The Shanghai Health Commission, together with 13 other governmental authorities in Shanghai, jointly published on October 10, 2024 the Shanghai version of the 2024 Notice on Issuing the Key Points of Correcting Improper Practices in Pharmaceutical Purchase and Sales as well as Medical Services in 2024 (2024 Notice).
This 2024 Notice aligns substantially with the national annual framework guidelines issued by 14 national-level authorities in May. It reaffirms the continued—and stricter—focus on anti-corruption efforts and the enhancement of integrity practices within the pharmaceutical, medical device, and medical service sectors.
Compared to its predecessor in 2023, the 2024 Notice identifies more specific hidden corruption and compliance issues, such as academic events with paid healthcare professional (HCP) speakers, that occur during pharmaceutical/medical device purchasing, sales, and medical services. Additionally, it places a stronger emphasis on establishing and improving compliance control mechanisms, supported by regular audits and big data-enabled supervision.
KEY TAKEAWAYS
- Strengthened Supervision on HCP Speaking Events: Specific mention is made of "endorsement-type lectures" (站台式讲课) and "lectures during meals" (餐桌式讲课) as key areas for rectifying disguised transfers of value from pharmaceutical/medical device companies to HCPs.
- Management of "Key Minority" and "Key Position" Personnel: Medical institutions must tighten internal controls over personnel in key positions to prevent improper gains or kickbacks. Companies should exercise increased caution when interacting with these individuals.
- Big Data Supported Penetrating Supervision: Authorities will explore the implementation of a "Bribers Blacklist" focusing on repeat offenders, large-scale bribes, and bribes involving multiple individuals. The campaign will target both bribers and recipients, leveraging big data for enhanced detection.
- Enhanced Compliance Control Mechanism: All parties in the industry must establish and improve their internal compliance mechanisms to prevent commercial bribery, particularly regarding interactions between pharmaceutical representatives and HCPs.
COMPARISON WITH THE 2023 CAMPAIGN AND WHAT TO EXPECT IN 2024
- Proactive Compliance Monitoring: The 2024 campaign introduces more preventive measures, including real-time data monitoring, spot checks, and audits to detect issues early, unlike the 2023 campaign’s focus on addressing ongoing corruption.
- Systematic Supervision Mechanism: The 2024 notice introduces a broader range of compliance expectations, holding all parties in the pharmaceutical, medical device, and medical service supply chain accountable for maintaining integrity and compliance throughout manufacturing and distribution.
- Further Diversified Regulation Measures: A combination of various investigation methods is expected in 2024, including inspection tours, audits, big data analysis, complaints, self-inspections, and more.
RECOMMENDATIONS
- Strengthen Internal Compliance: Review and enhance the company’s compliance programs, with regular internal audits focusing on high-risk areas, such as procurement, supplier management, and HCP interactions. Consider investing in digital tools to track and manage compliance records.
- Enhance Employee Training: Ensure that regular compliance training is provided to employees, especially those involved in procurement and HCP interactions, to increase compliance awareness.
- Prepare for Audits: Be prepared for unannounced inspections by regulatory authorities, ensuring that designated personnel are always ready to respond with the necessary supporting documentation.
Morgan Lewis will continue to monitor enforcement practices closely.