on September 22, Human Welfare Medicine opened lower, and fell more than 4% intraday

2.

According to the data, entecavir was originally researched by BMS and was approved by the FDA in 2005, with the trade name "Boludin"

In September 2019, the state organized a pilot expansion of centralized drug procurement (also known as "4+7 expansion").

In the 4+7 collection, CP Tianqing’s Entecavir cut its price by 96%, which is far more than market expectations.

The 4+7 expansion rule points out that if there are 3 companies actually selected, the agreed purchase amount shall be 70% of the calculation base of the agreed purchase amount in the first year, and the purchase period shall be 2 years

It is worth noting that on June 4, 2020, the Yunnan Provincial Medical Insurance Bureau also issued a document that there is a shortage of 8 varieties of 4+7 expansion, including Suzhou Dongrui's Entecavir Dispersible Tablets

In the process of centralized procurement in recent years, some pharmaceutical companies have continued to cut supply
.
In response to this, the National Medical Insurance Bureau set out to establish a medical price and a credit evaluation system for recruitment and procurement, and pharmaceutical companies that arbitrarily cut off the supply will face heavy penalties
.
Since the current centralized procurement rule is that one province corresponds to one pharmaceutical company, once the supply is cut off, it will directly affect clinical use
.
Based on this, industry observers pointed out that the subsequent centralized procurement rules can try to be supplied by multiple pharmaceutical companies in each province, or leave more profit margins on some varieties to increase the enthusiasm of pharmaceutical companies to supply
.

3.
The untrustworthy "blacklist" is  regularly exposed for threats, bribes, and confessions.

In August 2020, the National Medical Insurance Administration issued the "Guiding Opinions of the National Medical Insurance Administration on Establishing a Pharmaceutical Price and Recruitment Credit Evaluation System"
.
On November 20 of the same year, the official website of the National Medical Insurance Administration officially published the "Pharmaceutical Price and Recruitment Credit Evaluation Operation Specification (2020 Edition)" and the "Pharmaceutical Price and Recruitment Credit Rating Discretionary Benchmark (2020 Edition)"
.

The National Medical Insurance Bureau formulated and published the "List of Medical Prices and Untrustworthy Items in Recruitment and Procurement" and adjusted it dynamically.
There are 7 untrustworthy items, of which the first 4 untrustworthy acts require the facts of the case as determined by the court or the relevant law enforcement agencies for administrative penalties
.
The details are shown in the figure:

Source: National Medical Insurance Administration

According to factors such as the nature, circumstances, timeliness, and influence of the dishonesty behavior, the dishonesty of pharmaceutical companies in the local bidding procurement market is rated as normal, moderate, serious, and particularly serious
.

The above-mentioned documents clearly stated that for a pharmaceutical company rated as "serious" for untrustworthiness, in addition to warnings and reminders of risks, the company should restrict or suspend the company’s eligibility for listing, bidding, or distribution of drugs or medical consumables involved in the case.
The behavior and results of corporate credit restoration are adjusted in a timely manner
.

This means that the drugs involved in the case of Yichang Renfu and Baiao Pharmaceuticals may be suspended from the Internet, and the two pharmaceutical companies may also be suspended from participating in drug collection activities in the province
.

Take the “North China Pharmaceuticals” that recently stopped supplying, Shandong Province has decided to rate the North China Pharmaceuticals’ untrustworthiness rating as “serious”, discontinue the three-year online qualification of North China Pharmaceuticals ibuprofen sustained-release capsules, and cancel it from August 11, 2021.
From May 10, 2022 to participate in the application qualification for the drug collection activities organized by Shandong Province
.

In addition, in accordance with the relevant provisions of the third batch of national centralized procurement "National Drug Centralized Procurement Document (GY-YD2020-1)", after collective deliberation, member units of the National Organization for Drug Procurement Office decided to include Huabei Pharmaceutical on the "List of Violations.
" Cancel the qualification of the enterprise to participate in the centralized drug procurement activities organized by the state from August 11, 2021 to May 10, 2022
.

In April 2021, the Lugua Polypeptide Injection of Yuheng Pharmaceutical, a wholly-owned subsidiary of Yuheng Pharmaceutical, broke out of commercial bribery, and was rated as "serious" by the price and untrustworthiness rating of the Zhejiang Pharmaceutical Centralized Procurement Market.
Suspend online trading in Zhejiang Province
.
Yuheng Pharmaceutical became the country's first governance case with a credit rating of "serious"
.

The pharmaceutical company was assessed as serious dishonesty, and how to remedy it in the future
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Based on this, the Medical Insurance Bureau has also established a credit restoration mechanism to encourage pharmaceutical companies to take effective measures to proactively restore credit, including terminating relevant untrustworthy behaviors, disposing of untrustworthy persons, submitting compliance rectification reports and accepting compliance inspections, and publicly issuing apology.
Adverse effects, eliminating the false high space in the price of the drugs or medical consumables involved, returning unreasonable returns or public welfare donations, and effectively indicating the actual controlling body of the dishonest behavior
.

In the relevant documents, the National Medical Insurance Bureau also clearly requires all provincial centralized procurement agencies to publish the latest credit rating results collectively before the last working day of the first month of each quarter, and take corresponding measures at the same time
.
This means that in the future, if the company engages in commercial bribery, collecting sourcing and cutting off confessions, it will be regularly exposed, and there will be corresponding penalties
.