The draft of the document, initially published for public consultation in October 2024 and followed by a first version on December 30, 2024, offers pharmaceutical and medical companies in China recommendations for managing anti-corruption risks. Although the Guidelines are not legally binding, they are closely aligned with existing laws such as the Anti-Unfair Competition Law of the People’s Republic of China (中华人民共和国反不正当竞争法) and the Drug Administration Law of the People’s Republic of China (中华人民共和国药品管理法). These laws impose specific obligations on companies, and the Guidelines aim to provide specific recommendations for ensuring compliance with those obligations.
The Guidelines are based on international best practices and largely focus on the same core elements of anti-bribery compliance as those outlined by the U.S. Department of Justice and the U.S. Securities and Exchange Commission. However, they additionally highlight specific risk areas typical for China’s healthcare sector. In particular, SAMR identifies nine types of activities that pose heightened corruption risks in China:
- Payments to healthcare professionals;
- Sponsorships, donations, and grants to healthcare institutions;
- Hospitality and entertainment;
- Academic meetings and exchanges;
- Discounts, rebates, and commissions for distributors and third parties;
- Provision of free samples;
- Clinical trials;
- Outsourcing of services;
- Retail sales.
The Guidelines outline specific rules and prohibitions for each of these categories, introducing a detailed classification system that labels certain practices as “prohibited,” “restricted,” “recommended,” or “acceptable.” This structure provides companies with clear guidance for identifying and managing bribery risks.
For example, under the Guidelines:
- Hospitality expenses must be limited to reasonable and modest meal costs, while hospitality such as entertainment, fitness, or tourism is explicitly prohibited;
- Companies are encouraged to pay healthcare professionals via bank transfers;
- Companies are advised to obtain confirmation of the time and content of services from clinical trial institutions and investigators before making payments.
The authors of the Guidelines further emphasize that healthcare organizations should conduct thorough investigations and take timely action to mitigate corruption-related risks. They also encourage companies to self-disclose potential misconduct to regulators, reminding them that voluntary disclosure may result in reduced penalties.
The release of the Guidelines comes amid broader reforms in China’s anti-corruption framework. On December 25, 2024, the National People’s Congress of China published a draft amendment to the Anti-Unfair Competition Law, which, among other things, proposed:
- Penalizing not only bribe givers but also bribe recipients;
- Increasing maximum fines for companies found guilty of commercial bribery;
- Introducing new penalties for individuals such as legal representatives, board members, and other key personnel involved in corporate bribery.
