With confidence, a Shanghai urologist tells a pharmaceutical representative that he plans to prescribe so many of the company’s drugs to his patients in one month that the representative should be able to buy himself a new iPhone 6, a device that costs around 5,000 yuan ($719). “I will definitely earn you a cellphone this month,” the urologist tells the representative in a report that aired on state broadcaster China Central Television (CCTV) last week.

The conclusion to be drawn from the TV station’s eight-month investigation, which relied heavily on hidden cameras, was clear: The kickbacks doctors receive from pharmaceutical companies for prescribing the companies’ drugs have created a relationship in which both benefit financially – often to the detriment of patients. 

Examining six big hospitals in Shanghai and central China’s Hunan province, the investigation found that some doctors received kickbacks as high as 40 percent of the medication price for prescribing certain companies’ drugs.

Shortly after the CCTV broadcast, the National Health and Family Planning Commission ordered the local health departments in Shanghai and Hunan to investigate the bribery cases, and a doctor whose identity was not revealed in the broadcast has been suspended. 

The investigation led doctors to discuss the issue online, and while most admitted that CCTV’s investigation gave an accurate picture when it comes to kickbacks, they rejected the assertion that they were to blame for increasing drug prices in China, at a time when ongoing medical reform is attempting to bring these costs down. Many argued that the CCTV report diverts the public’s attention from the core issue and aggravates the already antagonistic relationship between doctors and patients. 

Dermatologist Sui Keyi in central China’s Henan province admits that doctors should not accept kickbacks but criticized the CCTV investigation for its lack of context. “Doctors and medical representatives are at the bottom of the chain of gray-area profits,” he wrote on Weibo, adding that he doesn’t believe that punishing doctors would fundamentally change the status quo.

In big cities like Shanghai, the price of medication can be as much as 10 times the wholesale price, but kickbacks given to doctors aren’t the main reason for this discrepancy, said Gu Xin, a professor in Peking University’s government management department, who instead blames inefficient government control over the medical industry.  

“The government’s regulation of prices is never accurate and does not keep up with changes in the market,” Gu wrote in an article published in The Paper, Sixth Tone’s sister publication. He argues that patient fees for medical services are set too low, which has led public hospitals to overcharge for medication to generate additional income.

The government has implemented various reform policies to lower the price of drugs, such as forcing hospitals in some areas to sell medications for the same prices that they originally paid to buy the drugs. As a result, the affected hospitals are now losing millions of yuan each year in drug sales, which used to be their major source of income, with the Zhejiang No. 1 Hospital in eastern China’s Jiangsu province reporting a 15 million-yuan loss in drug sales annually. 

“The price of medical services in many places has not changed since the 1990s,” commented Yang Qingfeng, a surgeon in Qinhuangdao, northern China’s Hebei province. “Public hospitals are not allowed to pursue profits; meanwhile, the government offers little financial support to these hospitals. How do you expect doctors to make a living?”

As a result, doctors often order more medical exams and prescribe more drugs — especially those that will earn them higher kickbacks — than necessary. 

In addition, as shown by the CCTV investigation, medical representatives often push doctors to sell more drugs. According to the report, more than 100 pharmaceutical representatives flock to one Shanghai hospital every day to check in with doctors. “I have done this for a month, and now I know that the secret of this job is to keep checking with the doctors about sales every day,” a representative said in the broadcast. 

“The origin of the problem is not the doctors, not the hospitals, and certainly not the medical representatives, but the health department’s improper control over the medical industry,” professor Gu said.

One doctor from southern China’s Guangdong province commented on microblogging site Weibo that while doctors should not take all the blame, they are part of the problem. “Patients are victims. Doctors are victims, but at the same time also beneficiaries and the maintainers of the system,” the doctor wrote. “[Corrupt doctors] are part of the process to create an evil system.”

(Header image: DigitalVision/VCG)