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Consumer Daily News (Reporter Liu Kunyuan) Recently,Hansoh PharmaceuticalJiangsu Hansoh Pharmaceutical Co., Ltd.PharmaceuticalsGroup Co., Ltd. (referred to as "Hausen Pharmaceuticals") was involved in a bribery scandal.drugAn information consultant gave kickbacks to 46 doctors when conducting a fake academic conference in Enshi, Hubei, and was fined more than 25 million yuan by the Enshi Municipal Market Supervision Administration.

medicineThe company used academic activities to engage in bribery, which is a typical case of "sales with money" and is also a focus of regulatory rectification.

It is reported that Zhong Huijuan, the actual controller and chairman of Hansoh Pharmaceutical, is known as the "Queen of Medicine". Her husband is Sun Piaoyang, known as the "King of Medicine", and is also the actual controller of Hengrui Medicine. The main businesses of the two companies areGeneric DrugsHowever, the performance is not stable due to the impact of centralized procurement. In 2022, Hansoh Pharmaceutical's revenue fell 5.56% year-on-year to 9.382 billion yuan, and its net profit attributable to shareholders fell 4.76% year-on-year to 2.584 billion yuan.

In recent years, Hansoh Pharmaceutical's sales expenses have been much higher than its R&D expenses. Data shows that in 2023, Hansoh Pharmaceutical's R&D expenses were 2.097 billion yuan, with an R&D expense rate of 21%; sales expenses were 3.53 billion yuan, with a sales expense rate of 35%. From 2021 to 2023, Hansoh Pharmaceutical's sales expenses totaled more than 10.5 billion yuan in three years.

1

Academic promotion violations fined tens of millions

On July 8, an administrative penalty decision issued on the official website of Credit China Information showed that Hausen Pharmaceuticals was subject to an administrative penalty by the Enshi Municipal Market Supervision Administration for confiscating approximately 23.44 million yuan in illegal gains and imposing a fine of 2.1 million yuan due to the unfair competition behavior of its wholly-owned subsidiary Jiangsu Hengte Pharmaceutical Sales Co., Ltd. (hereinafter referred to as "Hengte Pharmaceutical").

The administrative penalty decision shows that since 2021, Jiangsu Hengte drug information consultants Xu, Liu and Yang have been responsible for the promotion of flumatinib and ametinib produced by the parties in Enshi. The two drugs are mainly used for the first-line and second-line treatment of patients with chronic myeloid leukemia and lung cancer mutations. Although the above three people have signed a "full-time employment contract" with Jiangsu Hengte, their wages, bonuses and pension insurance are all issued and paid by Hausen Pharmaceuticals.

In the process of promoting the drug, the above three people invited 46 doctors from two hospitals to participate in academic activities including online meetings, questionnaire surveys, literature reviews, etc. on the platform built by Hausen Pharmaceuticals' partner company. It is reported that the invited doctors can get 1,000 yuan in labor fees for answering a questionnaire survey and 2,000-3,000 yuan in labor fees for completing a literature review. The meeting has the roles of host, speaker and commentator (discussion), and different roles correspond to different labor fees, which are 1,000-3,000 yuan per time.

During the above-mentioned academic activities, various violations and frauds occurred. Specifically, the doctors invited to participate in the academic activities had all prescribed and used the drugs of the party concerned, and the doctors were invited to participate in the academic activities without obtaining the consent of the medical institutions where the doctors worked; the courseware produced by the medical department of the party concerned was provided to the doctors through WeChat and other means (the courseware contained the introduction of the party concerned's drugs and the information comparing with competing drugs), and the doctors gave lectures according to the courseware, and most doctors taught the same courseware, resulting in repeated lectures; one-on-one departmental meetings were organized many times in the hospital, in which two doctors gave lectures with the same courseware to each other, and both received labor fees. At the same time, one-on-one internal training meetings between doctors and drug information consultants were also found (some doctors confirmed that they had not held similar meetings with drug information consultants, and the drug information consultants only posed for photos and fabricated meeting materials to upload to the platform).

In addition, the conference pictures in some conference materials were used in multiple conference materials with a large time span, and the people and places shown were inconsistent with the actual situation. There were also cases where the dress of the participants and the speakers were inconsistent. The investigation confirmed that some conference materials were fabricated by drug information consultants using photos taken on a regular basis; there were cases of staged photos and fake photos in the departments of the hospital (the department determined a time for the meeting, and multiple pharmaceutical company staff waited outside the department office and entered the meeting in turn to sign in, etc.).

According to the first paragraph of Article 141 of the Drug Administration Law, if a drug marketing authorization holder, drug manufacturer, drug dealer or medical institution gives or receives kickbacks or other improper benefits in the purchase and sale of drugs, or gives money or other improper benefits to the person in charge of the medical institution that uses its drugs, drug procurement personnel, doctors, pharmacists and other relevant personnel, the market supervision and management department will confiscate the illegal gains and impose a fine of not less than 300,000 yuan but not more than 3 million yuan. In the end, Hausen Pharmaceuticals was fined more than 25.54 million yuan by the regulatory authorities.

Image source: Credit China official website

In May 2024, the National Health Commission and 14 other ministries issued the "Key Points for Correcting Unhealthy Trends in Medical Procurement and Sales and Medical Services in 2024", which showed that relevant departments must strictly investigate illegal and irregular activities in bundled sales and "sales with gold" under the guise of various conferences, donations, scientific research cooperation, experimental promotion, etc., and should also focus on the problem of receiving kickbacks under the guise of academic lectures, external prescriptions, and online prescriptions.

2

Unstable performance, sales expenses have been higher than R&D for many years

Tianyancha shows that Hausen Pharmaceuticals was established in 1995 and is mainly engaged in the research and development, production and sales of anti-tumor and psychiatric drugs. It is a wholly-owned subsidiary of Hansoh Pharmaceuticals controlled directly and indirectly.

It is worth mentioning that the husband of Zhong Huijuan, the actual controller and chairman of Hansoh Pharmaceutical, is Sun Piaoyang, the chairman of Jiangsu Hengrui Medicine Co., Ltd. (hereinafter referred to as "Hengrui Medicine").

Like Hengrui Medicine, Hansoh Pharmaceutical has long been focusing on the generic drug business. Its products are mainly used to treat central nervous system diseases, anti-tumor, anti-infection, diabetes, etc. However, under the influence of centralized bulk procurement of generic drugs, the company's performance has been affected to a certain extent.

Financial data shows that from 2020 to 2022, Hansoh Pharmaceutical's operating income was approximately RMB 8.69 billion, RMB 9.935 billion, and RMB 9.382 billion, respectively, and its net profit was RMB 2.569 billion, RMB 2.713 billion, and RMB 2.584 billion, respectively.Innovative drugsIn 2023, the company's revenue will be about 10.1 billion yuan, a year-on-year increase of 7.7%; net profit attributable to the parent company will be about 3.28 billion yuan, a year-on-year increase of 27%. Among them, the revenue of 6 anti-tumor drugs is about 6.169 billion yuan, accounting for 61% of the company's revenue.

Among the above-mentioned anti-tumor drugs, two are the drugs involved in unfair competition mentioned above, namely, flumatinib and ametinib. Although Hansoh Pharmaceutical's innovative drug revenue has increased, its sales expenses have also been high year after year.

From 2021 to 2023, Hansoh Pharmaceutical's sales expenses were approximately RMB 3.428 billion, RMB 3.550 billion, and RMB 3.531 billion, respectively, accounting for approximately 34.5%, 37.84%, and 34.95% of its operating income in the same period, respectively. In comparison, Hansoh Pharmaceutical's R&D expenses in the same period were approximately RMB 1.797 billion, RMB 1.693 billion, and RMB 2.097 billion, respectively. The former were approximately 1.9 times, 2.1 times, and 1.7 times of the latter, respectively.

It is worth noting that in 2023, Hengrui Medicine's sales expenses will be about 7.577 billion yuan, more than twice that of Hansoh Pharmaceutical. Among them, about 3.877 billion yuan will be used for market expenses such as academic promotion and construction of innovative drug professional platforms.

This newspaper will continue to pay attention to regulatory penalties for unfair competition and related matters.