National medical insurance authorities have announced that, starting from May 14, 2026, a nationwide special inspection targeting illegal and non-compliant use of medical insurance funds at designated retail pharmacies was conducted. Six typical cases uncovered during these inspections have recently been made public.
Case 1: Toiletries Disguised as Medicines, and Investigation Hindered by Tampering A branch of Sanya Linhetang Pharmaceutical Co., Ltd. in Hainan Province was reported for allowing the purchase of daily necessities and health products using social security cards and for employing unlicensed pharmacists. A surprise inspection by the national task force confirmed that the pharmacy had fraudulently billed items like "toilet water" as medical insurance-covered drugs such as "Antiviral Oral Liquid" and "Black-Bone Chicken Blood-Toning Oral Liquid," settling the payments through patients' personal medical insurance accounts. The pharmacy also attempted to obstruct the inspection by deliberately damaging network cables and its legal representative feigned a medical episode during questioning. The case has been transferred to local authorities for further investigation.
Case 2: Fictitious Transactions for High-Cost "Life-Saving" Drugs During an inspection of Haikou Qianfang Pharmacy in Hainan, a settlement record for the expensive emergency drug "Angong Niuhuang Wan" raised suspicions. The record lacked corresponding prescription details or customer identification. Reviewing surveillance footage revealed no customer was present or drug delivered during the transaction. It was found that staff used a screenshot of a patient's electronic medical insurance凭证 sent via WeChat by the store owner to complete the fraudulent settlement. This case has been handed over to local authorities.
Case 3: Reselling Drugs Purchased with Medical Insurance, Turning Pharmacist into a "Drug Dealer" Data analysis identified a traditional Chinese medicine, "Zukamu Granules," being settled twice at different times and pharmacies. The first purchase was made by Wang, the manager of Urumqi Yirentang Yangxinhe Pharmacy, on December 12, 2025, at another pharmacy. He used his insurance to cover most of the cost. Later, he resold the same medication at his own pharmacy at a higher price to another customer on March 3, 2026, profiting from the price difference. The case involves suspected resale of "recycled drugs" to defraud medical insurance funds and has been transferred for further action.
Case 4: Diapers and Cosmetics Billed as Vitamins and Herbal Medicines Data screening showed abnormal multiple settlement records for certain insurance-covered drugs at Urumqi Jianminkang Pharmaceutical Co., Ltd. A surprise inspection found the pharmacy had fraudulently billed items like "concealer foundation," "anti-wrinkle skincare sets," and "baby diapers" as medical insurance-covered drugs such as "Vitamin E Soft Capsules" and "Astragalus Granules," using patients' personal insurance accounts for payment. The case has been transferred to local authorities.
Case 5: Long-Term Storage of Social Security Cards, Pharmacy Serving as Clinic's "Supply Point" During an inspection of Chengdu Kanghuirentang Pharmacy in Sichuan Province, a social security card belonging to patient Song was discovered hidden in a cash register drawer. The card had been used multiple times to settle payments for traditional Chinese medicine without the cardholder being present, totaling approximately 1,100 yuan. Further investigation revealed that Song is the legal representative of a local clinic. The medicines purchased through this fraudulent billing were resold at a markup to unsuspecting patients, with Song admitting to over 2,000 yuan in resale revenue. The pharmacy is suspected of improperly retaining social security cards and assisting in fund misuse. The case has been transferred for further investigation.
Case 6: Traceability Code Reveals Dual Sales, "Recycled Drugs" Linked to Same Supervisor Data analysis revealed that one box of "Xinkeshu Pills" was settled twice at different times and pharmacies, indicating the same box was "sold" twice. The first sale was at one branch of a pharmacy chain in November 2025, and the second at another branch under the same chain in December 2025. An inspection found the second pharmacy could not provide the required delivery documents or invoices for the drug, suggesting resale of "recycled drugs." Both pharmacies share the same responsible person. The case has been transferred to local authorities.
Medical insurance authorities have reminded all designated retail pharmacies that practices such as reselling "recycled drugs," conducting fictitious transactions, or fraudulent billing violate relevant laws and regulations. Pharmacies are urged to operate in strict compliance with the law and prevent any misuse of medical insurance funds. Patients are also advised to use medical insurance funds properly, report lost or stolen cards immediately, and provide tips about "recycled drugs" to relevant authorities to safeguard their rights and protect the security of medical insurance funds.
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