Big Pharma has monopoly lock on China, extracting nearly half of the nation's health care expenditures

Wednesday, August 28, 2013 by: Ethan A. Huff, staff writer
Tags: Big Pharma, China, health care costs

(NaturalNews) It is no secret to anyone in the natural health community that the pharmaceutical industry has a stronghold on mainstream medicine in the United States, costing society tens of billions of dollars and hundreds of thousands of human lives every single year. But if you thought things were bad here, consider the current state of affairs in communist China, where nearly half of all health care expenditures are spent on drugs, many of which are not even necessary for those to whom they are being prescribed.

While about 10 percent of America's healthcare budget is spent on pharmaceuticals, China spends up to five times this amount, thanks to extreme drug industry corruption. Major drug companies like U.K.-based GlaxoSmithKline (GSK), for instance, have been exposed for bribing Chinese doctors to prescribe the most expensive drugs to their patients, even when such drugs are not necessary. The drug industry has also been involved in price-fixing activities that have allowed it to maintain a monopoly over healthcare.

According to a 2011 World Health Organization (WHO) report entitled World Medicines Situation, as much as 43 percent of China's total health expenditures is spent on pharmaceutical drugs. Similarly, Chinese hospitals derive nearly half of their incomes from the prescription of pharmaceutical drugs. Naturally, this propensity towards and reliance upon drugs as a source of continued cash flow has created major problems in the world's most populated country.

"Data from the World Health Organization (WHO) and other groups shows how China's drug market has been thrown out of kilter by a system that effectively encourages public hospitals to prescribe large amounts of expensive medicine to earn revenue," explains Reuters. The same WHO report found that "even in the most basic primary care level institutions, patients are frequently provided with unnecessary and expensive drugs."

China finally starting to arrest criminal drug company executives, hold them accountable for illegal activity

However, one major factor in all this that gives China a leg up on the U.S. is the country's willingness to actually deal with the problem. While Americans as a whole seem quite content allowing Big Pharma to rape and pillage the healthcare system without penalty, China is actually arresting the drug company executives responsible for this widespread corruption.

According to the most recent reports, there are now dozens of Big Pharma executives, including at least five from GSK, that have either been arrested or barred from leaving the country until justice is served. And executives from drug giant AstraZeneca and at least five other major drug companies are also on the verge of being indicted, according to Lexology.com.

Gao Feng, the head of the Economic Crimes Unit of the Chinese Ministry of Public Security, says more than 700 travel agencies and consultants are involved in this massive bribery scheme, which was hatched by GSK. GSK executives and possibly many others are accused of offering both financial and sexual kickbacks in exchange for company-benefiting favors.

"It is like a criminal organization, there is always a boss," Feng is quoted as saying. "In this game, GSK is the godfather."

Liang Hong, GSK's Vice President of Operations, recently admitted on Chinese television that his company has spent untold millions of dollars on bribes and other illegal "marketing" schemes in China. According to his own personal account of the situation, as much as 30 percent of the revenue obtained from the sale of drugs in China -- brand-name drugs manufactured by GSK are extremely expensive in China -- is funneled right back into the maintenance of this racket.

Sources for this article include:

http://www.reuters.com

http://www.lexology.com

http://www.theguardian.com