The Effect of China’s Two-Invoice System on Anti-Corruption Compliance for Drug Companies 

Drug sales in China are rife with corruption risk – both in terms of violations of the FCPA and local Chinese anti-corruption laws. By restricting the number of tax-valid invoices in the drug procurement industry chain, China’s new “Two-Invoice System” aims to reduce that risk by increasing the transparency of pharmaceutical product distribution. But, compliance lawyers told our sister publication Policy and Regulatory Report (PaRR), the rule may actually introduce anti-corruption risks for drug companies changing distribution strategies to comply. See “Travel Agencies, Fapiao and Hospitality: $12.8 Million SciClone Settlement Highlights Diversity of Risk in China” (Feb. 10, 2016).

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