Corruption in the Procurement of Pharmaceuticals and Medical Equipment in China : The Incentives Facing Multinationals, Domestic Firms and Hospital Officials

Calls for reform of the Chinese healthcare system are voiced at the highest levels of government, but this article argues that reform cannot succeed unless policymakers confront the incentives for corruption built into the institutional structure of the healthcare system. Focusing on the markets for pharmaceuticals and medical equipment, the article isolates the special features of healthcare that are conducive to corruption. Without denying the responsibility of individual corporate representatives (both domestic and foreign), middlemen, and healthcare professionals, the article goes behind the individual deals to document the underlying corrupt incentives for hospitals, physicians, and companies, and explains how they organized corrupt practices. It argues that curbing the prevalent corruption requires efforts from companies, both domestic and foreign, and from the government