Corrupt Chinese drug official appeals death penalty

Many observers believe his fight for life, however, will be fruitless.

Zheng Xiaoyu was found guilty last month by a by a Beijing court for taking over $850,000 (€632,000) worth of bribes in the form of cash and gifts when inappropriately approving hundreds of drugs and medical devices, at least six of which proved to be fake.

When he reigned as China's chief drug and food official between 1997 and 2006, dozens of people were killed by fake and inferior products.

Zheng has now filed an appeal to the provincial supreme court, within the mandatory seven day period, and will now await a second trial.

Should this fail, his death sentence will likely be carried out immediately.

As part of his appeal for leniency, lawyers have pointed to Zheng's "voluntary confessions" and "confessions of good attitude" and his initiative to return some of the cash and gifts he received as bribes, according to a translated version of the Beijing Times.

Although some believe the appeal will succeed in having his sentence commuted to life imprisonment, the consensus appears to be that the appeal will fail.

"The chances of him not dying are zero," Zhuo Xiaoqin, a Beijing lawyer and consultant to the Ministry of Health, told the South China Morning Post .

"He was causing immense health hazards."

Bloggers in China are also having their say, with one writing on chinablogtoday that the "appeal is meaningless," and others believe he will be used as a scapegoat or a warning sign to deter others.

China is no stranger to the death penalty and the communist country is believed to carry out more executions than any other country.

In 2005, around 4,000 people were sentenced to death with 1,770 subsequent executions taking place, according to human rights group Amnesty International.

However, if his appeal fails, Zheng will become the first senior official during the presidency of Hu Jintao, and only the fourth senior official since the Cultural Revolution to be executed, even though corruption is known to be rife amongst a plethora of high-level Chinese officials and it appears that he may be being 'made an example of' by the Chinese government.

The fact that China has of late been waging a concerted clean-up campaign on its pharmaceutical industry may have something to do with it.

The country has been trying to remedy its international reputation as a producer of unsafe and counterfeit drugs, and subsequently attract lucrative international investment and business deals.

This hard line approach with Zheng may be a signal to the West of its sincerity to make changes.

China has been strengthening its commitment to reform since 2001 when it agreed to adhere to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement as part of its entry into the World Trade Organization (WTO) has been taking steps to make sure its companies follow manufacturing standards such as the International Organization for Standardization (ISO) and good manufacturing practice (GMP).

More recently the country has been stepping up efforts to improve its image.

In September last year the SFDA carried out 35 unannounced inspections of drug manufacturing facilities and revoked the Good Manufacturing Practice (GMP) Certificates of 15 companies and imposed fines, while ordering 13 others to rectify production defects.

Only last week, China's top administrative body, the State Council has announced a series of regulatory reforms, vowed to place new controls on drug (and food) imports and exports by 2010 and to increase the proportion of such products that are subject to random inspections to 80 per cent, up from the current figure of 30 per cent.

The country is wise to do so - China is a big market with a lot of potential and many multinational drug companies are looking to exploit the growth of China within the pharma industry as escalating competition in the global drug market is driving them to seek new strategies such as outsourcing research and production or setting up operations in low-cost destinations.

Many already have manufacturing facilities in China and drug giants such as Novartis, Eli Lilly, Genentech, Lonza, AstraZeneca and GlaxoSmithKline (GSK) are among those who have more recently taken the plunge and set up highly commercially-sensitive R&D centres in the country, heightening China's need to operate professionally.

Over the next three years, China is predicted to become the joint fifth largest pharma market, alongside the UK with an estimated value of $24bn, according to data from the Boston Consulting Group and China's medical device market is currently worth approximately $3.5bn and also said to be growing at a rapid pace.

Furthermore, India and China now hold the potential to capture 35-40 per cent of the outsourced market share in the $50bn global pharmaceutical manufacturing industry, according to recent market research by Frost & Sullivan.

And it is India that China knows it has to contend with in the race for Asian supremacy.

However, China is currently trailing in regard to reputation and many pharma industry firms still avoid doing business in the country because of fears that their intellectual property (IP) cannot be protected and that corruption and bureaucratic red tape will hinder viable business relationships.

In a report last year by Ernst & Young, more than half of pharmaceutical executives surveyed saw counterfeiting and data security as a business risk to their company operations in China while 42 percent saw counterfeiting as a problem in India.

In addition, when asked to rank individual risks, patent protection was the most significant issue for a majority of pharmaceutical companies doing business in China and India.

More than 70 per cent of pharmaceutical executives said that threats to intellectual property pose a business risk in China, with 62 per cent considering patent protection in India an issue, the survey revealed.

At a London conference on IP in China last October, Todd Dickinson, VP and chief intellectual property counsel of General Electric (GE), whose Healthcare, among other divisions is operational in China, advised those thinking of doing business in the country that "China offers Western firms a huge opportunity, but those operating in the country should be very mindful of introducing key technologies."

During the conference, speakers also heard the challenges international companies faced in China in light of widespread corruption at many levels of power, including the regulatory and judicial systems.

Clearly the West wants to see extensive reforms in China, including the abolishment of such corruption, although most will agree that executing corrupt officials is not an appropriate way to go about it, nor will it do the country's international reputation any favours.