The secret "purchase" rebate behind the hospital's "outsourcing drug" profiteering is as high as 30%

On July 20, 2007, a hidden issue within hospital drug procurement came to light. The secret behind the "purchasing" of medicines was revealed to involve rebates as high as 30%. Doctors would recommend specific drugs, which patients then purchased directly from medical representatives. This practice, known as "outsourcing medicine," created a dangerous and unethical system that put patients at risk. Recently, families from the Haizhu District Court in Guangzhou filed a lawsuit against Zhujiang Hospital, bringing attention to the widespread issue of "outsourcing drugs" in large hospitals across the city. In one case, doctors advised patients to buy expensive medications outside the hospital, leading to tragic outcomes when procedures failed. Between July 2004 and September 2005, 15 children with thalassemia underwent bone marrow transplants at Zhujiang Hospital, where the hospital claimed a success rate of 93%. However, nine of those children died, and three cases were unsuccessful, despite families spending between 200,000 and 700,000 yuan on treatment. Parents reported that Dr. Zhu Weiguo, the deputy director of pediatrics, instructed them to purchase certain high-cost drugs from an individual named Wang Hua. One such drug, celecoxib, cost up to 4,500 yuan per dose. Dr. Zhu claimed these drugs were not available in China or that domestic alternatives were less effective than those from Hong Kong. However, investigations later showed that the drugs—such as Andaosheng, amphotericin B, and fludarabine—were sold by Guangzhou Cancer Pharmacy. These drugs were priced significantly higher than their market value, with some selling for as much as 500 yuan per 25 pieces. After complaints from parents, the Guangdong Provincial Health Department and Food and Drug Administration suspended Dr. Zhu and halted the hospital’s bone marrow transplant program. The hospital defended itself by stating that the “outsourcing” of drugs was Dr. Zhu’s personal act, and they only had management responsibility. Parents, however, felt this was an excuse and took the hospital to court. Dr. Zhu claimed the drugs were sourced from Hong Kong’s Haohua Pharmacy, but no records of such transactions were found. A pharmacy clerk confirmed that no such large-scale deal had occurred. Experts warn that patients face significant risks when following doctors’ recommendations to purchase drugs externally. Without proper oversight, some drug dealers may sell substandard or overpriced products, endangering patients’ health and finances. In some hospitals, “outsourcing drugs” has become an open secret. According to a pharmaceutical representative, rebates for doctors can reach 15% to 30%, far exceeding the 5% to 10% typically given when drugs are prescribed through the hospital. By bypassing the hospital and pharmaceutical company, these deals allow for higher profits. Some companies even avoid taxes and markups, making the practice highly lucrative. With increased scrutiny from authorities, doctors have become more cautious about direct interactions with representatives. However, some companies have formed dedicated “outsourcing drug groups” to continue influencing prescriptions. The Guangdong Province’s “sunshine procurement” initiative has made it harder for unselected drugs to enter hospitals, pushing companies to find new ways to promote their products. Experts suggest that limiting or eliminating the role of medical representatives could help reduce the problem. Some propose separating medicine from medical practice, allowing patients to buy drugs from any pharmacy with a prescription. Others argue that stricter regulation of digital prescription data could prevent misuse. Ultimately, reforming the current system is essential to protect both patients and the integrity of the healthcare system.

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