Greater investment in public facilities, more effective regulation and enforcement of ethics required

It was only last year that GlaxoSmithKline Plc was fined the equivalent of $500 million in China for bribing officials to push its medicine sales.

But here we are again, with media reports saying that the State Administration for Industry and Commerce has accused Germany-based Siemens AG and its dealers of violating the competition law. Siemens allegedly donated medical devices in return for agreements from customers that they would exclusively buy the chemical reagents needed to use these machines from Siemens.

But it is important to look around the world and put developments in China into context.

It was only the year before last when reports on bribery in the United Kingdom's health sector circulated widely in the international media. The reports suggested even more widespread and unethical, if not illegal, activity in the UK.

Specifically, it was reported that private healthcare companies were regularly offering doctors incentives such as bonuses and even "free" receptionists in return for drug orders or referrals. It was reported that about 15 percent of all UK medical consultants had been offered cash for referrals. The US healthcare sector is also often reported to be riddled with corruption involving medical professionals and private healthcare companies.

Clearly, corruption across the healthcare sector is rife globally, and the influence of the private sector is the root cause.

The way forward in China is also clear: minimizing or eliminating the role of the profit-driven private sector in the Chinese healthcare sector.

While a greater role for the private sector and privatization is needed in much of the Chinese economy, it represents a retrograde step in the healthcare industry.

The power of the private sector in China's healthcare industry must be appreciated to understand the threat of corruption. At present, foreign pharmaceutical products and companies enjoy a huge advantage in China and are perceived by the public far more positively than domestic providers.

So it is no surprise to hear more about alleged abuses of this market power. What is the answer to this problem?

Greater investment across the public healthcare sector, coupled with more effective regulation and enforcement of rules against ethical breaches.

The Chinese authorities should also investigate the influence of private industry across the global healthcare sector. The healthcare sector and private industry is a poisonous partnership.

Sustainable economic development in China requires a strong public healthcare sector just as much as it requires innovative, competitive private enterprise across most other industries.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.