Traditional Chinese medicine body revokes CSR awards to scandal-hit pharma firms
- National association apologises for ‘carelessness’ in lauding Hongmao Pharmaceutical and Buchang Pharmaceuticals for corporate social responsibility
- Companies have been dogged by controversy over the last year or so
A Chinese health association has revoked awards given to two companies for philanthropy last year after they become embroiled in controversy.
“Due to our carelessness in checking and management, especially due to our lack of awareness of the serious impact on public sentiment from the Hongmao Herbal Liquor incident, the award we issued led the public to question us,” the association said.
“We’ve decided to revoke the award as a way to rectify our mistake.”
In a blog post, Tan had described one of the company’s health tonics as a poison, prompting Hongmao to accuse Tan of inflicting more than 1 million yuan (US$143,000) in damage to its reputation.
The case was not tried in a court but Tan was detained for three months until a public outcry prompted intervention from the national judicial authorities.
Further investigation revealed that Hongmao had been banned in several provinces for exaggerating the health claims of its products in advertising.
Buchang was involved in several cases in which its sales staff were jailed for bribing doctors to prescribe their drugs, the 21st Business Herald reported.
An unidentified employee from Hongmao’s brand communication department said her company received the CSR award because “we have done many and our contributions to public welfare, poverty relief and free medical consultations have been reported by media”, the Economic Daily reported.
Buchang could not be reached for comment and its website was offline on Friday.
The China Association of Traditional Chinese Medicine has 385 member enterprises. Companies need pay 5,000 yuan a year to become an ordinary member, 10,000 yuan for a place on its council and 30,000 yuan to become its “vice-director-level member”, according to the Economic Daily.
