Behind the hospital's "medicine purchasing" system lies a secret rebate of up to 30%. Doctors recommend specific drugs, and patients are then directed to buy them directly from medical representatives. This hidden transaction carries significant risks, revealing the underbelly of "outsourcing medicine" for profit.
Recently, family members of a judge from Haizhu District Court in Guangzhou filed a lawsuit against Zhujiang Hospital, drawing widespread public attention. The case exposed the phenomenon of "outsourcing drugs" in some large hospitals in Guangzhou.
Doctors advised patients to purchase expensive medications outside the hospital, and when procedures failed, the hospital became the defendant. Between July 2004 and September 2005, 15 children with thalassemia underwent bone marrow transplants at Zhujiang Hospital. The hospital promised a success rate of 93%, but out of the 15, nine died and three cases failed, despite families spending between 200,000 and 700,000 yuan on treatment.
Parents claimed that before and after their child’s transplant, Zhu Weiguo, the deputy director of pediatrics, instructed them to buy high-cost special drugs from a person named Wang Hua. One anti-rejection drug, celecoxib, was priced as high as 4,500 yuan per vial.
Zhu Weiguo reportedly told parents that these drugs were unavailable in China or that local alternatives couldn't match the effectiveness of those purchased from Hong Kong. According to investigations, the doctors recommended drugs such as Andaosheng, amphotericin B, sinipiride, and fludarabine, which were sold at Guangzhou Cancer Pharmacy. In the local market, Ma Lilan had only 260 pieces sold out of 100. Zhu Weiguo’s “purchasing†price was 500 yuan for 25 pieces.
After receiving complaints, the Guangdong Provincial Health Department and Food and Drug Administration dismissed Zhu Weiguo from his position and suspended the bone marrow transplant program. The hospital insisted that the issue wasn’t with the medicine but with the doctor’s actions, claiming it was a personal decision. Parents, however, refused to accept this explanation and took the hospital to court.
Zhu Weiguo stated that the drugs were sourced from Hong Kong’s Haohua Pharmacy, but the pharmacy denied any transactions involving 100,000 yuan. A clerk confirmed they had never handled such an amount. Reporters found that patients face serious risks when following doctors’ recommendations to buy drugs externally. Without proper oversight, some drug dealers sell substandard products at inflated prices, causing harm to both patients’ health and finances.
Doctors and medical representatives often collude, with rebates reaching up to 30% on “purchased†drugs. According to insiders, “outsourcing drugs†is a well-known practice in some large hospitals in Guangzhou. A pharmaceutical representative, He Jian, revealed that for imported drugs like Sainipi, rebates given to doctors range from 15% to 20%, sometimes even 30%. In contrast, if the drugs were prescribed through the hospital pharmacy, the rebates would be much lower—only 5% to 10%.
The drug supply chain involves multiple layers: factory to company, company to hospital, and hospital to patient. Each step adds a markup, with the hospital marking up by 15% and the pharmaceutical company by 6%. However, “outsourcing†bypasses the 15% hospital markup and avoids the 6% pharmaceutical company profit. It also allows companies to evade 17% VAT, resulting in a profit margin of 22% to 42% that is split among doctors, reps, and agents.
These profits often involve expensive “special effect†drugs, tempting many doctors to take risks. Despite efforts to regulate, such as “sunshine procurement†in Guangdong, where electronic bidding and online negotiations have been implemented, some companies have shifted to forming dedicated “outsourcing drug groups†to continue influencing doctors.
Experts argue that controlling medical representatives is key to breaking the cycle of corruption behind “outsourcing drugs.†However, defining and identifying responsibility remains challenging. Many patients still prefer buying drugs outside the hospital due to perceived quality or cost benefits. Doctors often justify external purchases as being in the patient’s best interest, but those who benefit financially from such arrangements are typically the ones involved in the scheme.
While hospitals struggle to find effective solutions, experts suggest that separating medicine from healthcare could eliminate the role of medical representatives. If patients can purchase drugs from various pharmacies based on prescriptions, the influence of reps would diminish. Additionally, stricter monitoring of prescription data and broader prescription circulation could limit the ability of medical representatives to manipulate prescribing habits.
Puer Tea Powder,Pu 'Er Tea Extract,Spray Dried Tea Powder,Fermented Tea Powder
Shaanxi Zhongyi Kangjian Biotechnology Co.,Ltd , https://www.zhongyiherbs.com