(Yicai) April 23 -- China is expected to intensify anti-corruption efforts in the medical sector after the Supreme People’s Court and the Supreme People’s Procuratorate issued a new interpretation to supplement its bribery and corruption law.

Articles 2 and 4 of the Interpretation (II) on Several Issues Concerning the Application of Law in Handling Criminal Cases of Corruption and Bribery, issued on April 10 and coming into effect on May 1, clarify that corporate bribery in the medical sector will be given a heavier punishment.

Moreover, Article 8 of Interpretation (II) stipulates that the standards for conviction and sentencing of non-state functionaries accepting bribes should be implemented in accordance with those for state functionaries. Therefore, the minimum standard for criminal prosecution of ordinary doctors accepting kickbacks was halved to CNY30,000 (USD4,390) from CNY60,000.

The new judicial interpretation enhances the deterrent force of criminal law in the medical field, but it cannot be simply seen as lowering the threshold for conviction, said Xing Long, a criminal lawyer. After the rules are issued, a comprehensive judgment should be made in combination with the enforcement standards, he noted.

“With the standards in place, there will be a basis for cracking down on commercial bribery cases in the medical field,” Xing pointed out.

A widespread practice in the Chinese medical industry consists of providing equipment to hospitals for free, but with exclusive deals for high-priced consumables, which can result in criminal persecution.

For example, the regulators in Yantai, Shandong province, uncovered a case in March where medical distributor Realcan Pharmaceutical Group had provided six testing devices to a local hospital for free since 2020 on the condition that the hospital buys all related consumables from the company, which had secured over CNY6.1 million (USD896,950) in consumables sales by June 2024.

As a result, the regulator fined Realcan Pharma CNY100,000 (USD14,630) and confiscated its illegal gains.

After the new judicial interpretation is implemented, such disguised illegal behaviors may be included in the scope of crackdowns by criminal laws, along with retroactive accountability tracing back five years, or even 20 years for major cases.

This model constitutes commercial bribery under the Anti-Unfair Competition Law, and if the company involved has a dominant market position, it may also constitute a breach of antitrust laws, said Zhang Wei, a partner at Beijing Dacheng Shanghai Law Firm.

Editor: Futura Costaglione