The Shanghai Administration for Market Regulation (AMR) has released a set of illustrative sample cases under the Compliance Guidelines for Pharmaceutical Companies to Prevent Commercial Bribery Risks (《医药企业防范商业贿赂风险合规指引》) (Guidelines), published by China’s State Administration for Market Regulation (SAMR) in January 2025.
The Guidelines, a landmark framework designed to curb corruption in the pharmaceutical industry, are not legally binding. However, they reflect SAMR’s enforcement priorities under the Anti-Unfair Competition Law (AUCL), particularly regarding commercial bribery. They set out detailed, actionable measures to help life sciences companies navigate high-risk areas and align with regulatory expectations.
The set of illustrative sample cases (Case Handbook) demonstrates the Guidelines' principles through real-world scenarios of commercial bribery in the industry.
The Shanghai AMR’s initiative signals a shift from reactive enforcement to proactive prevention, providing life sciences companies with clear guidance on navigating high-risk areas such as academic visits, consulting services, and sponsorships. The Case Handbook reveals common schemes used to conceal violations and outlines actionable compliance measures to help companies adhere to the Guidelines and avoid illicit practices.
Background
The Guidelines represent China's first comprehensive, industry-specific compliance framework targeting commercial bribery in the healthcare sector. By providing scenario-based guidance, they help companies navigate nine high-risk areas including (1) academic visits, (2) business hospitality, (3) consulting services (fee-for-service), (4) service providers, (5) discounts, rebates, and commissions, (6) donations and sponsorships, (7) free equipment, (8) clinical research, and (9) retail sales.
These provisions address corruption risks in sales, marketing, and interactions with healthcare professionals (HCPs), applying to both pharmaceutical and medical device companies across research, development, manufacturing, and distribution.
To recap, the key requirements in the Guidelines include the below.
- Academic visits: Companies must not assign sales targets to medical representatives or collect prescription data during academic exchanges with HCPs, nor offer cash kickbacks or influence prescribing decisions (Article 13).
- Business hospitality: Companies may provide reasonable hospitality proportionate to business needs (Article 15) but must avoid lavish venues, gifts, or involving HCPs’ family members (Article 16).
- Fee-for-service for HCPs: Companies may pay HCPs for genuine services at fair market value, preferably via bank transfers, but must not make undocumented payments (Article 18). Cash payments are discouraged (Article 19).
- Service providers: Companies may engage service providers through competitive selection with detailed contracts (Article 21) but must not use providers as bribery conduits (Article 22).
- Discounts/rebates/commissions: Companies may offer transparent and truthfully recorded discounts with clear policies and separated duties but must not disguise bribes as discounts (Articles 23–25).
- Donations/sponsorships: Companies may make non-targeted donations with clear agreements (Article 34) but must not sponsor individual HCPs or influence purchase decisions (Article 31).
- Free equipment: Companies may provide equipment only for legitimate purposes without ownership transfer (Article 36) but must not tie equipment to purchase obligations (Article 37).
- Clinical research: Companies may conduct clinical trials with anti-bribery clauses and payments for actual services (Article 39) but must not use sham projects for improper benefits (Article 40).
- Retail sales: Companies must not offer cash rebates to pharmacies or HCPs to boost sales (Article 43).
Illustrative cases
The Case Handbook directly links its examples to specific articles in the Guidelines, offering a practical application of the rules. The following table provides a comprehensive breakdown of each case in the Case Handbook, including the type of bribe scenario, parties involved, form of the benefits provided, case summary, and Shanghai AMR's official commentary. This structured analysis demonstrates how the Guidelines apply to real-world situations, offering companies actionable insights for compliance.
In addition, when assessing penalties for commercial bribery violations, the Shanghai AMR considers various aggravating and mitigating factors under Articles 47 and 48 of the Guidelines, as illustrated by the following case examples in the Case Handbook:
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Aggravating factors:
- Obstruction of investigations: In “Academic visits (Case 1),” Company A’s management absconded and instructed employees to deny investigators access to premises and to withhold documents, resulting in heightened penalties for non-cooperation.
- Fabrication of evidence: In “Business hospitality (Case 1),” Company A fabricated attendee lists and records of cash distributions (red packets), triggering stricter penalties for deliberate deception.
- Retaliation against cooperating employees: In “Service Providers (Case 1),” Company A terminated, without justification, employees who cooperated with the investigation or proactively provided evidence to the investigators, resulting in increased penalties.
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Mitigating factors:
- Cooperation with authorities: In “Fee-for-service (Case 1),” Company A promptly responded to regulatory inquiries, provided truthful information, and submitted all relevant documentation, potentially leading to reduced penalties.
- Voluntary disclosure and reporting: In “Discounts/rebates (Case 1),” the company proactively disclosed its illegal activities, fully cooperated with the market supervision authorities, and provided relevant evidence, which resulted in a mitigated penalty.
Key takeaways for life sciences companies
The SAMR's Guidelines and Shanghai AMR's Case Handbook provide private companies with practical insights and real-world examples to strengthen anti-bribery compliance and mitigate legal risks in China’s healthcare industry. For pharmaceutical and medical device companies, key implications include:
- Anti-bribery policies and training: Companies are encouraged to adopt clear anti-bribery policies prohibiting improper incentives (eg, cash payments tied to sales volumes) and lavish hospitality (eg, high-end banquets and luxury travel) for HCPs or their family members, reinforced through regular and enhanced compliance training.
- Financial transparency: Companies are encouraged to maintain accurate records of all financial transactions (eg, consulting fees or discounts) and process payments via bank transfers when engaging HCPs for clinical research or academic events, ensuring services are supported by verifiable deliverables (eg, written reports and meeting minutes) and institutional approvals.
- Third-party due diligence: When outsourcing services or engaging foundations for donations, companies are encouraged to conduct thorough third-party due diligence, including checks on legal registration, financial records, tax compliance, and past violations. Contracts may include anti-bribery clauses and clearly define service scope, fees, and duration to prevent illicit payments.
- High-risk activity audits: Companies are encouraged to conduct regular audits of high-risk activities, such as equipment provision or sponsorships. Equipment loans should include clear ownership terms and no purchase obligations for relevant consumables. Donations must not be targeted and should not designate specific beneficiaries.
- Regulatory cooperation: Companies are advised to cooperate proactively with regulators by providing accurate documents during investigations.
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