All-out efforts urgently needed to crack down on healthcare market irregularities
The scandal surrounding Chinese healthcare products maker Quanjian continued to grow as police in North China’s Tianjin detained 18 suspects, including the controller of the company, on January 7, with two other suspects released on bail pending trial.
With the ongoing investigation into Quanjian for alleged false advertising and illegal pyramid-selling, the chaos in China’s healthcare products industry has grasped the public’s attention. Although the country’s healthcare products market has developed into a huge industry from scratch over recent decades, the sector has been extremely chaotic due to the lack of standards, regulation and supervision. In order to sell their healthcare products, market players often fabricated facts and exaggerated the product’s effects, which seriously disrupted the market order and infringed on the legitimate rights and interests of consumers. Therefore, it is urgent for the relevant government departments to rectify irregularities and ensure close supervision of the industry.
Quanjian is just a tip of the iceberg. There are lots of Quanjian-like companies, big or small, that cheat consumers with their misleading advertising in China’s tangled healthcare products market. By the end of October 2018, market regulatory authorities at all levels had investigated and punished 49,000 cases of fraud and false advertising of food and healthcare products, worth a total of 1.71 billion yuan ($252.9 million), according to the State Administration for Market Regulation.
With the improvement of Chinese people’s living standards, they are paying increasing attention to health and longevity in recent years, boosting a huge healthcare products market. According to data from the China Nutrition and Health Food Association, by the end of 2016, China had more than 2,300 companies producing packaged food products, with total output valued at nearly 400 billion yuan.
Yet, the vast market space and attractive profit margin have created a hotbed for sales irregularities and false advertising. At present, many healthcare products makers are unwilling to invest in R&D but are exuberant about hyping their so-called high-tech concepts, concentrating their efforts on marketing promotion only. According to an Accenture report, the average cost of healthcare products is only about 10 percent of their retail prices.
What’s even worse, with the aging Chinese society, the elderly have become an important customer group in the healthcare products market. However, many healthcare product salesmen have developed illegal sales methods cheating the elderly into buying substandard, fake and even harmful products. These deceptive marketing practices have not only caused economic losses to the elderly, but may also constitute a threat to their health, which has become a serious social problem. Cases of elderly people being deceived of their savings have mushroomed across the country, endangering market order and social security.
After the exposure of the Quanjian case, a total of 13 government departments including the State Administration for Market Regulation, the Ministry of Public Security and the National Medical Products Administration made a joint decision that starting from January 8, 2019, they would begin a joint 100-day campaign aimed at cleaning up the chaotic healthcare market.
It is certainly commendable for the government to quickly crack down irregularities in the healthcare products market. However, in the meantime, an all-out effort is needed to facilitate the establishment of a long-term mechanism to ensure the healthcare products market remains under strict and efficient regulation. Specifically, the production process of healthcare products must be subject to strict supervision, and any inclusion of prohibited ingredients must be eliminated. Meanwhile, product identification must be strictly reviewed to avoid misleading advertising; and law enforcement must be strengthened to effectively regulate the market in order to ensure the safety of people’s welfare and properties.
In addition, for a long time, there has been a legal definition and legal basis for the regulation of health foods in China. The lack of corresponding laws and regulations for healthcare products has posed difficulties for market supervision, which has become a gray zone for law enforcement. Thus, while cracking down on illegal sales of healthcare products, authorities are advised to set up specific industry standards and regulations to put an end to misleading and false advertising about healthcare products.
Last but not the least, regulatory authorities should also improve the scientific awareness of the public through better education. It is essential for the public, especially the elderly, to recognize the differences between medical care and healthcare, and not to fall into the trap of the so-called “medicine and food homology.” They need to know that no healthcare products can substitute medical treatment when they fall ill.
The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn