Peter Humphrey along with his American wife, Yu Yingzeng, has been held in connection with an alleged £320million bribery scandal at drugs giant GlaxoSmithKline (GSK).
The incident was revealed when police accused GSK of bribing officials and doctors for six years to boost sales and the price of its medicines. According to the Xinhua news agency, a number of individuals allegedly involved in the series of corruption have made confessions. The Chinese authority now believes that the corrupt payments were organised by GSK China rather than by individual drug salesmen. This allegation is, however, denied by GSK in a statement issued by the biggest pharmaceutical company in the UK.
The incident has also exposed the corrupt medical system in China where many medical practitioners would appear to rely more on kickbacks from pharmaceutical companies than salaries to support their livelihood.
As a fast growing market for drug-makers and medical equipment suppliers, China is appealing to many large pharmaceutical companies. To promote their products and to increase sales, some pharmaceutical companies offer kickbacks and bribes to hospital officials and doctors.
The prevalence of corruption in the Chinese medical sector is exacerbated by the low base salaries of senior medical staff and doctors. It is reported that a first year doctor who has graduated from medical school in Beijing earns around RMB$ 3,000 per month including bonuses, which will only increase to around RMB$ 10,000 after 10 years of practice. The remuneration of doctors cannot provide much incentive to practise without income from other sources.
For further information of the GlaxoSmithKline Scandal and corruption in the Chinese medical sector, please refer to the article published on 29 August 2013 by SCMP China here.