How can it be legal for pharmaceutical companies to refund money to medical representatives?
The Anti-Unfair Competition Law stipulates that in trading activities, operators can pay discounts to the counterparty in an express way or pay commissions to intermediaries. If an operator pays a discount to a counterparty or a commission to an intermediary, it shall be accounted for truthfully. Operators who accept discounts and commissions should also record them truthfully. It can be seen that it is legal to give kickbacks to the other party as long as they are truthfully accounted for, and the corresponding kickbacks can be regarded as sales expenses, and the party receiving kickbacks should also be truthfully accounted for, otherwise even if they are truthfully accounted for, the party receiving kickbacks may still constitute the crime of accepting bribes. It is worth noting that the Anti-Unfair Competition Law makes it clear that bribing the staff of the operator should be regarded as the behavior of the operator; However, unless the operator has evidence to prove that the behavior of the staff member has nothing to do with seeking trading opportunities or competitive advantages for the operator. Enterprises should never think that by giving kickbacks to employees, enterprises can pretend not to know to escape legal punishment. Employees' behavior is the behavior of the company, unless the company can provide evidence to the contrary, but it is quite difficult to prove that the company has nothing to do with employees' kickbacks in practice.