China's healthcare sector is undergoing significant transformation, with the government implementing stringent regulations to combat corruption and anti-competitive behaviors.
The Central Supervision Commission (CSC) has taken a proactive stance, conducting anti-corruption investigations and calling for investigations into power-money transactions. This increased scrutiny puts healthcare companies at a higher risk of being involved in commercial bribery, making robust anti-corruption measures essential for compliance.
Foreign investors in China's healthcare market face a complex regulatory framework and licensing requirements. They must obtain approval for the establishment of medical institutions and a practicing license from local health authorities. Depending on the scope of their operations, additional licenses may be necessary. The recent "many-in-one" reform has simplified the process by integrating multiple post-establishment licenses into the Practicing License.
The introduction of the "two-invoice system" in pharmaceutical distribution aims to streamline channels and enhance transparency. However, it presents challenges for pharmaceutical companies, requiring effective collaboration and management of partners. Pricing strategies must also be carefully considered to navigate the impact on profit margins and VAT liabilities.
Compliance with laws and regulations governing medical advertising is crucial due to increased scrutiny and stricter standards. Businesses must prioritize compliance and implement qualified professional services, training programs, and internal control systems. Regular compliance audits are necessary to mitigate risks.
Corruption remains a significant concern in China's healthcare industry. Companies must implement robust anti-corruption measures and conduct thorough due diligence when selecting local partners and professional agencies.