Since the 1980s, China has modernized its hospitals, added a decade to life expectancy, halved infant mortality, and eliminated diseases such as polio. Now it aims to stamp out medical corruption.

Efforts to clean up the nation's $350 billion health-care industry have gained prominence since police said last month they were investigating GlaxoSmithKline Plc (GSK) for suspected economic crimes. Today, the China Food and Drug Administration said it will "severely crack down" on fake medications, forged documents and bribery.

Six years after executing its chief drug regulator for accepting bribes for approving fake medicines, the government is focusing on ensuring an eightfold increase in health spending over the past decade doesn't also line the pockets of drugmakers, doctors and hospital officials.

"We know that China's corruption is so entrenched in the pharmaceutical space that in order to get things done you have to bribe officials; it's an open secret," said Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations in New York and author of the book, Governing Health in Contemporary China. "Rampant bribes, commissions and corruption raises drug prices. This makes it difficult for public hospital reform to push forward."

David Fuller's view This is a global problem, practiced a little more subtly in developed economies. The good news in this report is that China is seriously tackling medical corruption. Hopefully, this will encourage similar efforts on other countries.