Research On Financial Compliance Issues Of Pharmaceutical Promotion Enterprises

In the latest State Council Institutional Reform Plan announced in March 2018,by integrating the relevant functions of the former China Food and Drug Administration,State Administration for Industry and Commerce,and General Administration of Quality Supervision,Inspection and Quarantine,the new State Administration for Market Regulation was established to strengthen the supervision of the pharmaceutical industry.The reform of the regulatory framework,coupled with the implementation of policies,such as replacing the business tax with the value-added tax and the two-invoices system,have accelerated the transformation of the pharmaceutical marketing model from the investment agency system to the commission system,promoted the rapid development of specialized pharmaceutical promotion companies,and effectively cracked down on illegal and lawbreaking behaviors in the marketing process,e.g.,unlicensed operators doing pharmaceutical business using the certificates of licensed enterprises,making false invoices to get money,illegal commission,and commercial bribery.With the advancement of industry reform,propelling financial compliance of pharmaceutical promotion companies to further achieve full compliance in the enterprises,is not only a requirement of their internal management,but also an inevitable requirement of the development of enterprises and industries as a whole.Since there are lots of irregular and illegal cases in the pharmaceutical industry after many years of development,how to assure compliance while achieving survival and development in such a complex market has become a critical problem for the healthy and virtuous development of pharmaceutical promotion companies in China.This paper,based on the above issue,takes Y,a pharmaceutical promotion company,as an example,and research the financial compliance issues faced by the company.Through this research,it was believed that,to carry forward the healthy and virtuous development of the industry and promote financial compliance,focus should be placed on the design of the financial system.Firstly,to control the large-scale costs,such as the promotion service charges,pharmaceutical promotion companies are suggested to employ third-party service providers to carry out the promotion,while the pharmaceutical promotion companies should lay higher emphasis on the design of the payment settlement management system involving the third-party service providers.Secondly,in accordance with the major compliance issues in pharmaceutical promotion companies,priorities should be given to the design of the management system,including invoice management,expense reimbursement management,budget management,enterprises' internal control,etc.Thirdly,centering on finance and radiating outward to other enterprises' daily operations,pharmaceutical promotion companies are suggested to pay attention to the design of systems with regard to debts and credits,qualification certification of distributors,salary performance,and human resource;meanwhile,various approaches and technologies should be taken to push the implementation of the system forward to improve its efficiency and effectiveness.