Sentiment improves in China’s medical sector due to anti-graft movement

Written by Andrew Silver

SHANGHAI, Nov 9 (Reuters) – Business activity in China’s healthcare sector is returning from a near-sudden freeze that began in July when the Chinese government launched a year-long anti-corruption campaign, foreign industry sources say. Two executives said.

The campaign targets bribery of doctors in the sale of medicines and medical devices, marking a rapid expansion of the anti-corruption movement in this sector that began several years ago. The latest campaign has had a negative impact on the entire industry, sending healthcare stocks plummeting and prompting some companies to cancel their IPOs.

“We are seeing a recovery in terms of engagement… We are seeing improvements in this area,” Zafar Anruar, China president of US healthcare company Organon, told Reuters on the sidelines of an industry event in Shanghai.

“It’s still not as high as it was before, but it seems like it’s gradually becoming more balanced.”

Executives say the anti-transplant movement initially caused major business disruption, with many multinational drug companies losing ties with hospitals.

“There has been some disruption to the ability of our medical personnel to visit hospitals and to carry out some medical application activities,” Larry Melizalde, China CEO of South African pharmaceutical company Aspen, told Reuters. I was seen,” he said.

Barclays said in a recent note that AstraZeneca “also faces challenges from a medical corruption investigation in China, which has reduced AZN’s access to local doctors and negatively impacted prescription volumes.” said.

A spokeswoman for AstraZeneca declined to comment as the company reports quarterly results later on Thursday.

However, both executives said the overall atmosphere has improved over the past two months following communications such as question-and-answer sessions from the National Health Commission and presentations from government officials.

“Since the government’s latest announcement clarifying the objectives of this anti-corruption policy last month, we can see that overall activity is returning to normal,” Melizalde said.

China is one of the world’s biggest health care markets for health care companies, but factors such as the anti-graft movement have made the company’s business outlook vulnerable this year. (Reporting by Andrew Silver; Editing by Miyoung Kim and Robert Barthel)

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